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MockAssessment1B_CritiquesofRBV1.pptxThe resource-based view: A review and assessment of its critiques
Kraaijenbrink, Spender & Groen (2010)
Mock individual presentation: Assessment 1B
By Jonathan Baker
Research background
After 20 years, the RBV is renowned for being easy to grasp, and easy to teach
RBV does not replace I/O, but complements it
RBV has been heavily criticized and is explicitly reductionist:
RBV does not see firms as “organisms with complex feedback-controlled mechanisms” (Kraaijenbrink et al., 2010, p.351)
Kraaijenbrink et al. (2010) review the eight main categories of criticisms of RBV
Findings
| Criticism | Description | Conclusion |
| The RBV has no managerial implications | How does a manager obtain VRIN resources or develop an appropriate organization? | RBV aspires to explain SCA, but does not claim to provide managerial prescriptions |
| The RBV implies infinite regress | RBV indicates firms could end up in an infinite search for higher-order capabilities | There is no ultimate source of SCA, hence practically speaking strategic management is inherently open-ended and indeterminate |
| The RBV’s applicability is too limited | One cannot generalize about uniqueness RBV implicitly only applies to large firms striving for SCA Only VRIN firms are in a position to acquire VRIN resources | If RBV’s scope includes individual resources and capabilities of entrepreneurs that constituted the firm it applies even to newly founded firms Industry needs to be stable for RBV to remain true (Barney 2002) |
| SCA is not achievable | SCA is reliant on constant innovation and learning | By including dynamic capabilities, the RBV is not purely static (but only explains ex post, not ex ante, sources of SCA); Although no CA can last forever, a focus on SCA remains useful to managers |
| The RBV is not a theory of the firm | “explanation of why firms exist, why their boundaries and internal organization are as they are, and why they are better at rent creation than markets, specific references to incentives, asset ownership, and opportunism are required” (p.355) | RBV should further develop as a theory of SCA |
| VRIN/O is neither necessary nor sufficient for SCA | VRIN/O has focused primarily on individual resources; ignores many potential sources of CA, e.g., synergistic combinations; individuals’ skills; multiple bundles of resources can be valuable to every firm (e.g., HR processes) | VRIN/O criteria are not always necessary/ sufficient to explain a firm’s SCA. RBV does not sufficiently consider the synergy within resource bundles as a source of SCA. RBV does not sufficiently recognize role of individual judgment and mental models |
| The value of a resource is too indeterminate to provide for useful theory | RBV stands on analytic statements that are tautological, true by definition, and not able to be tested, e.g., “Resources are valuable when they enable a firm to conceive of or implement strategies that improve its efficiency or effectiveness” (Barney, 1991, 105). | The current conceptualization of value turns the RBV into a trivial heuristic / incomplete theory / tautology; A more subjective and creative notion of value is needed. |
| The definition of resource is unworkable | Barney defines resource as all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. (Barney, 1991, p.101) | Definitions of resources are all inclusive; RBV does not recognize differences between resources as inputs and resources that enable the organization of such inputs; No recognition of how different types of resources may contribute to SCA in a different manner |
Contributions
RBV’s status as a core theory is called into question by three of the five major types of criticisms, which:
“concern the indeterminate nature of two concepts fundamental to the RBV—resource and value—plus there are problems with the RBV’s narrow explanation of a firm’s competitive advantage”.
“…The common theme underlying these critiques is that the RBV has clung to an inappropriately narrow neoclassical economic rationality and has thereby diminished its opportunities for making further progress”
(Kraaijenbrink et al., 2010, p.350)
Implications
Further theorizing by scholars is required if RBV is to maintain its reputation, e.g.:
What are resources; what are the different types of resources?
How should capacities be built or acquired; what are the managerial processes involved in deploying those capacities?
What is the role of ownership of resources (e.g., especially knowledge and skills)?
What is the role of collaboration and cooperation versus competitiveness for resources?
What is the role of managerial capabilities to integrate resources?
What is the role of subjective assessments of value (from managers, customers, entrepreneurs)?
What is the role of situational context of the firm?
How should new resources be matched and integrated (e.g., M&As)?
References
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120
Barney, J. B. (2002). Gaining and sustaining competitive advantage. Upper Saddle River, NJ: Prentice Hall.
Kraaijenbrink, J., Spender, J.-C., & Groen, A. J. (2010). The resource-based view: A review and assessment of its critiques. Journal of Management, 36(1), 349-372.
