The Resource-Based View within the Conversation of Strategic ManagementPresented by Christina L. Frye

“The Resource-Based View within the Conversation of Strategic

Management”Joseph T. Mahoney & J. Rajendran Pandian

(1992). Strategic Management Journal, 13(5): 363-380.

Overview• At time of writing, RBV was an emerging

framework.• Central Thesis: The resource-based view

“stimulates conversation within mainstream strategy research” and “provides a framework for increased discussion between these research perspectives” (p. 364).

Overview Cont’d• Complement (not contradictory or a replacement) to

strategic management research perspectives:– RBV in the “Strategy Conversation: Firms are

heterogeneous and have distinct competencies and capabilities holds diversification and performance implications

– RBV in the Organizational Economics Conversation: Fits the paradigm 5th “branch” in the theoretical knowledge tree with agency, property rights, transactions cost economics, and evolutionary economics theories

– RBV in the Industrial Organization Conversation: Complements research on inimitability, imperfect substitutability, and sustainability

RBV in Strategy Conversation

• Firms select strategy to generate rents based on their resource capabilities (p. 364).– These unique capabilities are a function of

resources and create heterogeneity that may result in SCA.

– Resources influence diversification strategy by (1) placing limits on growth, (2) inducing motives for expansion, (3) directing how it diversifies, and (4) explaining how well it performs

RBV in Organizational Economics Conversation

• Theoretical paradigm is dissatisfied with neoclassical theory of the firm (likewise with RBV)– Neoclassical view disregards frictions in the market

• RBV is dynamic new combinations of resources are means to achieve SCA

• Successful deployment of resources is path dependent (evolutionary theory), depends on well-defined property rights, and is influenced by agency and transaction costs

RBV in Industrial Organization Conversation• Valuable resources are imperfectly

imitable and imperfectly substitutable enables firm to generate and sustain rents• Industrial organization external focus• Resource-based view internal focus

Conclusion• RBV generalizes to strategic

management and facilitates dialogue between scholars from different perspectives

• It may not be comprehensive…but builds the conversation