Resources, Firms, and Strategies: A Reader in the Resource-Based Perspective

Margaret A. Peteraf

In recent years, a model of how firms compete, which is unique to the field of strategic management, has begun to emerge. Known as the 'Resource-Based View', it is regarded by some as having momentous potential as a paradigm for our field. Others wonder whether this emergent model provides much additional insight over traditional understandings. Admittedly, resource-based work is consistent with and rooted squarely in the policy research tradition. The notion that firms are fundamentally heterogeneous, in terms of their resources and internal capabilities, has long been at the heart of the field of strategic management. The classic approach to strategy formulation, for example, begins with an appraisal of organizational competencies and resources ( Andrews, 1971). Those which are distinctive or superior relative to those of rivals, may become the basis for competitive advantage if they are matched appropriately to environmental opportunities ( Andrews, 1971; Thompson and Strickland, 1990).

Those ideas may be thought of as the basic principles upon which resource-based research continues to build. While the model is still in the developmental stage, it has deepened our understanding regarding such topics as how resources are applied and combined, what makes competitive advantage sustainable, the nature of rents, and the origins of heterogeneity. ¹ The work of Penrose ( 1959) is considered a very influential force. Other notable contributions include Lippman and Rumelt ( 1982), Teece ( 1980, 1982), Nelson and Winter ( 1982), Rumelt ( 1984, 1987), Wernerfelt ( 1984), Barney ( 1986, 1991), Dierickx and Cool ( 1989), Castanias and Helfat ( 1991), Connor ( 1991), and

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