Surviving the Cut: DoD Program Cancellations and Firm Strategic Capabilities in Complex Industries

• Main Author: Baker, Jeffrey Edwin
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01.01.2021
• Subjects: Competition; Competitive advantage; Decision making; Defense industry; Document management; Management; Military studies
• ISBN: 9798426864771

The purpose of this study is to establish a theoretical and empirical link between the capabilities of firms that produce Complex Products and Systems (CoPS) in the U. S. defense industry and program cancellations. Using a capabilities theoretical lens, in which specific strategic capabilities impact the outcomes of a firm’s programs, I theorize that firms with an increased capability to manage Mutually Reinforcing Portfolios reduce the likelihood of program cancellation. I also theorize that firms with greater Corporate Political Capability reduce the likelihood of program cancellation. Additionally, the study empirically tests the deeply held beliefs that cost overruns, schedule overruns, and program scope changes impact program cancellation in the Department of Defense. Using survival analysis, I analyzed 118 major defense acquisition programs from the United States Department of Defense during the 1982-2018 period. I found that cost overruns, schedule overruns, and program scope changes increased the likelihood of program cancellations. Additionally, I found that the capability to manage Mutually Reinforcing Portfolios attenuates the relationship between cost overruns and schedule overruns, but not between program scope changes and program cancellation. However, I found that a firm’s Corporate Political Capability did not attenuate the relationship between cost overruns, schedule overruns, program scope changes, and program cancellation. The paper thus contributes to theory by conceptualizing and operationalizing the novel firm capabilities of managing Mutually Reinforcing Portfolios and Corporate Political Capabilities and providing a deeper understanding of the strategies firms use to impact program cancellation.