Resource-Based View

Abstract

The central argument in the resource-based view (RBV) is that despite a firm having well-defined goals to accomplish, how the mission will be fulfilled is often limited by resource availability (Rangan 2004). The RBV focuses on the utilization and deployment of resources, leading to the development of resource-driven competencies and eventual competitive advantage (Prior and Glaser 2003). Resources in a firm can be either internal or external to the firm and may be acquired or already owned by the firm (Arbab Kash et al. 2014). The process through which a firm coordinates and deploys these resources will eventually affect its competitive advantage. The RBV can be defined as:. . .the identification and coordination of key resources, whether internal or external to the firm, tangible or intangible, and its eventual deployment to achieve firm objectives and organisational goals, in a bid to outperform competitors. Wernerfelt's (1984) work titled "A Resource-Based View of the Firm" is considered one of the most influential papers that influenced RBV and indeed the wider body of strategy research as it explains the critical linkages between resources and output/products (Wernerfelt 1984, 1995). The author is a key seminal author in the RBV as it directs strategy scholars back toward resources as being critical to output/products and, ultimately, firm performance (Priem and Butler 2001).