Strategic Management JournalStrat. Mgmt. J., 32: 322–341 (2011)

Published online EarlyView in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/smj.880

Received 7 January 2008; Final revision received 31 July 2010

CAPTURE, GOVERNANCE, AND RESILIENCE:STRATEGY IMPLICATIONS FROM THE HISTORYOF ROME

ABRAHAM CARMELI1* and GIDEON D. MARKMAN2

1 Graduate School of Business Administration, Bar Ilan University, Ramat Gan, Israel2 College of Business, Colorado State University, Fort Collins, Colorado, U.S.A.

Organizational resilience is a subject of great interest to management and strategy scholars.Drawing on over 1,000 years of historical data on the Republic of Rome, and focusing primarilyon the period of its establishment (509 BC–338 BC), we identify two generic strategies, cap-ture and governance, that together are essential for organizational resilience. Capture strategyrelates to market expansions, while governance strategy refers to the capacity of an organizationto assimilate, retain, defend, and increase its dominance within annexed markets. The history ofRome also reveals four supporting tactics—saving power, maintaining a stronghold base, iso-lating and weakening adversaries, and creating forward outposts—that shore up and reinforcethe capture and governance strategies, to create a more enduring and resilient enterprise. Inter-estingly, a system-wide view of the strategy-tactic framework also offers insights on resiliencethrough smallness, thus illustrating its conceptual utility to organizations of all sizes includingsmall enterprises. Copyright 2010 John Wiley & Sons, Ltd.

INTRODUCTION

What strategies are primarily related to organiza-tional resilience; and what tactics are indispens-able when organizations strive to enhance theirresilience and prolong their existence? These andsimilar questions regarding the architecture oflong-lasting organizations are vexing research top-ics in the field of strategic management. A plethoraof insightful frameworks (e.g., the structure-con-duct-performance paradigm, Porter’s genericstrategies and the five forces framework, resource-based view, dynamic capabilities, and core com-petencies, among others) do help, but the survivalrate of businesses remains low; for every 10 small

Keywords: capture and governance strategies; tactics;resilience; longevity.*Correspondence to: Abraham Carmeli, Graduate School ofBusiness Administration, Bar Ilan University, Economic Build-ing, Ramat Gan 52900, Israel. E-mail: carmelia@mail.biu.ac.il

businesses, seven survive their first year and onlytwo remain in operation after five years (Klein,2002). These statistics are consistent with researchshowing that 50 to 70 percent of all new firmsdisband within their first five years, over 80 per-cent disperse in the first decade of their existence,and many firms survive but do not thrive (Aldrich,1999; Morris, 2009).

Interestingly, despite keen attention to this highdisbandment rate, the literature has yet to offera coherent, system theory that would tie genericstrategies and specific tactics to organizationallongevity (Birkinshaw, Hamel, and Mol, 2008;Burgelman and Grove, 2007). Understanding whysome organizations are more resilient and capableof prolonged existence than others is an importantsubject of inquiry because the costs of disband-ment can be staggering. Ecologists contend thatorganizations cannot fully avoid decline, but it isthe thesis of this study that lessons from the historyof nations can expand the vistas on organizational

Copyright 2010 John Wiley & Sons, Ltd.

Competitive Strategy and Resilience 323

resilience—the capacity of an organizations tosustain and bounce back from a setback (Sut-cliffe and Vogus, 2003). Indeed, historians havelong been concerned with issues of longevity—theability to sustain operations, processes, functions,and productivity for several centuries (Kennedy,1987; Tuchman, 1985). The case of Rome pro-vides an instructive historical account; at its ter-ritorial peak, the Roman Empire governed about2,300,000 square miles of land, it persisted over1,000 years, and some of its accomplishmentsleft economic footprints that endure to this day,mostly through its influence on language, sci-ence, religion, architecture, philosophy, law, andgovernment.

CONCEPTUAL BACKGROUND

Naturally, the history of Rome is only one exampleof a city-state that, ex nihilo, managed to pro-long its existence, but the question we ask is:what can firms learn from larger, human-made sys-tems—such as political entities or nations—abouttheir own resilience? The answer, as our studysuggests, is adamantly, quite a lot. Already thereis a growing interest in drawing lessons fromthe endurance, longevity, and competitiveness ofnations and military forces (cf. Aupperle, 1996;Bellak, 2005; Clausewitz, 1827/1976; Clemonsand Santamaria, 2002; Nelson, 1996; Porter, 1990).Learning from nations’ strategic supremacy andspheres of influence, D’Aveni, Gunther, and Cole(2001) show how historical analysis can help firmsachieve more sustained positions. They say, ‘Whilesome may view the story of the Roman Empire asancient history, many of today’s most successfulmodern global businesses have used similar strate-gies to achieve strategic supremacy’ (D’Aveniet al., 2001: 18). Efforts to build theory throughhistorical analysis, then, are not unusual (e.g., Aup-perle, 1996; Calori et al., 1997; Lubatkin et al.,2005; Paret, 1965). Two factors suggest that thefield of strategic management can borrow and ben-efit from political science. First, nations and com-mercial firms are both human-made systems, sothey share many commonalities; and, second, theability of nations to endure and thrive despite esca-lating administrative complexities explains whysuch systems offer unique insights into firms’longevity and resilience.

This is a study of ‘storicity.’ It uses knowl-edge of the past to shed light on issues otherthan the past. Indeed, a theory is unlikely to pre-dict the future if it fails to explain the past; andbecause dependable data are available solely aboutthe past, crafting theories based on historical datais a useful means to look into the future. Using aninductive theory-building approach, we start withpremises based on a body of historical data todefine, construct, and identify causal relationships(Locke, 2007; Peikoff, 2007). We then tie in addi-tional constructs from other theories and recentdata on firm action, all the while integrating thelogic—with boundary conditions—into a theory.Here, specifically, we draw on the founding and the1,000-year history of the Republic of Rome, andfocus on the tumultuous period from 509 BC to338 BC to present two generic strategies—captureand governance —and then exemplify their utilityfor building more resilient organizations.1 Briefly,capture strategy relates to growth, say throughterritorial expansion, while governance strategyrefers to management and administrative over-sight before, during, and after expansion. However,while necessary for resilience, by themselves thesestrategies are insufficient to create more enduringenterprises.

We make three contributions. First, usingRome’s historical data, we draw parallels to anddistill lessons for organizational resilience. Specif-ically, while most recognize that capture and gov-ernance strategies are related, we show that Romeaccelerated its growth out of a small city-state ina volatile and hostile environment only after itlearned to systematically combine, align, and rein-force the two strategies. This fine distinction—themethodical and recursive fusion of capture andgovernance strategies—has important implicationsfor all firms, including those that deal with the lia-bility of newness and those that face the hazardof stagnation (Stinchcombe, 1965). As our sec-ond contribution, we explain how different per-mutations of capture-governance strategies yieldvarying degrees of growth and longevity. Firms

1 Rome was not a new entity, but with the establishment ofthe Republic it achieved a new organizational form (a newbusiness model). We focus on Rome because of the abundantrecords relating to its endurance through capture and governancestrategies. Clearly, there are other examples (e.g., Athens, theperiod of Alexander the Great), but to remain parsimonious andreduce complexity, we exclude these avowedly interesting anduseful examples.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

324 A. Carmeli, and G. D. Markman

pursuing capture strategies—independent of gov-ernance strategies—harness unsustainable growththat brings disbandment, whereas companies thatuse governance strategies without capture strate-gies can actually endure for many years, butusually in the shadow of bigger (albeit perhapsyounger) players. Finally, we identify and elab-orate on four reinforcing tactics—saving power,maintaining a stronghold base, isolating and weak-ening adversaries, and creating forward outposts—that are crucial for realizing the full potential of thetwo generic strategies, and explain how they serveas indispensable building blocks for organizationalresilience. By themselves, the strategies and tacticsare not new; however, research on generic strate-gies, precise tactics, and a dynamic system viewof links between them are surprisingly scarce. Webegin to mitigate this gap by offering a system-wide view that articulates how the ‘moving parts’work together to drive organizational resilience.

Boundary conditions

After considering hundreds of long-lasting firmsthat managed to outlast governments, nations, andcities, we chose a sample of 150 to study morecarefully. We learned that most multi-centennialfirms—firms that endured for several-centuries,as Rome did—are actually small, frequentlyfamily-owned businesses. We also discovered andcautiously analyzed large, publicly-traded corpora-tions, but large firms endured for far fewer yearsthan either Rome or the small firms did. For exam-ple, AXA ranked as the 15th biggest company inthe world (based on revenue) according to the 2006Fortune 500 global list, but it could not serve as acase study because (i) it is made up of a group ofsemi-independent companies; and (ii) it is ‘merely’200 years old, which is not long enough by ourdefinition of longevity and resilience. We alsoexcluded the Dutch East India Company (foundedin 1602), which was the first multinational cor-poration and the first company to issue stock; italso possessed quasi-governmental powers, includ-ing the ability to wage war, negotiate treaties, coinmoney, and establish colonies. However, this com-pany perished by corruption and was dissolvedbefore it reached 200 years old. To the best of ourknowledge, then, no single publicly traded firm hasmanaged to endure for as long as Rome did. Hadthere been such a business exemplar, we would be

using that firm, rather than Rome, as our historicalcase.2

Our framework is relevant to competitive dyna-mics research, but it focuses neither on hypercom-petition nor on how advantage is created, eroded,destroyed, or recreated (D’Aveni, 1999, 2004).While high-order interactions between the strate-gies and tactics are also interesting, the theoreticalcomplexity due to such interactions far exceeds theinsight sought at this conceptual stage. We there-fore direct attention to the interplay between thetwo strategies and then discuss the role of thesupporting tactics. We use mini-cases as exam-ples in order to illustrate the conceptual contentin action and to disambiguate the framework, but,of course, examples do not replace the inductivelogic of the theory per se. Finally, we consideredRome’s entire history (over 1,000 years), but toremain within reasonable bounds, we elaborate pri-marily on its’ tipping point for growth; the periodof its founding (509 BC–338 BC). That is, Rome’sdecline—when it ceased to synchronize its genericstrategies with the supporting tactics—is interest-ing as well, but the topic of decline is outside thescope of the current study.

