Resource Based View
Master: Business Administration
Specialization: Human Resource Management
Resource Based View: A short review of its main strengths and weaknesses
Short introduction, definition and characteristics
The Resource Based View (RBV) is a useful business management tool that, in recent years, has been attracting the attention of a growing number of researchers. The popularity of this influential contemporary theory comes primarily from the fact that it combines both strategic and organizational insights. Its aspiration is to try to explain the internal resources of a firm that can lead to the acquisition of sustained competitive advantage. Its fundamental concept is that, if an organization wants to achieve sustained competitive advantage, it should possess resources that are valuable, rare, inimitable and non-substitutable (VRIN). Some key terms should also be defined in order to avoid possible confusion.
Internal Resources: assets, capabilities, processes, information, knowledge, etc. which are obtained and controlled by firms. They are considered as the strengths of a company and can be categorized in physical capital resources, human capital resources and organizational capital resources. They promote the effectiveness and efficiency of a firm.
Competitive advantage and sustained competitive advantage: A company is considered to have competitive advantage when its value creating strategy is not implemented by current or potential competitors at the same time. The difference of the sustained competitive advantage is that the competitors cannot duplicate this strategy.
Next, a review of some strong and weak key points of the RBV is provided, as presented in the organizational literature.
Strengths
An important contribution of the RBV to strategic management is that it has given insight into the nature of competitive advantage and it has broadened our comprehension of sustained competitive advantage. The logic behind it is a simple one to comprehend. The
Specialization: Human Resource Management
Resource Based View: A short review of its main strengths and weaknesses
Short introduction, definition and characteristics
The Resource Based View (RBV) is a useful business management tool that, in recent years, has been attracting the attention of a growing number of researchers. The popularity of this influential contemporary theory comes primarily from the fact that it combines both strategic and organizational insights. Its aspiration is to try to explain the internal resources of a firm that can lead to the acquisition of sustained competitive advantage. Its fundamental concept is that, if an organization wants to achieve sustained competitive advantage, it should possess resources that are valuable, rare, inimitable and non-substitutable (VRIN). Some key terms should also be defined in order to avoid possible confusion.
Internal Resources: assets, capabilities, processes, information, knowledge, etc. which are obtained and controlled by firms. They are considered as the strengths of a company and can be categorized in physical capital resources, human capital resources and organizational capital resources. They promote the effectiveness and efficiency of a firm.
Competitive advantage and sustained competitive advantage: A company is considered to have competitive advantage when its value creating strategy is not implemented by current or potential competitors at the same time. The difference of the sustained competitive advantage is that the competitors cannot duplicate this strategy.
Next, a review of some strong and weak key points of the RBV is provided, as presented in the organizational literature.
Strengths
An important contribution of the RBV to strategic management is that it has given insight into the nature of competitive advantage and it has broadened our comprehension of sustained competitive advantage. The logic behind it is a simple one to comprehend. The
Bibliography: Kraaijenbrink J., Spender, J.-C. and Groen, A., (2010) The Resource-Based View: A Review and Assessment of Its Critiques, Journal of Management 36(349), DOI: 10.1177/0149206309350775 Truijens, O., A Critical Review of the Resource-based View of the Firm, Permanent URL: http://sprouts.aisnet.org/3-6 Fahy, J. and Smithee, A., (1999) Strategic Marketing and the Resource Based View of the Firm, Academy of Marketing Science Review 1999(10) Barney, J.B. (1991), Firm resources and sustained competitive advantage. Journal of Management, 17: 99-120. Priem, R.L. and Butler, J.E. (2001). Is the resource-based ‘view’ a useful perspective for strategic management? Academy of Management Review, 26: 22-40. Sirmon, D.G., Hitt, M.A. and Ireland, D. R. (2007). Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review, 32: 273-292