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Sustainability 2016, 8(3), 217; doi:10.3390/su8030217

Development of a Resource Allocation Model Using Competitive Advantage

1
Department of Interaction Science, Sungkyunkwan University, Seoul 03063, Korea
2
Department of Industrial and Management Engineering, Hanyang University, Ansan 15588, Korea
3
Department of Mechanical Engineering, Hanyang University, Ansan 15588, Korea
4
School of Business Administration, Chung-Ang University, Seoul 06974, Korea
*
Author to whom correspondence should be addressed.
Academic Editor: Sangkyun Kim
Received: 30 September 2015 / Revised: 26 January 2016 / Accepted: 27 January 2016 / Published: 29 February 2016
View Full-Text   |   Download PDF [1006 KB, uploaded 29 February 2016]   |  

Abstract

In general, during decision making or negotiations, the investor and the investee may often have different opinions which result in conflicts. So, an objective standard to mitigate potential conflicts between investors and investees should be provided since it is highly important that rational decisions must be made when choosing investments from various options. However, the models currently used come with some problems for several reasons, for instance, the arbitrariness of the evaluator, the difficulty in understanding the relationships that exist among the various investment options (that is, alternatives to investments), inconsistency in priorities, and simply providing selection criteria without detailing the proportion of investment in each option or evaluating only a single investment option at a time without considering all options. Thus, in this research, we present a project selection model which can enable reasonable resource allocation or determination of return rates by considering the core competencies for various investment options. Here, core competency is based on both performance and ability to create a competitive advantage. For this, we deduce issue-specific structural power indicators and analyze quantitatively the resource allocation results based on negotiation power. Through this, it is possible to examine whether the proposed project selection model considers core competencies or not by comparing several project selection models currently used. Furthermore, the proposed model can be used on its own, or in combination with other methods. Consequently, the presented model can be used as a quantitative criterion for determining behavioral tactics, and also can be used to mitigate potential conflicts between the investor and the investee who are considering idiosyncratic investments, determined by an interplay between power and core competency. View Full-Text
Keywords: resource allocation; competitive advantages; idiosyncratic investments; power resource allocation; competitive advantages; idiosyncratic investments; power
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Lee, S.; Ahn, S.; Park, C.; Park, Y.-J. Development of a Resource Allocation Model Using Competitive Advantage. Sustainability 2016, 8, 217.

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