We proceed as follows. The next section reviewsRome’s capture strategy during four hostileencounters with its neighbors, followed by a dis-cussion of the strategy Rome developed to bet-ter govern conquered city-states (Shatzman, 1990).The theory development section begins by apply-ing insights drawn from Rome’s capture and gov-ernance strategies to business organizations andends by explaining the role of several supportingtactics. We conclude with implications for theory,practice, and future research.

ROME’S CAPTURE STRATEGY

Approximately 70 percent of Italy is mountain-ous. The Alps mountain range extends into France,Austria, and Switzerland, and the Apennine Moun-tains divide Italy’s east and west coasts. Initially,Rome was located right in the heart of Italy ona large plain called Latium, only 15 miles from

2 Consider the ‘excellent companies’ (Peters and Waterman,1982), ‘built-to-last corporations’ (Collins and Porras, 1994),and the ‘good-to-great firms’ (Collins, 2001) and how most havenow gone from great to below average (Hamel and Valikangas,2003).

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 325

the Tiber estuary. Its geographic location gener-ated a number of advantages. Fertile land suppliedthe needs of Rome’s relatively large population;its hills protected it from floods and invaders;and the Tiber estuary provided it easy access toa sea—and, thus to foreign trade. Its locationalso insured that Rome held the best crossing ofthe Tiber estuary, the main artery of Italy’s westcoast—a site that was relatively defensible andhindered unified action by rivals. For visual clar-ity, Figure 1 shows Rome’s position in 509 BC,and Figure 2 shows its expansion by 338 BC.

Rome and Latium: the Cassius Treaty

The domination of Rome was established in theseventh century BC. In the first treaty betweenRome and the Latin peoples (who are hereafterreferred to as the Latin League), circa 510 BC,Rome gained the right to represent the Latiumarea. In 509 BC, Rome and the Latin League losta battle against the Etruscans, who had come fromthe north; the Etruscan victory was short-lived,however, as they were defeated in 506 BC bythe Latin League. Then, in 493 BC, after severalyears of conflict between Rome and the LatinLeague, the two signed the Cassius Treaty. For thefirst time, Rome and the Latin League committed

to provide mutual assistance in case of foreignattacks, to share all booty equally, and to rotatethe leadership of their incorporated army (Gibbon,1778/1994; Nicolet, 1991).

Given that Rome was clearly stronger, why didit not seek to conquer the Latin League or todominate the entire Latium region at that time?There were several reasons for this, particularly inthe early days of the Republic (Heurgon, 1973).First, after years of battles, Rome’s ramparts weredestroyed and the city was vulnerable. Second,Rome was enmeshed in an internal clash betweenthe lower-echelon populace, who lacked politi-cal and economic power (the Plebs), and thelandowners (the Patricius). This conflict had weak-ened Rome’s social fabric, commercial prowess,and military might. Third, Rome faced persis-tent threats from outside: the Etruscans wieldedpressure through Veii, a city-state about 10 kilo-meters north of Rome; the Sabines maintainedincessant pressure from the northeast; and otherthreats came from the mountain tribes of the Eique-ses, who attacked Rome from the northeast, andfrom the Volsces, who invaded Latium from thesouth. Collectively, the internal strife and externalthreats caused Rome to be disorganized, vulner-able, and incapable of expansion; cooperation onequal terms with the Latin League was in the best

Figure 1. Rome’s position in 509 BC, prior to its expansion

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

326 A. Carmeli, and G. D. Markman

Figure 2. Rome’s position (growth and expansion) in 338 BC

interest of both. The Latin League served to secureRome’s southern borders. Furthermore, the CassiusTreaty and the external threat quieted the conflictsbetween Rome and the Latin League while creatingeconomy of scale in military strength, a dominantforce that was previously unattainable. For the firsttime, Rome capitalized on the resources of othersthrough resource captivity (Markman, Gianiodis,and Buchholtz, 2009a) or what Luttwak (1976)calls a saving power tactic. Although a simplifiedview, Figure 3 is important in showing Rome’stumultuous evolution from 509 BC to 338 BC.

Rome and Veii

As indicated, Rome fought against the powerfulEtruscan city, Veii, located on the northern bankof the Tiber Valley. To wage war effectively—toreduce risk by saving power—Rome sought toconquer Veii’s support city, Fidenae, which was acritical supply pathway for Veii and a gateway tothe Tiber Valley. In 425 BC, after about 50 years ofintermittent effort, Rome finally conquered Fide-nae. Then, in 405 BC, Rome attacked the weak-ened Veii, and after a 10-year blockade, the criticalcity was finally conquered and destroyed.

Its eventual conquest of Veii by first capturingFidenae illustrates how Rome saved power when

it isolated and weakened its rivals through indirectmoves and resource captivity. That is, when Fide-nae residents were enslaved, the practice instantlyincreased Rome’s workforce capacity, which facil-itated the attack on Veii. Rome then used the addedterritory and labor capacity to strengthen itself;it distributed the new land to its loyal citizens,thus increasing the number of personnel joiningits military machine. Finally, the surplus land alsoallowed Rome to quell internal tension and con-flicts between the Plebes and the Patricius. Inshort, the capture strategy—in combination withthe reinforcing tactics of isolating and weakeningand of saving power—enabled Rome to not onlydouble its territory and become the largest city inLatium but also to increase its military might, thusboosting its spheres of influence and expansioncapacity (D’Aveni, 1999, 2004).

Rome and the Gauls

Rome’s subsequent growth was delayed for sometime; then its vulnerability increased sharply withthe appearance of the Gauls, who invaded Italyfrom central Europe and defeated the Etruscans.The Gauls took control of the Po Valley andmade Milan (Melpum) their capital. In 390 BCthe Gauls invaded Etruria and blockaded the city

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 327

Veryweak

Veryhigh

Medium

The

dom

inat

ion

of R

ome

in L

atiu

m

Years (BC)

509 493 395 390—360 338

1

2

3

4

5

6

Legend:1 = Rome represents Latium2 = Rome loses its control over

Latium to the Etruscans and theLatins

3 = Rome and the Latins sharecontrol over Latium

4 = Rome conquers Veii5 = The Gauls defeat Rome6 = Rome defeats the Latins

Figure 3. Key events leading to Roman domination in Latium (509-338 BC)

of Clusium. When Rome tried to impede theiradvances, the Gauls abandoned their blockade ofClusium and engaged in open battle with Rome.The Gauls eventually defeated the Roman armyand blockaded its city. Seven months and a largeransom later, the Gauls agreed to leave the Romancity.

Rome’s defeat ruined what had taken a centuryto build. At that point local enemies and formerallies tried to exploit Rome’s vulnerability. Theyfailed, not because of Rome’s strength, but pri-marily because each party acted alone. Concur-rently, however, the Gauls continued their attacksupon bordering tribes (Umbrians, Etruscans, andAlpines), thus weakening Rome’s opponents. In360 BC, the Gauls renewed their assaults on Rome,but this time they failed. On the Etruscan front,Rome continued to fight several battles, even-tually removing the remaining threat along itsnorthern frontier and signing treaties with theCaeritis (353 BC), Troiugenes (351 BC), andFalernus (343 BC). During the 30-year hiatusbetween the Gauls’ attacks, the Romans rebuilttheir city; the recent crises, clear and present threat,and a sense of urgency triggered substantial social,military, and political reforms. Powerful leaders

took control and harnessed internal unity; theyreorganized their army, modernized its weaponry,and rebuilt Rome’s outer stone walls and ramparts.As societal conflicts gradually subsided, the sizeand influence of the Roman army grew, whichfacilitated the formation of critical treaties. Itsstronger and more unified military, internal cohe-sion, and new treaties allowed Rome to forge, forthe first time, potent opposition to the Latin Leagueand, eventually, to break the Cassius Treaty. Thequestion, though, is, ‘Why did Rome decide tosever its ties with the Latin League at that time(493 BC)?’ We turn to this question next.

The Great Latin War

At its inception, the Cassius Treaty created aRoman-Latin alliance that prevented the Volsces’and Eiqueses’ expansion into Latium. However,the power of these tribes had declined by thebeginning of the fourth century BC, limiting theirthreat to Rome. Given the diminishing capac-ity of the Volsces and Eiqueses to realize theirexpansionist aims, along with the Gauls’ declin-ing threat on Rome, the Cassius Treaty was nolonger critical to Rome, and Rome and the Latin

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

328 A. Carmeli, and G. D. Markman

League went to war—the Great Latin War (circa340 BC). In 338 BC, Rome, supported by south-ern tribes, defeated the Latins and gained controlof Latium and other surrounding areas (Salmon,1967, 1969).

