Two of the founding pillars of corporate strategy research are Penrose’s (1959) development of the critical role of firm resources and their accumulation for the scope of the firm and Chandler’s (1962) examination of the relationship between a firm’s organizational structure and its scope...

The resource-based perspective on firm diversification, subsequent to Penrose (1959), has focused primarily on the fungibility of resources across domains. We make a clear analytical distinction between scale-free capabilities and those that are subject to opportunity costs and must be allocated...