Strategic assets and organizational rent

Abstract

We build on an emerging strategy literature that views the firm as a bundle of resources and capabilities, and examine conditions that contribute to the realization of sustainable economic rents. Because of (1) resource-market imperfections and (2) discretionary managerial decisions about resource development and deployment, we expect firms to differ (in and out of equilibrium) in the resources and capabilities they control. This asymmetry in turn can be a source of sustainable economic rent. The paper focuses on the linkages between the industry analysis framework, the resource-based view of the firm, behavioral decision biases and organizational implementation ksues. It connects the concept of Strategic Industry Factors at the market level with the notion of Strategic Assets at the firm level.Organizational rent is shown to stem from imperfect and discretionary decisions to develop and deploy selected resources and capabilities, made by boundedly rational managers facing high uncertainty, complexity, and intrafirm conflict.

Modern Resource-Based Theory(ies)

“…A number of contributions highlight individual cognition in structuring the search for new resource combinations (e.g. Amit & Schoemaker, 1993;Foss, 1993;Gavetti & Levinthal, 2000, Gavetti, Levinthal & Rivkin, 2005Knudsen & Levinthal, 2007), but these ideas do not seem to be well integrated into the core of the RBV. In addition, the decision-making process about resource allocation and capability development is structured by the organization design (Adner & Levinthal, 2004;Gavetti, 2005;Foss, Foss & Klein, 2007;Christensen & Knudsen, 2010).…”

Internal Corporate Social Responsibility and Performance: A Study of Publicly Traded Companies

“…Intangible assets, such as competences and capabilities, seem to be especially relevant to the development of competitive advantage (Barney, 2001). Amit and Schoemaker (1993) further emphasize that capabilities are grounded on processes that mainly consist of activities developed, carried and exchanged by the firm's human capital, that is, by the company's employees at all hierarchical levels.…”

A Strong Brand as a Determi- nant of Purchase the Case of Sectors, where Advertising in Mass Media Is Banned – on the Example of the Polish Spirits Sector

“…The assets theory states that assets and abilities that are rare, lasting, imperfectly mobile and difficult to imitate enable the company to gain a sustainable competitive advantage [2,97]. Companies usually build their strategies basing simultaneously on various attributes, one of them is almost always a brand because branded products are chosen more frequently than unbranded ones [20,220].…”