Unlike earlier conflicts, which had been costly,protracted, and had highly uncertain outcomes,Rome’s victory in the Great Latin War was decisivebecause it followed earlier, quite successfulengagements. In 381 BC, Rome had conqueredTusculum—the strongest town of the LatinLeague—and, in what at the time was a radi-cal move, granted the residents of Tusculum par-tial Roman citizenship. Subsequently, the warfarebetween Rome and the Latin League graduallyabated, and in 358 BC the League agreed to re-endorse a revised Cassius Treaty to fend off mutualenemies (i.e., the Gauls and Samnites). Reflect-ing Rome’s strength and dominance vis-a-vis theLatin League, the new treaty granted Rome solecommand over the joint military forces. In ensu-ing battles, Rome used this advantage to mili-tarily crush remaining resistance while mitigatingless violent opposition through truces, pacts, andaccords. For example, by signing a treaty withthe Samnites, Rome established clearer spheresof influence, with the Samnites expanding towardthe northeast and the Romans expanding eastward.The treaty was sustained—for a while—becauseboth saw the Gauls as a mutual enemy. Finally,the treaty strengthened Rome’s position vis-a-visthe Latins while preventing the latter from receiv-ing military assistance from neighboring tribes andcity-states. While the Rome-Samnite treaty wasnot without problems, the move allowed Rome toaugment its military force and fight more selec-tively against the Latin League—in itself a strongcoalition of forces. Finally, Latium was fullyconquered.

Up to now, we have focused on the capturestrategy; however, below we show why a cap-ture strategy is insufficient to ensure organizationalresilience. Executives tend to treat governance asexpense activities and bureaucratic support func-tions; our thesis, however, is that Rome expandedits territory, strengthened its military, enhancedthe quality of life of its citizens, and extended itslongevity because (1) it used governance as strat-egy and not only as back-office operation; and(2) it methodically interlaced and synchronized itscapture strategy with a governance strategy.

ROME’S GOVERNANCE STRATEGY

During and after the Great Latin War, Rome faceda new, complex, and critical problem—how togovern a large territory that was populated byinsubordinate, hostile, and even rebellious city-states. The governance arrangements that Romeused, which became its strategy cornerstonesbeyond Latium and Italy, would continue to serveit for hundreds of years to come, even as Romeoutgrew its city-state status. This governance strat-egy aimed to remove rebellious sentiments byensuring the loyalty of cities and tribes and byturning them into highly versatile and mobileresource bases for future expansion. Indeed, evi-dence indicates that Rome’s governance strategyturned Latium’s hostile cities into partners, thusallowing Romans to leverage on saving power tac-tics and to marshal the labor force of the occupiedcities in order to strengthen its military and to carryout territorial expansion (Salmon, 1967).

Post war, Rome was responsible for the overallconduct of the foreign and military affairs of all thecities and tribes of Latium. Rome neither interferedin the daily life of Latium or its tribes, nor did itlevy taxes, thus greatly diminishing the threat ofsocial unrest. The relationship between Rome andits conquered cities, tribes, and subjects was pred-icated on a system of laws, policies, and treaties.For example, no consul could enter a city to loot it.Thus, although Rome’s strategy was to control for-eign and military affairs, it sought minimal inter-ference with social life. This governance strategyimparted saving power, which gave Rome criticalcomparative advantages. First, it allowed Rome toinvest little of its own resources to govern dailylife. Second, it granted the conquered people asense of independence that minimized friction andrebellious sentiment. Third, Rome implemented acarrot-and-stick, segmentation policy to sequen-tially eliminate or co-opt enemies: loyal townsbecame a part of Rome with residents earningfull Roman citizenship; non-loyal towns receivedonly partial citizenship and had no political rights;hostile towns were considered a threat—their lead-ers were killed or exiled and their assets—navy,military, lands, and slaves—were confiscated andrepurposed and redeployed by Roman force.

The segmentation policy allowed Rome to iso-late, weaken, divide, and control its subjects. Thispolicy consisted of two key principles. First, theRomans dealt with each defeated city separately;

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 329

any foreign, military, or direct relationships amongthem were precluded in order to eradicate orga-nized resistance. Second, distinct types of cityannexations differentiated among Rome’s subjects,with different juridical categories defined by dif-ferences in status, rights, and obligations (Cornell,1995). For example, because Roman citizenshipafforded substantial autonomy and other politi-cal and economic privileges, granting differingdegrees of citizenship became a powerful gover-nance mechanism that served to isolate, weaken,and divide new subjects and to instill compli-ance and, eventually, long-lasting loyalty amongseasoned subjects. The citizenship-based segmen-tation and the partial and conditional incorporationemerged as a remarkable isolate and weaken tacticthat allowed Rome to govern outsized, previouslyhostile territories. Status differences for cities alsodiminished subjects’ mobility and thus the procliv-ity to organize against Rome, while the prospect ofcitizenship offered a compelling incentive to joinand support Rome’s growth and longevity.

Another reinforcing tactic was the creation offorward outposts in strategic locations (cf.D’Aveni, 2004). Rome’s forward outposts en-hanced its control and oversight of land pathways,shorelines, and ports, with significant military andeconomic implications. Forward outposts such ascolonies, also served the Roman expansion processby enabling a resettlement enterprise for its loyalpopulation. While Rome (and others) had situatedcolonies earlier (e.g., as a joint enterprise with theLatin League), 338 BC saw the first era of exclu-sive Roman colonization, thus extending Rome’spower base and reach. These new forward outpostsserved as early checkpoints and chock points; theyallowed Rome to detect and deter hostility earlyand to disconnect enemies from their allies andresources.

THEORY DEVELOPMENT:ORGANIZATIONAL RESILIENCE

Corporations endure when they withstand or evaderivals’ onslaughts, technological discontinuities,regulatory upheavals, geopolitical shocks, indus-try’s creative destruction, and fickle consumerpreferences, among other threats. Consistent withan inductive theory building approach, here wetie in the two strategies with additional constructs

from other theories and mini-cases from the busi-ness world to better calibrate the logic and to makethe framework of organizational resilience morerefined.

At the broadest level, the history of Rome sug-gests that, all else being equal, organizationalresilience is a function of an ongoing, methodi-cal pursuit of capture and governance strategies.Firms that expand rapidly—say through mergersand acquisitions (M&A)—but ignore governanceissues such as product integration, culture harmo-nization, general cross-organizational synergies, oreven business ethics will eventually face severesetbacks. For example, Vivendi was a Frenchwater utility firm, but after a six-year acquisitionspree—buying MCA Records, Universal Studios,USA Networks, various publishers, theme parks,and Internet companies—it bulged into a globalmedia conglomerate. The M-form company soonsaw how the benefits from economies of scaleand scope were eclipsed by complexity, includinginterdivisional rivalries and business units compet-ing against each other. Then, after losing about$70 billion in market value, Vivendi was forced tosell off its recently acquired parts, prune some ofits older business units, and fire its chief executiveofficer (CEO).

As we learn from the case of Rome, expan-sion does make sense, but only when firms capturesegments they can manage and dominate througheffective governance. Put more formally, becausethe two strategies have a joint, interactive, anditerative effect on organizational resilience, schol-ars and managers might want to regard themnot as semi-related, but as fully codependent.In fact, the historical analysis of Rome nuancesour understanding that capture and governancestrategies—when done synchronously and recur-sively—strengthen each other. It appears, also,that corporate resilience is about neither crisismanagement nor turnaround programs but, rather,about an ongoing bundling and redeployment ofcapture and governance strategies; it is not reac-tive but proactive organizational conditioning (e.g.,ambidexterity).

Figure 4 features a capture-governance matrix,which provides a schematic view of the interplaybetween the two strategies and its likely impacton organizational resilience, focus, and vulnerabil-ity. Briefly, the SW quadrant suggests that orga-nizational resilience is implausible; indeed, in the

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

330 A. Carmeli, and G. D. Markman

Doe

sn’t

exi

stE

xist

s

Doesn’t existGovernance strategy

Exists

Resilience through smallnessFocus on organic growthVulnerability to larger, expandingplayersMain tactics: stronghold base

Resilience through dominanceFocus on balanced growthVulnerability to complexity and bignessMain tactics: saving power, strongholdbase, isolating and weakening, andforward outposts

Unsustainable resilienceUnclear focusVulnerability to internal strife andexternal threatsTactics without strategy…

Unstable resilienceFocus on rapid, raw growthVulnerability to internal inefficiencyMain tactics: isolating and weakening,and forward outposts

Cap

ture

str

ateg

y

Figure 4. A capture-governance matrix: variations in resilience, focus, and vulnerability as a function of the interplaybetween capture and governance strategies

absence of explicit focus on capture and gover-nance strategies, firms become vulnerable and their‘longevity’ quite temporary. This unsustainableexistence would ensue even for incumbents thatinitially might have held strong positions—perhaps due to historical circumstances such asfirst-mover advantage—because they lack criticalcompetencies to manage, defend, or sustain theirfavored position. Consider the iPod. In three yearsit revolutionized portable entertainment, account-ing for almost 50 percent of Apple’s revenue, andthe firm’s market capitalization catapulted from$1 billion (2003) to $150 billion (2007). This storyis not new, but less known is the fact that the firstmovers to develop competencies, to create this newcategory, and to occupy and dominate this marketsegment were Diamond Multimedia (with the Rioplayer in 1998) and Best Data (with the Cabo 64player in 2000). While still in operation today, bothfirms live meager and vulnerable lives outside theportable entertainment market because they lackedthe competencies to manage and defend their ear-lier positions.

