Resource Based View

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The purpose of this abstract is to summarize and evaluate the paper „Is the resource-based “view” a useful perspective for strategic management research “ written by RICHARD L. PRIEM and JOHN E. BUTLER. I.Summarization

The authors try to clarify the fundamental theoretical statements of the resource based view (RBV) and specify its fundamental contributions to knowledge. PRIEM and BUTLER try to answer two basic questions:

1. Is the foundational and unembellished RBV actually a theory? 2. Is the RBV likely to be useful for building understanding in strategic management?

In order to approach these questions the authors firstly evaluate the diffusion of the RBV throughout strategy literature. In the following step they examine the basic RBV framework developed by BARNEY in order to check if it satisfies key requirements of a theoretical system. Next they examine RBV- driven research and finally develop suggestions from this analysis for future RB strategy research.

1. Is the foundational and unembellished RBV actually a theory? Earlier strategy- related research has put its emphasis on SWOT-analysis and later, after the publication of Porter´s “Competitive Strategy”, on external, industry- based competitive issues. It has been WERNERFELT´s article “A Resource- Based View of the Firm”(1984) that increased the awareness of the importance of resources for a firm´s competitive position. Among others RUMELT (1984), BARNEY(1986,1991), DIERICKX and COOL (1989) have contributed to the subsequent development of the RBV, making conceptual work to characterize firm resources that can be conducive to competitive advantage. Some theorists have emphasized on how resources contribute to diversification, while others examined how or why resources contribute to the advantage of one firm over another in a particular market. This “business-level” question of how to compete is elemental and determining both the RBV´s theoretical basis and its potential contributions to strategic management. Thus PRIEM and BUTLER choose BARNEY`s fundamental definitions of a single-business RBV for their investigations because they offer the most detailed formal depiction of the resource- based perspective. Additionally to this the majority of RBV studies base upon BARNEY`s organizational frame. The underlying axioms of BARNEY`s RBV are that resources are distributed heterogeneous over firms and that these resources are immobile. Based on that, the RBV has two fundamental assumptions: (1) Resources that are valuable and rare produce competitive advantage. (2) If at the same time these resources are not substitutable, not imitable and not transferable they can create sustainable competitive advantage.

The authors observe the “lawlike” generalizations in the RBV to figure out whether the RBV is a theory or not. To be considered a scientific theory, a system of statements has to contain some lawlike statements, meeting the following criterions: (1) To contain generalized conditionals, which can be recognized by their “if/then” form. Adding if and then to the above named fundamental arguments, they meet this criterion. (If a resource…,then it…, if it is additionally…,then it will…) (2) To have empirical content. This criterion helps to distinguish between analytical and synthetic statements. Analytical statements are true because of their either/or form or the way terms are defined, while from synthetic statements we can only know if they are true after investigation. The authors exchange the concepts in BARNEY`s original statements with the definitions of these concepts and come to the conclusion that these revised statements are analytical statements, true by definition. Thus the elemental statement of the RBV is not a “lawlike” generalization and due to this not empirically testable. To meet this standard of being synthetic conceptual work is necessary. The underlying problem about the main statement “rare and valuable resources...
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