Cardial Antonio

Topics: Resource, Case study, Resource-based view Pages: 39 (8252 words) Published: April 18, 2013
African Journal of Business Management Vol. 6(37), pp. 10159-10170, 19 September, 2012 Available online at
DOI: 10.5897/AJBM12.295
ISSN 1993-8233 ©2012 Academic Journals

Full Length Research Paper

Valuable, rare, inimitable resources and organization
(VRIO) resources or valuable, rare, inimitable resources
(VRI) capabilities: What leads to competitive
Nuno Cardeal1* and Nelson António2

Católica-Lisbon School of Business Economics, Universidade Católica Portuguesa, Palma de Cima, Lisbon, Portugal. 2
ISCTE-IUL Lisbon, Av. Forças Armadas, Lisbon, Portugal.
Accepted 13 July, 2012

The resource-based view (RBV) argues that valuable, rare, inimitable resources and organization (VRIO) lead to competitive advantage. Dynamic capabilities (DC) are a comparatively new field and the related literature is mainly conceptual. Capabilities can be considered as the firm’s routines and processes. We argue that the “O” in VRIO refers to DC. DCs are the “organization” needed to transform bundles of resources into competitive advantage. Consequently, does competitive advantage stem from VRIO resources or from VRI capabilities? Through a case study we analyzed the development of one capability in a medium-sized Portuguese footwear manufacturer. After reviewing the process of development of the capability, we performed a VRIO test for each of the resources it exploits and a VRI test of the capability. We can conclude that none of the resources contributing to the capability are VRIO, but the capability is VRI.

Key words: Competitive advantage, dynamic capabilities, footwear, resource-based view.

The resource based view (RBV) focuses on specific
resources and highlights that competitive advantage is
based on valuable, rare, inimitable resources and
organization (VRIO) (Barney, 1997). Dynamic capabilities
(DC), which represent the firm’s behavioral orientation
towards constant integration, reconfiguration, renewal
and recreation of its resources and capabilities and
continuous upgrading and reconstruction of its core
capabilities in response to the changing environment and
to remain competitive (Wang and Ahmed, 2007), focus
on internal processes or routines.
The RBV does not explain how competitive advantage
is achieved (Priem and Butler, 2001a). The DC view
explores how the firms’ resources and capabilities evolve
over time and provides a better understanding of how

*Corresponding author E-mail: Tel: +351 217
214 000.

competitive advantage is achieved and maintained
(Ambrosini and Bowman, 2009). The DC literature is
quite new, which is probably the reason why it is mostly
conceptual and provides little empirical evidence, on how
to overcome the shortcomings of the RBV (Priem and
Butler, 2001a).
W e provide an extensive review of the state of the art
of the RBV and DC literatures. We conclude that from the
RBV viewpoint, to have a competitive advantage, firms
need to have VRIO resources. The unit of analysis is the
resource. On the other side, from the DC viewpoint,
capabilities in the origin of the competitive advantage
need to be VRI (being “O” the capability itself). The unit of analysis is the “O”. Then we argue that DC can be seen
as the “O” in VRIO according to the RBV. Being DCs the
VRIO’s “O”, to achieve competitive advantage, firms need to have VRI (valuable, rare and inimitable) capabilities. If we compare the RBV and the DC literature, a tension
emerges about whether competitive advantage stems
from VRIO resources or from VRI capabilities.


Afr. J. Bus. Manage.

W e use a case-study methodology to analyze the
development of one capability by a medium sized
Portuguese footwear manufacturer. W e deeply analyzed
the way the firm renewed, recreated, upgraded and
reconstructed its resources / capabilities in respon se to
the changing environment. After reviewing the process of...