For organizations that leverage on only one ofthe strategies (either capture strategy or gover-nance strategy; NW or SE quadrants respectively),resilience is greater than it is for firms in the SWquadrant, but somewhat conditional nonetheless.When a firm grows through capture strategy with-out governance strategy (NW quadrant), its growthis suboptimal and longevity moderately temporary.Such an organization might make sound acquisi-tions and capture attractive markets for a while,but because it would lack the critical competencies

required to manage and integrate its acquisitions,the cost of growth would be higher than for firmsthat carefully combine growth with governancestrategies. Consider Enron’s capture strategy. In2000, before its 2001 bankruptcy, Enron was anexemplary corporation that included electricity,natural gas, pulp and paper, and even telecommu-nication companies, with $101 billion in revenuesand 22,000 employees.3 Sadly, Enron’s growthand capture strategy was unsustainable because itsgovernance strategy hinged on accounting fraudand corruption—in fact, the focus on growth tothe detriment of governance led to one of thebiggest and most complex bankruptcy cases inU.S. history. The Enron story is extreme but notunique,4 and the implication is clear: combiningsound capture strategy with unsound governancestrategy damages focal firms while also compro-mising a slew of adjacent incumbents (e.g., ArthurAndersen).5

Inattention to governance as a strategy—merelyminimizing operating expenses due to redundan-cies in plants, property, operation, equipment,staffing, or cross-purpose functions—weighs down

3 Fortune named Enron ‘America’s Most Innovative Company’for six consecutive years, from 1996 to 2001.4 Inattention to governance strategy can even cease robustlongevity: though it survived the Napoleonic Wars and bothWorld Wars, the 233-year-old Barings was shut down after itsSingaporean branch lost $1.3 billion due to speculations—pri-marily on futures contracts.5 Although the guilty verdict against Arthur Andersen for itsinvolvement with the Enron debacle was subsequently over-turned, the damage was too high and the firm was forced todisband, resulting in the loss of 85,000 jobs.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 331

capture strategies. Examples of deficient gover-nance include failure to systematize operating pro-cedures, failure to streamline systems for cashmanagement and resource allocation, failure tocentralize purchasing, and failure to standardizebenefits. Naturally, organizations must attend totheir governance; it is the glue that unites diverseadministrative tasks. But the point we stress here isthat even the best capture strategy will not ensureorganizational resilience unless it is coupled withan explicit governance strategy. In fact, a coun-terintuitive lesson is that governance is strategy;firms that ignore this caveat might acquire thewrong companies—or significantly overpay forbuying and integrating the right ones. All elsebeing equal, when governance is merely opera-tional instead of strategic, a company might havethe growth capabilities, but it would not necessar-ily have the administrative and decision-makingbandwidth to sustain its position (e.g., managementknow-how and discipline to ‘stitch’ and leverageon resources and capabilities). Indeed, a 15-yearstudy of thousands of acquisitions carried out bysome 1,700 firms in the United States, Europe, andJapan shows that most acquisitions fail (Lovalloet al., 2007). The reasons for such systematic fail-ure are certainly complex, but the case of Romesuggests that a probable culprit is the absence ofan effective governance strategy.

When firms apply effective governance strat-egy without a capture strategy (SE quadrant),longevity is stronger than what is typically seenin the NW quadrant. In fact, our study of numer-ous cases suggests—contrary to what one mightexpect—that a strong governance strategy couldextend a firm’s life span beyond the NE quadrant.Examples include: Japan’s Hoshi Hotel has beenfunctioning since 718 AD; the Fonderia PontificiaMarinelli, a bell foundry in Italy, was founded in1000 (its bells have since tolled in New York City,Beijing, and Jerusalem); the Venetian glassmak-ers, Barovier & Toso, were established in 1295;Richard de Bas, a French family business, hasmade paper since 1326 (their paper was used byBraque and Picasso); a Tuscan winemaker, thefamous Antinori dynasty, has been producing itsvintages since 1385; the Beretta family has beencrafting guns in Italy since 1526; the oldest familyfirm in the United Kingdom, textile makers JohnBrooke & Sons, has been in business since 1541;and Zildjian (cymbal, drumstick, and mallet man-ufacturer)—founded in Constantinople, Turkey in

1623, then relocated to Norwell, Massachusettsin 1929—is perhaps the oldest family businessin the United States.6 Firms that expand organ-ically extend their longevity no less, and per-haps even more, than those that grow throughacquisitions, albeit organic growth is appreciablyslower (Lovallo et al., 2007). As one might expect,resilience through smallness explains why many ofthe exemplars listed above reflect a narrow geo-product area—meaning, an enduring positioningthat is quite ‘local’ in terms of geographical loca-tion or product space.

Finally, the NE quadrant depicts organizationalresilience as a function of both capture strategyand governance strategy. Organizations fitting thisprofile know how to acquire critical market posi-tions and also how to integrate business units andmanage resource flow. For example, GE acquiresdozens of companies each year; Cisco Systemshas made more than 100 acquisitions throughoutits 20-year history; and now even nonprofit play-ers pursue growth through acquisitions. To de-risktheir growth, some pharmaceutical firms form ‘pre-merger’ alliances with biotechnology and biomed-ical startups (Rothaermel and Hill, 2005). Evenwhen a merger or acquisition is aborted, alliancesmay still give parties access to new competen-cies and know-how. As we learn from the historyof Rome and our inductive logic, the resilienceof firms is greatly influenced by their capture-governance strategies, ceteris paribus.

Figure 4 offers clear quadrants with straightdemarcation lines, but in reality these lines areless important than appreciating the system-wideview in which different permutations of capture-governance strategies stem from diverse growthfoci and understanding that both strategies arerelated to varying levels of vulnerability andresilience. Further, what gives rise to, sustains, andbalances capture and governance strategies are fourreinforcing tactics, which we discuss next.

REINFORCING TACTICS

All organizations must develop areas of distinc-tiveness. Indeed, deciding what product-marketposition to pursue and which factor-market space

6 Kongo Gumi (a temple construction firm in Osaka, Japan)was the world’s oldest independent company, operating for1,429 years, since 578, until it was bought out in 2007.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

332 A. Carmeli, and G. D. Markman

Table 1. A summary of the supporting tactics and their strategic intent

Supporting tactics Strategic intent Dominant quadrant in thecapture-governance matrix

Saving power Capture, repurpose, and redeploy others’ resources NEDo more at others’ expense to facilitate one’s own

economies of scale and scopeStronghold base Reinforce current core competencies NE, SE

Leverage (locally) on core competencies andinitiatives

Isolating and weakening Mitigate the strength of and threat from otherplayers

NE, NW

Weaken rivals prior to engagementsShape rules of engagement to one’s own

advantageForward outposts Create options for and de-risk core expansion and

initiativesNE, NW

Facilitate offensive strikes on rivals’ ‘soft’ pointsEstablish multimarket contacts with rivalsMonitor opponents’ moves in areas outside one’s

own control

to occupy, defining offering scope, and clarifyingwhich resource-capability mix to secure, are vitalfor any firm’s resilience (Markman et al., 2009a).It is a thesis of this study that Rome used sev-eral tactics to complement its capture-governancestrategies and that articulating these tactics shedslight on organizational resilience. Because compet-itive forces exert stern pressure and events rarelygo according to plan, strategy gives shape andmeaning to tactics and is, in turn, carried out bytactics. Hence, tactics are concerned with action,operation, and function, whereas strategy is con-cerned with the use of tactics to achieve organi-zational objectives. The principle is that strategiesdefine tactics, and that tactics without strategies orvice versa are unlikely to invigorate organizationalresilience as they would when deployed together.7

This section and Table 1 reinforce a system-wideview that articulates the intent of tactics, outlinestheir supporting manifestations, and identifies linksbetween these tactics and the permutations of thecapture-governance strategies.

Saving power

Rome’s growth and expansion from a city-statewas aided by saving power, i.e., achieving one’s

7 To echo Sun Tzu, strategy without tactics is the slowest routeto victory, whereas tactics without strategy is the noise beforedefeat (circa 500 BC).

objectives through others. Thus, when Rome real-ized that conquering Latium was beyond its capac-ity, it allied itself with neighboring tribes andcity-states and then used their military capacity tocomplement its own. The renewed Cassius Treatywith the Latin League enabled Rome to push backthe Gauls and cope with the threat of other ene-mies. As indicated earlier, saving power is akin tovarious cooperative and competitive moves seenamong nations and commercial organizations, asevidenced in several arrangements. Trade agree-ments between the United States and Japan in 1986resulted in market partitioning and defined spheresof influence in the semiconductor industry; for awhile, Japanese producers dominated the dynamicrandom access memory niche while U.S. produc-ers led the microprocessor segments (cf. Scherer,1996). Today, China focuses chiefly on manufac-turing, India on services (mainly information tech-nology and engineering8), and Russia on naturalresources. Firms also save power through mar-ket partitioning. The U.S. beer market is dividedamong fewer, but larger, mass-production brew-ers and a slew of smaller microbreweries (Carrolland Swaminathan, 2000). Saving power throughmarket partitioning enables firms to deploy theirresources in a more efficient manner.

8 For example, Wipro is the world’s largest supplier of out-sourced R&D and among the largest business process outsourc-ing providers.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 333

Naturally, meeting the challenges of and defeat-ing each and every opponent is a difficult, com-plex, and probably unlikely task because marketsare populated by diverse firms and it is impos-sible to gauge the threat ex ante and to predicthow much effort would be needed toward thisend. To moderate this uncertainty, the Romans pur-sued their saving power tactics, which ensured thatthe cost of waging wars would be spread out andpassed on, at least to some extent, to its capturedcity-states and allies. Also, as we noted earlier,Rome enjoyed surplus military capacity because(1) it routinely minimized its presence and engage-ment in the daily life of annexed territories; and(2) it converted only few, albeit critical, locationswithin captured city-states into stronghold bases.These practices reduced the reaction time of itsarmed forces and increased the effectiveness ofits resource utilization and capacity maximization,thus strengthening Rome’s domination of large ter-ritories at reduced cost.

