© Institute of International Relations and Area Studies, Ritsumeikan University
The Critical Assessment of the ResourceBased View of Strategic Management: The Source of Heterogeneity of the Firm
The objective of this paper is to incorporate the entrepreneurial view point into the framework of the resource-based view of strategic management. We firstly attempt to make a brief survey of the conceptual framework of the RBV, and formulize it in a static sense by contrasting it with the competitive forces approach. Secondly, we conduct a critical assessment of the RBV from a dynamic point of view. The concept of entrepreneur’s ability is distilled by this assessment, and the objective of corporate strategy is clarified as well. Finally, we suggest a new perspective of the RBV by amending it from an entrepreneurial viewpoint.
resource-based view, entrepreneurship, disequilibrium, capability, strategic management
RITSUMEIKAN INTERNATIONAL AFFAIRS Vol.3, pp.125-150 (2005). * Associate Professor, Faculty of Business Administration, Ritsumeikan University
RITSUMEIKAN INTERNATIONAL AFFAIRS
“The pivot on which everything turns”. (J. A. Schumpeter) Although the resource-based view (RBV) has emerged as one of the substantial theories of strategic management, it is said that it has overlooked the role of entrepreneurial strategies and entrepreneurial abilities as one of the crucial sources of the competitive advantage of a firm. Even today, when entrepreneurship research is in demand, most economic research, and consequently much of strategic management research, views entrepreneurship as the “specter which haunts economic model”. (Baumol, 1997: 17) The main objective of this paper is to amend the RBV of strategic management from a dynamic point of view, in order to make up its insufficiency. Many scholars have attempted to investigate into the mechanism of sustainable competitive advantage of a firm through the RBV with original concepts such as ‘core competence’ (e.g., Hamel & Praharad, 1994), ‘dynamic capability’ (e.g., Teece, Pisano & Shuen, 1997) ‘VRIO framework’ (Barney, 2002), ‘capability lifecycle’ (Helfat & Peteraf, 2003), and ‘routine and skills’ (e.g., Nelson & Winter, 1982), however, little work in RBV has been made to grasp the role of entrepreneurship as the crucial source of competitive advantage, despite the abilities of the entrepreneur are undoubtedly the principal human resource possessed by a firm (see Alvarez & Barney, 2000 for an exception). This paper attempts to incorporate the theory of entrepreneurship into the RBV of strategic management, while critically dealing with the RBV from an entrepreneurial viewpoint. The paper is divided into three parts. First, a brief survey is given of the conceptual framework of the RBV. It is helpful for us to grasp the characteristics of its framework by contrasting it with the competitive forces approach (CFA) presented by Porter (1980) because it is said that the CFA explores the source of sustainable competitive advantage in the external environment of the firm (i.e., attractiveness of industry where they are located), while the RBV pays attention to the internal resources of the firm (i.e., the heterogeneous resources that a firm possesses). Second, we clarify the objectives of corporate strategy through a critical
The Critical Assessment of the Resource-Based View of Strategic Management TOKUDA
assessment of the RBV from both a static and a dynamic point of view. Barney’s fundamental concept of the RBV is examined. Third, we suggest a new perspective of the RBV by amending it from an entrepreneurial viewpoint.
. STRATEGY AND EXTERNAL ENVIRONMENT OF A FIRM
Traditional research on strategic management suggests that firms need to seek a strategic fit between the external environment, for example opportunities and threats, and internal resources, for example strengths...
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