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

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

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

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

Synopsis

Strategic management has been increasingly characterized by an emphasis on core competences. Firms are advised to divest unrelated businesses and return to core business. Moreover, competitive advantage is now increasingly seen as a matter of efficiently deploying scarce knowledge resources to product markets. Much of this change in emphasis has occurred because of the emergence of a unified and rigorous approach to strategy, often called the resource-based approach. This Reader brings together extracts from the seminal articles that created this dominant perspective in strategic management. It includes the pioneering work of Selznick, Penrose, and Chandler and more recent writing by Wernerfelt, Barney, Teece, and Prahalad and Hamel.

Excerpt

Birger Wernerfelt

Today, it is very difficult to imagine teaching business strategy without more or less explicitly relying on some insights from the resource-based view of the firm; at least to the degree that one espouses the maxim that resources are a major determinant of strategy. However, this is a quite recent development.

Like other streams of research, the resource-based view is a puzzle under construction.)When the first pieces were put down, there was no clear relationship between them. in my original article, A Resource-Based View of the Firm', I assumed that resources were leveraged inside the firm and took as given that firms had heterogeneous resource endowments. Several years passed before we realized that David Teece and Richard Rumelt had supplied those pieces of the puzzle. Only then, in the late 1980s, did the resource-based view pick up steam. We now have substantial convergence and something which looks like a research stream. While the words differ, the last five papers in Part iii of this Reader are clearly all about the same theory. in particular, most researchers associated with the resource-based view by now agree at least with the general statement that (1) resources are fixed inputs and (2) sustainable competitive advantages are conferred by resources which are hard to imitate and scarce relative to their economic value.

As illustrated in Part iv, different groups of researchers are currently investigating the firm and market level effects of different classes of resources. the more prominent examples include knowledge assets ('competencies'?), resources for which change is largely stochastic ('the evolutionary perspective'), first-mover advantages ('commitments'), and second-order resources ('dynamic capabilities'?). As we explore these angles it is important that we maintain the links to the larger set of resources, such that we, as a group, can develop a more cumulative body of knowledge. By bringing several of these efforts together, this Reader has the potential to help in this integrative process.

As someone who has been away from the area for a while, I am impressed by the way different parts of the perspective are converging. My sense is, however, that many resources remain mystical. We have made progress dis-

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