References: Adner R, Helfat CE (2003). Corporate effects and dynamic managerial
Ambrosini V, Bowman C (2009). What are dynamic capabilities and are
they a useful construct in strategic managem ent? Int
Ambrosini V, Bowman C, Collier N (2009). Dynamic capabilities: an
exploration of how firms renew their resource base
Amit R, Schoemaker PJH (1993). Strategic assets and organizationa l
Arend RJ, Bromiley P (2009). Assessing the dynamic capabilities view:
spare change, everyone? Strateg Organ
Barney JB (1991). Firm resources and sustained competitive
Barney JB (1995). Looking inside for competitive advantage. Acad.
Barney JB (1997). Gaining and Sustaining Competitive Advantage.
Barney JB (2001). Is the resource-based "view" a useful perspective for
strategic management research? Yes
Barney JB, Wright P(1998). On becoming a strategic partner: The role
of human resources in gaining competitive advantage
Barney JB, Zajac EJ (1994). Competitive organizational behavior:
Toward an organizationally-based theory of competitive advantage.
Barreto I (2010). Dynamic capabilities: A review of past Research and
an agenda for the future
Bowman C, Ambrosini V (2007). Identifying valuable resources. Eur
Cavusgil E, Serggie SH, Talay MB (2007). Dynamic capabilities view:
Foundations and research agenda
Chell E (2004). Critical Incident Technique. In Essential Guide to
Qualitative Methods in Organizational Research
Collis DJ (1994). Research Note: How Valuable are Organizational
Capabilities? Strat
Collis DJ, Montgomery CA (1995). Competing on resources: strategy in
the 1990s
Collis DJ, Montgomery CA (2008). Competing on resources. Harvard
Danneels E (2002). The dynamics of product innovation and firm
Di Stefano G, Peteraf MA, Verona G (2010). Dynamic capabilities
deconstructed: a bibliographic investigation into the origins,
Dierickx I, Cool K (1989). Asset stock accumulation and sustainability of
Døving E, Gooderham PN (2008). Dynamic capabilities as antecedents
of the scope of related diversification: the case of small firm
Easterby-Smith M, Lyles MA, Peteraf MA (2009). Dynamic capabilities:
current debates and future directions
Eisenhardt KM (1989). Building theory from case study research.
Eisenhardt KM, Graebner ME (2007). Theory building from cases:
opportunities and challenges
Eisenhardt KM, Martin JA (2000). Dynamic capabilities: What are they?
Felin T, Nicolai JF (2009). Organizational routines and capabilities:
Historical drift and a course-correction toward microfoundations.
Fiol CM (1991). Managing culture as a competitive resource: An
identity-based view of sustainable competitive advantage
Glaser B, Strauss AL (1967). The Discovery of Grounded Theory:
Strategies for Qualitative Research
Hartley J (2004). Case Study Research. In Essential Guide to
Qualitative Methods in Organizational Research
Helfat C, Finkelstein S, Mitchell W, Peteraf M (2007). Dynamic
Capabilities: Understanding Strategic Change in Organizations.
Katkalo VS, Pitelis CN, Teece DJ (2010). Introduction: on the nature
and scope of dynamic capabilities
Kay N (2010). Dynamic capabilities as context: the role of decision,
system and structure
Kraaijenbrink J, Spencer JC, Groen AJ (2010). The Resource-Based
View: A review and assessment of its critiques
Laamanen T, Wallin J (2009). Cognitive dynamics of capability
development paths
Lado AA, Wilson MC (1994). Human resource systems and sustained
competitive advantage: A competency-based perspective
Lee TW (1999). Using Qualitative Methods to Organize Res. SAGE:
Newbury Park, CA.
Lee TW, Mitchell TR, Sablynski CJ (1999). Qualitative research and
vocational psycol
Liao J, Kickul JR, Ma H (2009). Organizational dynamic capability and
innovation: an empirical examination of internet firms
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • How does Shakespeare compare and contrast the characters of Antonio and Shylock in the trial scene? Essay
  • Merchant of Venice
  • Essay about Antonio-Merchant of Venice
  • Shakespeare Analysis: Antonio and Shyloc Essay
  • Antonio Vivaldi Essay
  • Antonio Salieri Biography Essay
  • Antonio Vivaldi 8 Essay
  • Essay on Antonio Undertone

Become a StudyMode Member

Sign Up - It's Free