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Organisation Theory (Subject) / Resource Based View (Lesson)
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- Basic idea Explain sustained competitive advantage Conceptualize firms as bundles of resources Focus on inter-firm resource heterogeneity
- Intellectual roots rooted within the field of strategic management Examine why organizations within the same industry can achieve sustained competitive advantage
- Research questions Why do some organizations outperform others? How can within-industry differences in performance be explained? What are the sources of sustained competitive advantage? What is the role of resources in driving sustained competitive advantage What determines the strategic value of firm resources? How can these resources be protected against obsolesence? How can these resources be protected against imitations by (potential) competitors?
- research approach Explanation of within-industry performance differences Study of within-industry heterogeneity in firms resource endowments Identification of determinants of sustained strategic value of resource combinations Adoption of static and dynamic perspectives
- key assumptions Bounded ratinality and cognitive limitations Scope of managerial agency in assessing, configuring and altering resource base Existence of persistent intra-industry differences in performance performance differences can be attributed to differences in resource endowments
- Market-Based-View External view (porter) Structure Inter-industry differences in performance selection of industry and position therein critical for competitive advantage focus on industry analysis and market segmentation corporate strategy primarily determined by industry membership Focus: Explain inter-firm performance differences by industry attributes
- Resource based view Internal view Resources Intra-industry differences in performance internal resources base critical for competitive advantage Focus on resource analysis and core competence Corporate strategy primarily determined by firm resource endowments Focus: Explain inter-firm performance differences by firm attributes
- Definition Competitive advantage Value creating strategy not simultaneaously implemented by any (potential) competitors coupled with the inability of these competing firms to duplicate this strategy (Barney)
- Definition of resources stocks of available factors that are owned or controlled by organization strengths the firm can use to conceive of and implement their strategies all assets, capabilities, organizational processes, firm attributes, information knowledge
- attributes of ressources Heterogeneity: resources might be unequally distributed even within the same industry Imperfect Mobility: Resources might be difficult to develop or purchase by organizations strategic relevance: persistent differences in resource endowments can be a source of sustained competitive advantage
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- Topology of firms resources Tangible Financial (borrowing capacity) and physical (raw material, land, plant) Intangible Technology (intellectual property, expertise) and reputation (brand, customer loyalty) Human resources training, experience, external network
- Resource orchestrations Little awarness of threat of resource obsolescence Focus in optimal orchestration of available resources in dynamic contexts rahter than on resource per se rapid coordination and rapid redeployment of resource in action Dynamic capabilites
- Concept of dynamic capabilities Sensing: Identifiying new opportunities and threats Seizing: Responding to new insights through product development, business model innovation etc. Reconfiguring: Changing internal and externa resource configuration
- Attributes of strategically relevant resources Valuable: resource enables the organization to improve its efficiency and effectiveness Rare: not simultaneously possessed by a large number of competitors Imperfectly-imitable: cannot be easily imitated or purchased by competitor Non-substituable: cannot be substituted by stretegically equivalent resource
- Different theoretical predictions Competitive disadvantage Competitive Parity Temporary competitive advantage sustained competitive advantage
- Resource reconfiguring types Incremental DC (stable environment): continously improve the resource base Renewing DC (dynamic environment): periodically refresh, adapt and aufment the resource base Regenerative DC (hyper environment): Infrequently alter the way in which the organization changes its resource base