We noted how nations and firms leverage onsaving power tactics during hostile engagements,such as capture strategies; but these tactics are use-ful, as well, in non-rivalrous contexts. We alsomaintain that internal resources endowments arealways more limited than those held by all oth-ers (Markman, Gianiodis, and Phan, 2009b); hencethe significance of access to ‘external’ resourceendowments—that is, those resources held by oth-ers—to one’s own longevity. Consider the fol-lowing examples: Merck enjoys a sizable researchand development (R&D) budget, but given thatits budget accounts for only one percent of globalbiomedical research, it now taps into the remain-ing 99 percent by reaching out to players world-wide. In 2008, Procter & Gamble (P&G) captured50 percent of its new technology and innova-tion from other firms. Combined, Merck and P&Gemploy thousands of bright scientists; however, tostrengthen their position at a lower cost, these firmsnow tap into resources (technological and human)owned by others.

Saving power, such as innovation in-sourcing, isimportant because it improves a firm’s absorptivecapacity, lowers its competitive costs, and reducesits vulnerability to technological chock points andrivals’ lockouts (Markman et al., 2009b). Reduc-ing nonproductive resource deployment is alwaysnecessary, but the comparative advantages stem-ming from a focal firm’s strategic, tactical, andoperational agility are directly and proportionately

related to its ability to leverage on the capacityof others and to degrade rivals’ access to or useof their own resources, ceteris paribus. Not sur-prisingly, saving power tactics benefit all firms,but they are particularly valuable for and prevalentamong large, multimarket incumbents that pursueaggressive growth objectives (i.e., NW and NEquadrants).

Stronghold base

Rome understood the importance of Latium as itsstronghold base —or core—for survival and futuregrowth. Consistent with such concepts as corecompetencies (Prahalad and Hamel, 1990) andcore business (Zook, 2004), we define strongholdbase as dominance in a well-defined geo-productspace. Indeed, a 10-year study of more than 2,000firms in a variety of industries shows how mostgrowth strategies fail to create value—and evendestroy wealth—primarily because firms diver-sify far outside their core or their stronghold base(Zook, 2004). Contrast Walmart, which becamethe largest company in the Fortune 500 in 2002,with Kmart, which drifted into bankruptcy thatsame year. Each firm opened its first store in1962, but Walmart applied methodical capture andgovernance strategies of adjacent markets (e.g.,Sam’s Club), while Kmart’s expansion was farremoved from its stronghold base (e.g., WaldenBooks and The Sports Authority). Naturally, fail-ure is a function of diverse and complex fac-tors, but Kmart’s poor combination of capture andgovernance strategies was also symptomatic ofanother problem—an ill-defined and undefendedstronghold base. We see, in both the history ofRome and in Kmart’s case, that a capture strat-egy is counterproductive when a stronghold baseis mismanaged. Put more formally, an ill-definedstronghold base moderates the synergistic relationsbetween capture and governance strategies, render-ing growth and resilience unsustainable.

When the Gauls first halted Rome’s expansionand then defeated it, the prolonged crisis served toclarify Rome’s priorities and strategies, leading tosocial reforms and tectonic governance moderniza-tion, which, in turn, triggered military reorganiza-tion. Gradually, military units became flatter; spansof control were broadened with fewer degrees ofseparation; and the number of hierarchies withincombat units was reduced (Shatzman, 1990). In

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

334 A. Carmeli, and G. D. Markman

other words, as Rome refocused on its strongholdbase, it also became more reflexive.

These historical accounts raise the question: howdoes one reconcile Rome’s reflexive reaction toadversity with the threat-rigidity thesis, wherebythreats increase centralization, formalization, stan-dardization, and routinization, thus yielding rigid-ity that ossifies flexibility and compels firms toreact improperly to adversity (Staw, Sandelands,and Dutton, 1981)? While most conceptualizationsof the threat-rigidity thesis focus on single crisisreaction events, our research shows that multi-ple crisis reaction events allowed Rome to shapecompetencies to withstand diverse dangers andto become more resilient. Also, while crises areusually sudden and externally caused, many ofRome’s adverse encounters were self-caused, grad-ual, and well anticipated. Interestingly, Rome’shistory is also consistent with learning theory inwhich, as a prelude to future crises, firms initi-ate preadaptive changes—they use latent threats toregenerate flexibility, learning, renewal and even-tually resilience. Similarly, research shows thatin adverse environments, some firms decentralizetheir control, and become more open to new ideasand opinions (Eisenhardt, 1989; Krishnan, Miller,and Judge, 1997; Sharfman and Dean, 1997).

Management science confirms that crisis,brought about by fierce competition, imposes astrong refocusing effort on the stronghold base,usually through operational changes (Osterman,1996; Rajan and Wulf, 2006; Whittington et al.,1999). In addition, experiences of failure and learn-ing from these events help organizations to adaptto the environmental changes (Carmeli & Sheaf-fer, 2008). Interestingly, these changes to refo-cus a stronghold base are not driven by alterna-tive explanations, such as reduced business capac-ity, improvements in communication technology,location factors, and a host of or other expla-nations (Guadalupe and Wulf, 2008). Facilitatedby flattened hierarchies, a focused stronghold basepushes decision-making authority downward, thusimproving the ability of firms to cope with uncer-tainty, disorder, and the fluidity of competitivemarkets. Indeed, as international competition inten-sifies, CEOs increase their delegation of author-ity to local managers (Aghion and Tirole, 1997).These recent findings are consistent with earlierwork (cf. Greiner, 1972) and contingency theory(Galbraith, 1977; Lawrence and Lorsch, 1967),

but for our purposes it is important to empha-size that crises are test points in the evolutionof firms (Carmeli & Schaubroeck, 2008); theymotivate restructure of operations, rearrangementof assets, reconsideration of resource-capabilitymixes, and recommitment to a focused and well-defined stronghold base. A firm’s redesign of itsstronghold base is not limited to emergencies andcrises, such as swift gales of creative destruction orturbulent markets; in fact, it can also be a steady,ongoing response to declined strategies and grad-ual atrophy.

In sum, Rome’s timeless strategic precept is thatbuilding dominance in a well-defined strongholdbase—prior to implementing growth strategies—is a key driver of organizational longevity andan invaluable platform for future expansion. Afocused stronghold base is critical to all firms in allindustries, regardless of growth orientation. How-ever, our framework, supported by the evidencepresented thus far, confirms that this tactic is par-ticularly important among NE-quadrant inhabitantsand among firms that pursue resilience throughsmallness (i.e., SE quadrant). In addition, while astronghold base is used infrequently by NW inhab-itants, its use is particularly rare among those whoneed it most—SW-quadrant inhabitants.

Isolating and weakening

Rome’s capture and governance strategies werealso supported by isolate and weaken tactics.9

For example, to defeat Veii with minimum effort,Rome first captured Fidenae; a move that cutoff Veii from supplies and allied support andthus weakened its fighting capability, while givingRome a robust bridgehead for a stronger attack.By isolating, weakening, dividing, and control-ling its opponents, Rome created several city-stateclasses—ranging from hostile to collaborative.City-states that defied Rome paid a heavy price;as noted earlier, their leaders were killed or exiledand their properties were repurposed. On the otherhand, those considered loyal stood a chance to

9 The isolate and weaken tactic is quite similar to divide andcontrol, but the concepts are not identical. Isolating means quar-antining adversaries, whereas dividing refers to splitting theminto subgroups. Weakening implies diminishing the strength ofadversaries, whereas controlling is the act of dominating them.Finally, the former tactic tends to precede the latter (e.g., eco-nomic sanctions and no-flight zones in 1990s preceded the U.S.invasion of Iraq in 2003).

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 335

better themselves and their subjects by becom-ing an integral part of Rome. Isolate and weakentactics are currently used by nonmarket playersto attack market players. Unions frequently pullemployees off work and into picket lines in aneffort to isolate, weaken, and pave the way formore favorable contract settlements, such as con-cessions in health and pension benefits, work rules,and compensation, which severely reduces firms’competitiveness. Consider, also, how some firmswage proxy rivalry by forcing their rivals to switchresources from productive uses to defensive expen-ditures (Markman et al., 2009a). In the $19 billiondietary supplement industry, large firms used non-market players, such as trade groups and lobbyists,to tighten Food and Drug Administration standardson the manufacturing, packaging, and labeling ofdietary supplements. As expected, the new stan-dards imposed a significant economic burden onmany of the smaller players, forcing them to eitherchange product lines or go out of business.

The principle of isolating and weakening oppo-nents is critical for organizational resilience andlongevity; it reinforces the adage that once a firmgains dominance, it must take decisive action todefend its position (Greenwald and Kahn, 2005).To echo Peteraf (1993), a strong position posesex post limits to competition. This nuance goesbeyond the notion of static entry barriers, empha-sizing a more dynamic approach: firms segmentrivals according to threat and enmity levels—neu-tralizing or co-opting the more benign players andtaking stronger action to defeat the more hostileadversaries.

