Week 4 - Resources, Capabilities and the Resource-Based View Flashcards
What is De Wit’s (2020) Markets and Resources Paradox?
About considering how CA can be generated from an outside-in perspective and inside out perspective
What perspective do Rs and Cs relate to?
An inside-out perspective. Resources over markets. Internal, strength driven Consider resource base and value chain Adaptation OF THE environment Attaining districtive Rs Strategy often = building resource base Comp. edge when have superior resources/imitation barriers
What is the RBV?
Theoretical framwork
Used to understand how CA is achieved and sustained within a firm
Inside out perspective, so oppsite of Porter’s positioning school
How does Kraaijenbrink et al (2010) view this model?
Supports it
“One of most influentual and cited theories in the history of management theorizing”
Complements Porter’s model - “Complement rather than compete with positioning school”
As RBV doesn’t look at everything, best used in conjunction with positioning school to gather whole picture
Who are the Key Authors of the RBV?
Birgir Wernerfelt
Jay Barney
What is Grant’s view on the RBV.
Believes it is a reductionist concept as simplifies down to Rs and Cs
“A conceptualization of the firm as a collection of Rs and Cs that form the basis of a CA”
What are resources?
inputs into the production of Gs/Ss
e.g. physical/human capital and financial resources
Can be tangible/intangible
What are capabilities?
What firm can do.
Cs make Rs productive
Develop over time as Cs interact
What is the process of addressing Rs and Cs and then exploiting them?
1) Classifies capabilities - functional value chain
2) Appraise the Rs and Cs - based on strategic importance and strength
3) Develop strategic implications - by exploiting key strengths and managing weaknesses
How is Coca Cola an example of using resources to create capabilities?
Tangible Rs - secret receipe and dist. networks
Intangible Rs - great sales staff and globally recognised brand
Capability = globally known drink that is widely available to customers worldwide
How should the RBV be used with caution?
It argues that strategy derives from unique colelctions of Rs and Cs
RBV is not a guide for strategy making, only a way of understanding how and why firms develop in unique manners
Who developed the VRIO framework?
Barney
Best used in conjunction with other frameworks as has caveats
Helps consider what competitive implications a resource/capability offers to the firm
What are Kraaijenbrink et al’s (2010) most problematic critiques of the RBV?
1) Neither necessary nor sufficient for SCA - does not suffciently consider syngery within resource bundles as a SCA. Does not suf. consider judgement/individuals role in value assessment and creation.
2) Value of resources is indeterminate to prove useful for the theory - a more creative/subjective notion of value needed.
3) Definition of resource is unworkable - too inclusive a term as can inc anything if analysed right. V.problematic for a theory around resources.
How have IBM used dynamic capabilities?
Moved from hardware to softeware & other services in last 2 decades.
Pace of evolution/change accelerated under last 3 CEOs
They manage DCs by:
Monthly meetings of the tech team and strat team
300+ members in the integration and values team to promote iniaiatives across divisional boundaries
Deep dives by adhoc team to explore opportunities
