Exploring the Role of IS in Dynamic Capabilities

Resource-Based View And Strategic Management

In the resource-based view of the firm, competitive advantage derives from the acquisition of resources and their deployment through organisational capabilities to bring about desired strategic outcomes (Andreu & Ciborra, 1996; Grant, 1991; Wernerfelt, 1984). These capabilities develop in idiosyncratic and path-dependent ways (Leonard-Barton, 1992) and consequently are difficult to transfer between firms. Typical examples of capabilities are Sony’s competence in miniaturisation of consumer electronics (Prahalad & Hamel, 1990), Caterpillar’s after-sales support and service (Javidan, 1998) and competence in materials (Rangone, 1999). This ‘resource heterogeneity’ and ‘resource immobility’ results in some firms being more competitive than others in a given industry (Collis & Montgomery, 1995; Mata et al., 1995). The sustainability of competitive advantage is dictated by the extent to which the firm's resources are found to be a valuable, rare, inimitable, and non-substitutable (VRIN) (Barney, 1991; Javidan, 1998; Rangone, 1999). Ashurst et al. (2008) state that ‘while resources are clearly a critical element of the RBV, there is growing recognition that resources, per se, do not create value. Rather, value is created by an organisation’s ability to mobilise, marshal, and utilize these resources through the application of capabilities and competences’ (p. 354).