Isolate and weaken tactics also aim to discovervulnerability points that, once exploited effec-tively, can bring about new industry logic whilereducing rivals’ ability to fight back. Once Romeidentified its enemies’ Achilles’ heel, it rapidlymarshaled resources to attack them at those points.In a similar vein, in the mid 1990s, commer-cial airlines began to use the Internet to interfacedirectly with customers, thus isolating and weak-ening travel agents. Once the number of onlineorders reached a critical mass, Delta Airlines sur-prised travel agents by slashing commissions, from10 percent to a flat $50, and then to $35 perticket. Other players (not only airlines) swiftlyemulated Delta’s move and gradually decliningcommissions threatened intermediaries’ longevity.These intermediaries had miscalculated the extentof their isolation and the degree to which the

Internet had accelerated new industry logic thatfavors service creators (cf. Clemons and Santa-maria, 2002; Evans and Wurster, 2000). Like-wise, in the long-distance telephone market ofthe early 1980s, MCI exploited AT&T’s vulner-ability—aging copper cable technology—when itdeployed wireless microwave technology and laidhigher-capacity fiber optic lines. MCI also lodgedand won litigation that forced AT&T to grantother carriers access to its circuits, thus enablingMCI to access AT&T’s customers. Finally, MCIattacked AT&T in less-defended geographical mar-kets, where initial successes provided the capitalfor further expansion. We now know that the strongisolate and weaken tactics have accelerated MCI’sgrowth, but its weak governance strategy com-promised its resilience. As expected, isolate andweaken tactics are particularly prevalent amongNE- and NW-quadrant inhabitants.

Forward outposts

Rome also used colonies, their forward outposts,to boost its governance in new territories. As notedearlier, the Romans placed their colonies in strate-gic locations—shores, ports, transportation arter-ies, and overpasses with significant military andpolitical implications. Of course, companies do notestablish colonies per se, but they do, similarly, setforward operations to extend their spheres of influ-ence, save power, and capture or repurpose lesscostly resources. For example, firms set outpostsin unprofitable market segments, as Microsoft didwith its stakes in MSN and MSNBC (D’Aveni,1999, 2004). Such moves dilute economies of scaleand, hence, do not help leverage core competen-cies, but they do reveal deeper tactical intents—theestablishment and sustenance of balance of powerin an industry, and the deterrence of competi-tors. Johnson & Johnson (J&J) and P&G holdoutposts in their respective stronghold bases orcore markets (D’Aveni, 2004). By setting forwardpositions in rivals’ markets, multimarket firmsengender and sustain mutual forbearance (Mark-man et al., 2009a). For example, rather than fight-ing each other on multiple fronts, J&J has focusedon medical equipment and hospital supplies whileP&G has focused on the consumer product market.This market partitioning allows P&G to competemore effectively with Unilever while saving J&J’spower (D’Aveni, 2004). While Rome set colonies

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

336 A. Carmeli, and G. D. Markman

in geographical locations, firms choose to set for-ward outposts—workflows, R&D facilities, andother value-creating operations—in those strate-gic locations where they will be most effective.Off-shoring (i.e., setting business operations in dis-tant locations) saves power; when done correctly,it achieves better use of resources and capabilities,and more agile and reflexive value chains, thusenhancing organizational resilience.

Of course, expansions—for example, interna-tionalization, M&A, joint ventures, and so forth—bring new vulnerabilities, complexity (Vermeulenand Barkema, 2002), and confidence traps (Zollo,2007). To strengthen their resilience and prolongtheir longevity, then, firms must learn how todetach links in their value chain and how to selectthe most suitable sites for certain activities; theymust also develop competencies that will enablethem to manage the complexity of long-distancegovernance, and capabilities to decouple opera-tions while they accomplish tasks with no loss inquality and reliability. Failure to use these tac-tics has weakened global automakers. The BigThree U.S. automakers started off-shoring almosttwo decades ago, but the percentage of partssourced from low-cost economies still remains inthe single digits (e.g., fewer than five percentof all their R&D is carried out in the develop-ing countries). Contrast this level of forward out-posts with that of APC, a Rhode Island companythat makes cooling and surge protection devices.Most APC customers are in the United States andEurope, its home base, but more than 85 percentof the company’s products are manufactured in thePhilippines and India. Of course, power protec-tion devices and vehicles are not quite comparable,but well-leveraged forward outposts entail morethan the ‘usual suspects’—modularized, customer-facing activities (e.g., sales, accounting, diag-nostics, and tech support). High-impact forwardoutposts embrace off-shoring of major, back-officeprocesses, and even legacy operations (e.g., R&Dand other back-office activities), as practiced byMicrosoft, Intel, Motorola, Google, Cisco, IBM,HP, and many others.

Maintaining positions in peripheral markets andextending spheres of influence can provide firmswith early warning signs about market dynam-ics, thus increasing their shock-absorbing capac-ity against decline. Unlike core markets, whichare critical for firm longevity, small outposts andniche positions have limited economic utility, so

they are expendable buffer zones (D’Aveni, 2004).Some of these outposts might become critical mar-ket areas in the future, so from an option-theoryperspective, they provide hedges against marketshifts—even without specific rivals or offerings inmind. Because these outposts are located in rivals’territories, they are particularly useful for reinforc-ing mutual forbearance, but they can also functionas offensive, front-line positions to challenge arival’s core (Markman et al., 2009a). To borrowfrom D’Aveni (2004), Microsoft’s diverse forwardoutposts counter a slew of rivals in the marketfor personal digital assistants (PDAs), handhelddevices, gaming systems (Xbox), and other con-sumer products. Microsoft is unlikely to displaceall players or dominate each of these markets, butits outposts deter and weaken would-be rivals, thusenhancing its resilience.

As with the isolate and weaken tactics, the for-ward outposts are particularly widespread amongNE- and NW-quadrant inhabitants; they are lesspractical and hence uncommon among SE- andSW-quadrant inhabitants.

DISCUSSION

This research explains how organizations attainand sustain their resilience to prolong their longe-vity. Using the case of the Republic of Romeand investigating its history, we provide a deeperunderstanding of two generic strategies and fourcorresponding tactics, which, ex nihilo as it were,formed the building blocks for Rome’s legacyas one of the most resilient organizational sys-tems in world history. Broadly, our research offersseveral contributions. First, it calls attention tocapture and governance as generic strategies thatmust be fused synchronously and recursively toshape a firm’s growth and longevity. Second,it provides insights into why and when differ-ent permutations of capture-governance strategiesmay yield varying levels of resilience. Third, theresearch stresses that capture-governance strate-gies are essential but insufficient, as they requirefour supporting tactics—saving power, maintain-ing a stronghold base, isolating and weakeningadversaries, and creating forward outposts—iforganizational resilience is to be sustained. Finally,our study offers an internally consistent, system-wide perspective that cascades abstract conceptsinto (i) tangible and concrete actions firms take to

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 337

prolong their longevity, and; (ii) measurable con-structs that scholars can study to advance knowl-edge on resilience. In so doing, we not only shedlight on competitive dynamics and interfirm rivalrybut we also expand the vistas and explain why,how, and with what consequences the combinationof two generic strategies and four tactics enablesorganizational resilience.

Some critics might worry that each constructwe featured, by itself, is not overly novel. Weagree. What is quite novel, useful, and nonob-vious, however, are (i) the system-wide view ofthe interactions between the generic strategies andthe supporting tactics; and (ii) the articulation ofthe conditions under which the strategies andtactics would be most critical for resilience. Touse an analogy, years before resource-based view(RBV) was formalized as a useful theory, resourceattributes (e.g., valuable, rare, inimitable, and non-substitutable) were quite ‘obvious’ and not toonovel. When, however, scholars began to spec-ify how together these resources yield competitiveadvantage, they made substantial contributions toour field. Similarly, by itself, the bargaining powerof customers is neither a novel nor unique concept;in fact, the origin of the construct appears evenbefore the early framing of resource-dependencetheory (Pfeffer, 1982; Pfeffer and Salancik, 1978;Salancik, 1979). Yet, when Michael Porter intro-duced the five forces framework for analyzingindustry structure and business strategy in the1980s, it became a powerful conceptual tool. Weare not claiming that our contribution is equal tothat of RBV or the five forces framework; farfrom it. We simply point out that conceptual claritydevelops from appreciating how seemingly ‘trivial’or ‘unrelated’ constructs are actually connected; inour case, how generic strategies and specific tacticsinterlace to improve organizational resilience.10

Acknowledging the different permutations ofcapture-governance strategies also counteracts aprevailing assumption that growth and dominanceare the sole or primary drivers of resilience. In fact,the capture-governance matrix shows that firmsthat pursue governance strategies without capturestrategies can actually endure for a long time,albeit in the shadow of bigger and stronger players.Given the strong bias toward either fast or steadygrowth (respectively, NW and NE quadrants), thisis perhaps the most counterintuitive insight of this

10 We thank an anonymous reviewer for raising this issue.

matrix. In addition, because of its attention to awider range of tactics and to their synchronousinteractions with two generic strategies, the matrixexplains why some organizations become increas-ingly resilient whereas others become progres-sively more vulnerable. This demonstrates thatbuilding a repertoire of strategy-tactic combina-tions is critical for realizing the full potential oforganizational resilience. The topic is conceptuallyinteresting and practically useful because it offers asystem-based theory as to why and when resilienceis bound to increase or decrease.

