The
Resource Based View of the firm
Da Cruz Rocha, Alex Daniel
On the last few decades, traditional strategic tools have
been increasingly discredited as a framework for creating and sustaining
competitive advantage. In response, new theories of the firm have been
developed, emerging Resource-Based View (RBV) of the firm as one of the most
influential paradigms in which the sources of competitive advantage are
examined by focusing on internal analysis of organisational strengths and
weaknesses. Barney (1991) suggests that strategic resources, which are
valuable, rare, imperfectly imitable and non-substitutable, characterize a
firm’s competitive advantage. Furthermore, firm resources are its assets and
strengths such as information or organisational processes that are controlled
by a firm, enabling it to plan and implement strategies that improve its
organisational efficiency (Barney 1991).
The central focus of the RBV theory lies on the resources
and capabilities controlled by a firm that underlie persistent differences
among firms (Peteraf & Barney 2003). Barney (1991) points out that there
are systematic differences across firms within an industry in relation to the
resources they control, and that the resources are relatively stable across
firms, assuming that resources are heterogeneous and immobile. Accordingly, resource-based
view is a strategic management tool that examines how firms use valuable, rare,
imperfectly imitable and non-substitutable resources and capabilities to
achieve sustainable competitive advantage, arguing that the heterogeneity of
resources and capabilities, combined with their degree of immobility, can have
positive effects on performance superiority over competitors. In fact,
resources whether tangible or intangible, regarding a firm’s competitiveness,
are strengths that enable firms to form a unique strategic position. RBV
studies have acknowledged the particular value of intangible resources, since
they are the only kind of resources potentially capable of meeting the
resources based criteria of being valuable, rare and costly to imitate (Michalisin,
Kline & Smith 2000).
In the networked new economy where knowledge means
production (Drucker 1993), managers are facing challenges that are more
complicated than before and firms are confronted with not only ‘hyper-competition’
from strong competitors (D’Aveni 1994), but also rising financial and social
issues connected to stakeholders. Halal (2001) mentions stakeholders as
partners who cooperate with the firm and encourage knowledge sharing to generate
both economic and social values.
In this view, stakeholder interactions offer both
challenges and opportunities to an organisation, as multiple stakeholders
demand more meaningful participation, while having the potential to contribute
to creative solutions to complex issues (Svendsen & Laberge 2005).
Following this line of thought, if stakeholders can influence organisations
with their cooperation as well as their threats, the managing stakeholders
strategy plays an important role in the process of value creation by maximizing
their cooperative potential and minimizing their potential threat.
According to Harrison, Bosse and Phillips (2010) firms,
which share value with their stakeholders and involve them in their strategic
decisions, could gain benefits, which would further become sources of
competitive advantage. Regarding to engaging stakeholders relationships, stakeholder
management is vital to mobilise both physical and human resources through
social relationships. Besides, the proactive approach that advocates the use of
the term stakeholder engagement, instead of stakeholder management, has been
increasingly emphasized to highlight the importance of partnership between the
firms and its multiple stakeholders (Lozano 2005).
Considering that organisations can receive benefits from
cooperation with multiple stakeholders, including communities and civil society,
stakeholder engagement, supports firms in acquiring or generating valued
resources and capabilities. In addition to influence resources, stakeholders
can also impact on firm’s cost advantage as well as on its differentiation,
consequently affecting its positional advantages.
In accordance with the stakeholder perspective, the
manager’s task is to develop and implement a strategy that integrates various
relationships and balances different interests in a multi-stakeholders context
(Hitt, Freeman & Harrison 2001).
Finally, from the point of view of RBV theory,
stakeholders are catalysts or hindrances that may facilitate or impede
generation of valued resources, so that they can be categorised by their
potential of contribution or threats. RBV explains the source of competitive
advantage through the lens of internal attributes of the firm, but it only
tells a part of the story, as competitive advantage comes from a mix of various
sources, internal and external.
References
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August 2012.
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