Corporate diversification strategy and divestment using an integrated TCE-RBV theoretical framework

In Essay 1, utilizing transaction cost economics and the resource-based view, I develop an integrated theoretical framework to examine the role of both internal governance costs and the economic advantages of resource leveraging and strategic fit in determining a manageable strategic scope for the firm, and its potential impact on corporate divestment. This paper contributes to our understanding of divestment by highlighting the importance of the firm's corporate scope, in terms of the extent and nature of diversification, on the decision to divest. I find that related and unrelated product diversification, by affecting both internal and external complexity differently, exhibit different relationships with regards to corporate divestment. In Essay 2, I seek to consolidate the fragments of the theory of the firm, currently scattered throughout the literature, into a single document in order to present a more coherent exposition. As part of this process, I explicitly include competitive advantage, as well as the explanation and clarification of the distinctive motivations underlying resource internalization (the creation of the firm) and diversification (scope expansion). I clarify the insights provided by two theoretical streams central to the field of strategy---transaction cost economics (TCE) and the resource-based view (RBV). In Essay 3, I propose an integrated model of CEO dismissal that acknowledges the role of the firm's broader governance context, thus arriving at a better understanding of the conditions that lead to CEO dismissal. In particular I examine investment analysts and institutional investors: important external constituents that, in their respective roles as information intermediaries and informed investors with sizeable holdings, have a powerful influence on how the board evaluates the CEO.