Superior resources are a source of superior performance when organizations achieve alignment between those resources and the environment. However, managers in many firms contend with a “resource disadvantage” when initiating strategic actions. Integrating insights from the psychology literature on Naturalistic Decision Making, we examine risk-taking by strategic decision-makers in resource-disadvantaged organizations to explore the microfoundations of competing with inferior resources. Using a quasi-natural experiment and a longitudinal and population-level dataset drawn from MotoGP motorcycle racing, we demonstrate that when the competitive context changes in a way that affects ex ante associations between resources and performance, decision-makers in resource-disadvantaged organizations engage in greater risk-taking and undertake more risky strategic actions that result in both superior resource performance and an improved competitive position for their organizations.
