Resource Based View Clause Samples

Resource Based View. The resource-based view also focuses on the relationship between firm resources and performance. A resource can be thought of as a strength or weakness of the firm (Wernerfelt, 1984) and different firms possess unique bundles of productive resources. The resource-based theory includes the resource-based view of the firm (Wernerfelt, 1984), dynamic capabilities (▇▇▇▇▇ et al., 1997) and knowledge-based approaches (▇▇▇▇▇, 1996). The theory of invisible assets (Itami, 1987) has been developed in parallel to the resource-based theory of competitive advantage and its proponent argues that information-based invisible assets, such as technology, customer trust, brand image, corporate culture and management skills, are the real sources of competitive advantage because they are hard and time-consuming to accumulate, can be used in multiple ways simultaneously, and are both inputs and outputs of business activities. Resource based view assumes that even operating in the same industry, firms are heterogeneous in terms of their resources and capabilities. In essence, the theory argues that organizations are often not self-sufficient for all the needed resources that can enable them remain competitive (Teece et al., 1997). Therefore they need to engage in exchanges with other organizations in one way or the other so as to gain necessary resources for survival. Resource based view has emerged as an important explanation for the persistent firm level performance by emphasizing firm’s ability to create and sustain competitive advantage by acquiring defending advantageous resources positions (Leiblein, 2003). The competitive advantage of a firm is the result of a strategy that utilizes its unique resources and skills. The application of resource dependence theory will deepen our understanding of what resources parent firms prefer to control and how they control them (Itami, 1987). ▇▇▇▇▇ (1998) agrees with (▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇, 2002; ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, 1978) and argues the uncertainty in the external control of these resources may reduce managerial prudence and thereby interfere with the achievement of organizational goals and ultimately threaten the existence of the focal organization. Confronted with the costly situation of this nature, management actively directs the organization to manage the external dependence to its advantage.