As with system thinking, the case of Romedetails the emergence of complementary strategiesand reinforcing tactics that served the Romans forhundreds of years, and made resilience more pre-dictable, specifiable, and repeatable. In a sense,our framework shows how a complex, human-made system can maintain continuity and cultivateresilience even in the face of severe jolts. Thiscontributes to research on ambidextrous organiza-tions, which points out that firms can thrive whenthey muster and master the skills to pursue differ-ing strategic orientations (Chen and Katila, 2008;March, 1991; Tushman and O’Reilly, 1996, 2004).Rome’s ambidexterity—how it utilized four tac-tics to sharpen its capture and governance strate-gies—created a resilient yet reflexive organization.We stress that these strategies and tactics madeRome highly reflexive because, as history shows,organizational reflexivity enforces industry logicthat compels others to perpetually react or adaptto such imposing moves.

While the concept of resilience is not new, thesystem view, the links among the strategies andtactics, and their specificity are novel, useful, andnonobvious. Collectively, they constitute the ana-lytics by which executives and scholars can assesscomplex rivalrous situations, and make effectivedecisions about growth and longevity. Not onlydoes the case of Rome tell a cohesive story, itactually injects a dynamic impetus to earlier frame-works and provides a more holistic and nuancedperspective of resilience. Further, the focus onmicromechanisms, longevity, and the applicabilityto large enterprises as well as small players departsfrom earlier work, which focuses on competitiveadvantage and is primarily useful for larger, domi-nant players who seek market supremacy (D’Aveniet al., 2001). Our system-wide view explains whyincumbents who appear to grow at a nice clip maysuddenly stall and even decline; such reversals are

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

338 A. Carmeli, and G. D. Markman

especially acute when firms mismanage the inter-sections of and interactions between strategies andtactics.

Drawing lessons from Rome’s past created astrategy-tactic framework that is applicable tofirms today. Consider, for instance, how compa-nies that use the same suppliers, specialized labor,and distribution channels co-locate, agglomerate,and form economies-of-scale clusters. In Monter-rey, Mexico, an appliance cluster includes forwardoutposts of many large foreign firms—Whirlpool,Carrier, Criotec, Hussman, IMPCO Technologies,LG Electronics, Mabe, York—and over 200 small,local players. Players who co-locate their forwardoutposts in a cluster save power; they buy materi-als jointly, ship and transport together, share laborand support services, and increase their capac-ity without bearing the costs of building inde-pendent factories and extended value networks.Because forward outposts in a cluster also facili-tate the exchange of information and collaboration,they can simplify, de-risk, and accelerate businessfunctions. Commercial outposts also reduce uncer-tainty about environmental shifts and opponents’intentions and capabilities. These are anecdotalexamples, but they are consistent with Rome’splacement of forward outposts to enhance its abil-ity to enter, govern, and expand territories thatinitially were beyond its reach.

Limitations and future research

As with all research, here too there are severallimitations, and hence opportunities, for futureresearch. First, case-based research can limit broadtheoretical inferences. This limitation notwith-standing, Siggelkow (2007 : 20) notes that ‘it isoften desirable to choose a particular organiza-tion precisely because it is very special in thesense of allowing one to gain certain insights thatother organizations would not be able to provide.’This view is not unusual (Eisenhardt and Graebner,2007; Suddaby, 2006). While Rome represents asingle case study, its diverse, long, and rich histor-ical data, coupled with an inductive methodologybegins to demystify the critical drivers of organi-zational resilience.

Second, the dispersed digital infrastructures andthe capability to unbundle business activities sug-gest that firms now govern their activities in waysthat were unfathomable just a few decades ago(and certainly unknowable to Rome). Consider

the following ‘recent’ changes. Advances in trans-portation and communication infrastructures in the1900s—railroads, telegraph, and eventually thetelephone—facilitated the rise of multidivisionalenterprises (e.g., General Electric, DuPont, Gen-eral Motors, and AT&T). At that time, a largefirm organized by integrating much of its activitiesinternally—product and service development, cus-tomer and employee relations, and the like. Today,many firms organize by unbundling even criticalactivities to specialists; they farm out the chores oflogistics to FedEx and UPS; call centers to Con-vergys; contract manufacturing to Flextronics; andinnovation to InnoCentive. Changes in how firmsorganize—including variations in their businessmodels—do not diminish the lessons from Rome’shistory, because activities and functions are guidedby fit-enhancing strategy-tactic permutations (Yinand Zajac, 2004). Still, given the conceptual prox-imity between strategies, tactics, and how firmsorganize, future research could assess how thesechanges influence organizational resilience. Simi-larly, our study focuses on resilience at the firmlevel, but future research might explore resilienceas it applies to entire value networks.

A third opportunity for future research stemsfrom the fluidity of competitive landscapes whereineach supporting tactic might ‘merge’ with another.As we noted upfront, neither capture and gover-nance strategies nor their supporting tactics shouldbe considered in isolation because they all influ-ence and are shaped by market and nonmarket con-ditions—creating a continuous, fluctuating flowof strategy-tactic permutations. Future research,then, might refine our framework by studying morespecific fit-enhancing, strategy-tactic permutationsand whether the lessons from Rome continue tohold even in fast-paced, complex, fluid, and moreuncertain business environments.

Despite the oft-cited analogies between nationsand businesses, the marketplace is not, after all,a battlefield, and even the best lessons fromhistory are not to be applied indiscriminately tobusiness contexts. That said, our strategy-tacticframework is relevant to businesses pre-cisely because it articulates specific actions firmscan take to enhance their resilience. For instance,the lessons of outflanking rivals rather than over-powering them, targeting their weaknesses, render-ing them incapable of retaliation, and capturingand repurposing their resources are useful for all

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 339

firms wishing to increase their resilience with min-imal deployment of their own resources. While thelesson for small players and entrepreneurs is alsoclear—that is, resilience and longevity throughsmallness—future research might explore whetherlarger, multibusiness corporations can increasetheir resilience by giving their business unitsgreater autonomy.

Finally, organization’s resilience is critically tiedto issues of vulnerabilities. Because moves tend toelicit countermoves, managers and scholars shouldrecognize that, as we improve our understandingof competitive dynamics and resilience, more play-ers use the very same concepts and frameworksto set new rules of engagement, to unlevel theplaying field, and to shape spheres of influence intheir favor. And when firms allocate their resourcesto one area, perhaps in an effort to defend theirposition or expand outwardly, they usually faceresource constriction—and increased vulnerabil-ity—elsewhere. We did not attend to issues ofvulnerability in greater detail and did not addressthe problem of decline, but we suspect that these,too, would be fertile areas for future research.

CONCLUSION

The importance of organizational resilience is welldocumented in the literature; however, researchhas not converged on a unifying model that artic-ulates what firms can do to extend their longevity.Though there is recognition that organizationsmust change and adapt in order to survive andthrive, and there is an appreciation that genericstrategies and supporting tactics are important ingeneral, this is the first effort to gain an in-depth understanding about the ways strategiesand tactics interact and reinforce each other toenhance resilience and longevity. Our in-depthanalysis of the history of Rome reveals the powerof both capture and governance strategies andtactics—saving power, maintaining a strongholdbase, isolating and weakening adversaries, and cre-ating forward outposts—that shape a complex, yethighly resilient human-made system. While eachof the strategies and supporting tactics is a valuableconcept on its own, the utility for organizationallongevity is most fully realized when they are alllinked together under a system view. And just as

strategies are insufficient, and, in fact, counter-productive when stripped of their supporting tac-tics, so are tactics in the absence of overarchingstrategies. Given that market turbulence, economicvolatility, and the costs of disbandment are increas-ing, we suspect that the quest for even a morenuanced framework of organizational resiliencewill continue as well.

ACKNOWLEDGEMENTS

We thank Editor Ed Zajac and two anonymous(and patient) reviewers. We also thank RichardA. D’Aveni, Ephraim David, Nicolai Foss, MosheFarjoun, Peter Gianiodis, Eli Segev, and ZacharySheaffer for their helpful comments on earlierdrafts of the manuscript. We also appreciate theparticipants who made suggestions during theresearch seminars in the Department of IndustrialEconomics and Strategy and the Department ofManagement, Politics and Philosophy at Copen-hagen Business School. All remaining errors andomissions are entirely our own.

REFERENCES

Aghion P, Tirole J. 1997. Formal and real authorityin organizations. Journal of Political Economy 105:1–27.

Aldrich H. 1999. Organizations Evolving . Sage: London,U.K.

Aupperle KE. 1996. Spontaneous organizational recon-figuration: a historical example based on Xenophon’sAnabasis. Organization Science 7: 445–460.

Bellak C. 2005. Adjustment strategies of multinationalenterprises to changing national competitiveness.International Journal of the Economics of Business 12:139–162.

Birkinshaw J, Hamel G, Mol MJ. 2008. Managementinnovation. Academy of Management Review 33:825–845.

Burgelman RA, Grove AS. 2007. Let chaos reign, thenrein in chaos—repeatedly: managing strategic dynam-ics for corporate longevity. Strategic ManagementJournal , 28: 965–979.

Calori R, Lubatkin M, Very P, Veiga JF. 1997. Modellingthe origins of nationally-bound administrative her-itages: a historical institutional analysis of French andBritish firms. Organization Science 8: 681–696.

Carroll GR, Swaminathan A. 2000. Why the microbrew-ery movement? Organizational dynamics of resourcepartitioning in the U. S. brewing industry. AmericanJournal of Sociology 106: 715–762.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

340 A. Carmeli, and G. D. Markman

Carmeli A, Schaubroeck J. 2008. Organisational crisis-preparedness: The importance of learning fromfailures. Long Range Planning 41: 177–196.

