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resource-based view


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A perspective that theorizes how firms can achieve sustained competitive advantage. It has become of interest to those studying human resource management because it suggests that human capital resources (training, experience, judgement, knowledge, relationships, etc.) can be one of the key resources that a firm might use to develop a value-creating strategy. For a resource to provide sustained competitive advantage, it must have the following four characteristics. (1) Value—the resource must have the capacity to exploit opportunities or neutralize threats in the firm's environment. (2) Rarity—the resource must be very rare or unique so that current or potential competitors cannot exploit the resource in the same way. (3) Imperfect imitability—it must not be possible to copy the resource. This lack of imitability is likely to come from the firm's unique historical conditions, its social complexity, and the causal ambiguity between the resources possessed by the firm and its sustained competitive advantage. (4) Non-substitutability—it must not be possible to replace the resource with a similar resource, or a different resource that has an equivalent effect. Only when a resource exhibits all four of these characteristics can it be said to be a source of sustained competitive advantage. One of the key commentators on the resource-based view is management theorist Jay Barney. [See inside-out.]

(1) Value—the resource must have the capacity to exploit opportunities or neutralize threats in the firm's environment. (2) Rarity—the resource must be very rare or unique so that current or potential competitors cannot exploit the resource in the same way. (3) Imperfect imitability—it must not be possible to copy the resource. This lack of imitability is likely to come from the firm's unique historical conditions, its social complexity, and the causal ambiguity between the resources possessed by the firm and its sustained competitive advantage. (4) Non-substitutability—it must not be possible to replace the resource with a similar resource, or a different resource that has an equivalent effect.

Subjects: Human Resource Management.


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