Chapter

Reinterpreting the Resource‐Capability View of the Firm: A Case of the Development‐Production Systems of the Japanese Auto‐Makers <sup>1</sup>

Takahiro Fujimoto

in The Dynamic Firm

Published in print September 1999 | ISBN: 9780198296041
Published online November 2003 | e-ISBN: 9780191596070 | DOI: http://dx.doi.org/10.1093/0198296045.003.0002
 Reinterpreting the Resource‐Capability View of the Firm: A Case of the Development‐Production Systems of the Japanese Auto‐Makers  1

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An analysis is made of a firm's evolutionary capabilities using the car industry in general, and Toyota in particular, as an example. The resource view of the firm is extended to look in detail at how capabilities change over time, and attempt to explain inter‐regional and inter‐firm differences. However, instead of applying the concepts of resource‐based theories or capability theories on the firm as a unit, the analysis is applied at the operational level. In the process, the author makes an argument for not only interpreting capabilities as something directly affecting the level of competitive performance and the improvements of performance but also as the accumulation of these static and improvement capabilities; in other words, successful firms are not only competitive and know how to improve to stay competitive, they also know how to sustain these skills over time. The chapter goes on to explore, in some depth, this novel interpretation of evolutionary capability as a firm‐specific ability to acquire both static and improvement capabilities, and includes a table summarizing the evolution of selected production–development capabilities at Toyota, to accompany the discussion in the text.

Keywords: capability theories; car industry; companies; competitive performance; development systems; evolutionary capability; firms; improvement capability; Japan; production systems; resource‐based theories; static capability; Toyota

Chapter.  11208 words.  Illustrated.

Subjects: Microeconomics

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