Carmeli A & Sheaffer Z. 2008. How Learning Leadershipand Organizational Learning from Failures EnhancePerceived Organizational Capacity to Adapt to theTask Environment. Journal of Applied BehavioralScience 44: 468–489.

Chen EL, Katila R. 2008. Rival interpretations ofbalancing exploration and exploitation: simultaneousor sequential? In Handbook on Technology andInnovation Management , Shane S (ed). Wiley: NewYork; 197–214.

Clausewitz CV. 1827/1976. On War . Howard M, Paret P(trans./eds). Princeton University Press: Princeton, NJ.

Clemons EK, Santamaria JA. 2002. Maneuver warfare:can modern military strategy lead you to victory?Harvard Business Review 80: 56–65.

Collins JC. 2001. Good to Great: Why Some CompaniesMake the Leap. . .and Others Don’t. HarperCollins:New York.

Collins JC, Porras JI. 1994. Built to Last . HarperBusi-ness: New York.

Cornell TJ. 1995. The Beginnings of Rome: Italy andRome from the Bronze Age to the Punic Wars (c.1000–264 BC). Routledge: London, U.K.

D’Aveni RA. 1999. Strategic supremacy through disrup-tion and dominance. MIT Sloan Management Review40(3): 127–135.

D’Aveni RA. 2004. Corporate spheres of influence. MITSloan Management Review 45(4): 38–46.

D’Aveni RA, Gunther R, Cole J. 2001. Strategic Supre-macy: How Industry Leaders Create Growth, Wealth,and Power through Spheres of Influence. Free Press:New York.

Eisenhardt KM. 1989. Building theories from case studyresearch. Academy of Management Review 14(4):532–550.

Eisenhardt KM, Graebner ME. 2007. Theory buildingfrom cases: opportunities and challenges. Academy ofManagement Journal 50: 25–32.

Evans P, Wurster TS. 2000. Blown to Bits. The BostonConsulting Group, Inc. Harvard Business SchoolPress: Boston, MA.

Galbraith JK. 1977. The Age of Uncertainty . HoughtonMifflin: Boston, MA.

Ghemawat P. 1991. Commitment: The Dynamic ofStrategy . Free Press: New York.

Gibbon E. 1778/1994. The History of the Decline and Fallof the Roman Empire. Penguin Books: New York.

Greenwald B, Kahn J. 2005. Competition Demystified: ARadically Simplified Approach to Business Strategy .Portfolio: New York.

Greiner LE. 1972. Evolution and revolution as organiza-tions growth. Harvard Business Review 50: 37–46.

Guadalupe M, Wulf JM. 2008. The Flattening Firmand Product Market Competition: The Effect ofTrade Liberalization. Working Paper 09–067. Har-vard Business School, Boston, MA. Availableat: http://www.hbs.edu/research/pdf/09-067.pdf. (28August 2009).

Hamel G, Valikangas L. 2003. The quest for resilience.Harvard Business Review 81: (September): 52–63.

Heurgon J. 1973. The Rise of Rome to 264 B.C. Willis J(trans). University of California Press: Berkeley, CA.

Kennedy P. 1987. The Rise and Fall of the Great Powers:Economic Change and Military Conflict from 1500 to2000 . Random House: New York.

Klein KE. 2002. The bottom line on startup failures.BusinessWeek Online. 4 March. Available at: http://www.businessweek.com/smallbiz/content/mar2002/sb2002034 8796.htm. (28 August 2009).

Krishnan HA, Miller A, Judge WQ. 1997. Diversificationand top management team complementarity: isperformance improved by merging similar ordissimilar teams? Strategic Management Journal18(5): 361–374.

Lawrence P, Lorsch J. 1967. Differentiation and integra-tion in complex organizations. Administrative ScienceQuarterly 12: 1–30.

Locke EA. 2007. The case for inductive theory building.Journal of Management 33: 867–890.

Lovallo D, Viguerie P, Uhlaner R, Horn J. 2007. Dealswithout delusions. Harvard Business Review 85:92–99.

Lubatkin MH, Lane PJ, Collin S-O, Very P. 2005.Origins of corporate governance in the USA, Swedenand France. Organization Studies 26: 867–888.

Luttwak EN. 1976. The Grand Strategy of the RomanEmpire. Johns Hopkins University Press: Baltimore,MD.

March JG. 1991. Exploration and exploitation inorganizational learning. Organization Science 2:71–87.

Markman, GD, Gianiodis PT, Buchholtz AK. 2009a.Factor-market rivalry. Academy of ManagementReview 34: 423–441.

Markman GD, Gianiodis PT, Phan PH. 2009b. Supply-side innovation and technology commercialization.Journal of Management Studies 46: 625–649.

Morris JR. 2009. Life and death of businesses: a reviewof research on firm mortality. Journal of BusinessValuation and Economic Loss Analysis 4(1): Article3.

Nelson RR. 1996. The evolution of comparative orcompetitive advantage: a preliminary report on astudy. Industrial and Corporate Change 5: 597–617.

Nicolet C. 1991. Space, Geography, and Politics in theEarly Roman Empire. University of Michigan Press:Ann Arbor, MI.

Osterman P. 1996. Broken Ladders: Managerial Careersin The New Economy . Oxford University Press: NewYork.

Paret P. 1965. Clausewitz: a bibliographical survey.World Politics 17: 272–285.

Peikoff L. 2007. Induction in physics and philosophy(taped lectures). Available at www.aynrandbookstore.com (28 August 2009).

Peteraf MA. 1993. The cornerstones of competitiveadvantage: a resource-based view. Strategic Manage-ment Journal 14(3): 179–191.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj

Competitive Strategy and Resilience 341

Peters T, Waterman RH. 1982. In Search of Excellence:Lessons from America’s Best-run Companies . Harper-Collins: New York.

Pfeffer J. 1982. Organizations and Organization Theory .Pitman: Marshfield, MA.

Pfeffer J, Salancik GR. 1978. The External Control ofOrganizations: A Resource Dependence Perspective.Harper & Row: New York.

Porter ME. 1990. The Competitive Advantage of Nations .Free Press: New York.

Porter ME. 1996. What is strategy? Harvard BusinessReview 74: 61–78.

Prahalad CK, Hamel G. 1990. The core competence ofthe corporation. Harvard Business Review 68: 79–91.

Rajan RG, Wulf J. 2006. The flattening firm: evidenceon the changing nature of firm hierarchies from paneldata. Review of Economics and Statistics 88: 759–773.

Rothaermel FT, Hill CWL. 2005. Technological disconti-nuities and complementary assets: a longitudinal studyof industry and firm performance. Organization Sci-ence 16(1): 52–70.

Salancik GR. 1979. Interorganizational dependence andresponsiveness to affirmative action: the caseof women and defense contractors. Academy ofManagement Journal 22(2): 375–394.

Salmon ET. 1967. Saminite and the Samnites . CambridgeUniversity Press: London, U.K.

Salmon ET. 1969. Roman Colonization under theRepublic. Thames & Hudson Press: London, U.K.

Scherer FM. 1996. Industry Structure, Strategy, andPublic Policy . HarperCollins College: New York.

Sharfman MP, Dean JW. 1997. Flexibility in strategicdecision making: informational and ideologicalperspectives. Journal of Management Studies 34:191–217.

Shatzman I. 1990. A History of the Roman Repub-lic[Toldot ha-republikah ha-Romit (Toldot ha-olam ha-klasi) (Hebrew edn.)] Magnes: Jerusalem, Israel.

Siggelkow N. 2007. Persuasion with case studies.Academy of Management Journal 50: 20–24.

Staw BM, Sandelands LE, Dutton JE. 1981. Threatrigidity effects in organizational behavior: a multilevelanalysis. Administrative Science Quarterly 26(4):501–524.

Stinchcombe AL. 1965. Social structure and organiza-tions. In Handbook of Organizations , Marsh JG (ed).Rand-McNally: Chicago, IL; 142–193.

Suddaby R. 2006. What grounded theory is not. Academyof Management Journal 49: 633–642.

Sutcliffe KM, Vogus TJ. 2003. Organizing for resilience.In Positive Organizational Scholarship: Foundationsof a New Discipline, Cameron KS, Dutton JE,Quinn RE (eds). Berrett-Koehler: San Francisco, CA;94–121.

Tuchman BW. 1985. The March of Folly: From Troy toVietnam . Knopf: New York.

Tushman ML, O’Reilly CA. 1996. Ambidextrous orga-nizations: managing evolutionary and revolutionarychange. California Management Review 38: 8–30.

Tushman ML, O’Reilly CA. 2004. The ambidextrousorganization. Harvard Business Review 82: 74–81.

Vermeulen F, Barkema H. 2002. Pace, rhythm, andscope: process dependence in building a profitablemultinational corporation. Strategic ManagementJournal 23(7): 637–653.

Whittington R, Pettigrew A, Peck S, Fenton E, ConyonM. 1999. Change and complementarities in thenew competitive landscape: a European panel study,1992–1996. Organization Science 10: 583–600.

Yin X, Zajac EJ. 2004. The strategy/governance structurefit relationship: theory and evidence in franchisingarrangements. Strategic Management Journal 25(4):365–383.

Zollo M. 2007. Superstitious learning revisited: out-come ambiguity and confidence traps in corporateacquisitions. Working paper, INSEAD: Fontainebleau,France.

Zook C. 2004. Beyond the Core: Expand Your MarketWithout Abandoning Your Roots . Harvard BusinessSchool Press: Boston, MA.

Copyright 2010 John Wiley & Sons, Ltd. Strat. Mgmt. J., 32: 322–341 (2011)DOI: 10.1002/smj