Resource Based view (RBV) and 13 Criticisms
- 1. 3 SCHOOLS OF THOUGHTS AND 13 CRITISISMS: A REVIEW OF LITERATURE HASSAN SHAHZAD IHRM | MS-EM FURC
- 2. WHY DO SOME FIRMS OUTPERFORMS OTHER ?
- 3. WHY DO SOME FIRMS OUTPERFORMS OTHER ? 2- Paradigms External Factor Paradigm Internal factor Paradigm
- 4. WHAT SOURCES ARE LIKELY TO BE SOURCE OF SUCCESS?
- 5. 3 SCHOOLS OF THOUGHTS Rational- equilibrium school RESSOURCE BASED VIEW OF FIRMS (RBV) Behavioral- evolutionary school COMPETENCE BASED VIEW OF FIRM (CBV) Social construction ist school DYNAMIC CAPABILITIES BASED VIEW OF FIRM (DC)
- 6. 3 SCHOOLS OF THOUGHTS: 1. RESOURCE BASED VIEW (RBV) •Firm ‘A’ is more successful than firm ‘B’, if Firm ‘A’ controls more efficient and effective resources than firm ‘B’
- 7. 3 SCHOOLS OF THOUGHTS: 2. COMPETENCE BASED VIEW OF FIRM (CBV) •Firm ‘A’ is more successful than firm ‘B’, if Firm ‘A’ is in a position to make use of available resources more efficiently and effectively than firm ‘B’
- 8. 3 SCHOOLS OF THOUGHTS: 3. DYNAMIC CAPABILITIES BASED VIEW OF FIRM (DC) •Firm ‘A’ is more successful than firm ‘B’, if, Firm ‘A’ has the ability to renovate competencies to achieve new forms of competitive advantages i.e., to accomplish new and innovative forms of competitive advantages.
- 9. THE RESOURCE BASED VIEW (RBV)
- 10. MOST WIDELY USED RBV -MODEL
- 11. VRIO - FRAMEWORK
- 12. ASSUMPTIONS IN VRIO MODEL 1. RESOURCES ARE HETEROGENEOUS 2. RESOURCES ARE IMMOBILE
- 14. 13 CRITICISMS This framework does not explains the features necessary to identify a resource to be called as valuable 1. The value (V) conundrum
- 15. 13 CRITICISMS If all firm’s resources are heterogeneous then at some level of analysis all resources become unique or Rare 2. The uniqueness or rare (R) dilemma
- 16. 13 CRITICISMS contradictS the core proposition of the RBV that managers can engage in “resource-based strategizing” to create sustained competitive advantage 3. The cognitive impossibility dilemma (I)
- 17. 13 CRITICISMS all the firms can apply competencies and capabilities to produce the same output 4. The Organization(O) dilemma
- 18. 13 CRITICISMS Researchers attempting to empirically test the core proposition of the RBV should identify, ex ante the resources that will have strategic value ex post 5. The Tautology problem
- 19. 13 CRITICISMS The ex post analysis provide limited insight into the circumstances that will prevail in the future 6. The static problem
- 20. 13 CRITICISMS How the resources of a firm, various processes and complementary resources helps in contributing to the overall success and competitive advantage of that firm is unexplained 7. The absence of a chain of causality
- 21. 13 CRITICISMS Assumes that every embedded resource can only create strategic value in that specific firm, while it is in fact very possible that a given resource can create even more strategic value when becoming embedded in another firm 8. Asymmetry in assumptions regarding SFMs
- 22. 13 CRITICISMS Unable to explicitly explain the complex processes, the practicing of which, the firm will be able to accumulate and maintain the valuable resources 9. Accumulation of strategic resources
- 23. 13 CRITICISMS Instead of being a bundle of resources, resources are treated as singular distinct items 10. Synergetic effect of a bundle of resources
- 24. 13 CRITICISMS VRIO framework provides no such prescriptions for practitioners who want to implement this theory inside any firm 11. Un-implementable in practice
- 25. 13 CRITICISMS core proposition of the VRIO framework does not allow for reproducibility of experiments, falsifiability, and generalizability 12. The epistemological impossibility problem
- 26. 13 CRITICISMS it is critical to establish boundaries for the framework by hypothesizing competitive contexts within which particular capabilities or competences are determined to be more or less valuable. 13. One framework for different competitive contexts
- 27. RESOURCE BASED COMPETITION CONCLUSION RESOURCES, INTRINSICALLY CANNOT BE A SOURCE OF COMPETITIVE ADVANTAGE RESOURCE PERFORMANCE MANAGEMENT PROCESSES NEED TO BE DESIGNED THESE PROCESSES MUST BE CONTINUOUS AND ALIGNED WITH STRATEGIC GOALTHE MANAGERS MUST DESIGN CHALLENGING PROGRAMS OF INNOVATIVE AND DYNAMIC CAPABILITIES RESEARCHERS MUST SITUATE THEIR RESEARCH CAREFULLY IN DIFFERENT SCHOOLS OF THOUGHT
- 29. END OF PRESENTATION THANK YOU