VRIO Analysis Method for Resources Optimization in New Colombian Public Management

VRIO Analysis Method for Resources Optimization in New Colombian Public Management

Copyright: © 2023 |Pages: 22
DOI: 10.4018/978-1-6684-6966-8.ch015
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Colombia is an emerging country and has reflected in the last decades a significant advance for the strategic positioning of both its private organizations at the national and international level, as well as its public organizations that are guided by schemes of the new public management. The organizational approach is guided towards a better state administration, based on transparency, efficiency, effectiveness, and focus on the citizen. For this, the chapter seeks to analyze the benefits and good practices of the VRIO methodology (valuable, rare, inimitable, and organized) as a bastion of the theory of resources and capacities that guide the design, redesign, and optimization of management models of state organizations. This study was conducted under the qualitative approach with documentary analysis and interviews with experts from the state administration, finding an ignorance of this tool to increase the competitiveness of public organizations created to achieve the maximum possible social welfare.
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Currently, organizations strive to attain differentiation, regardless of their size, typology and/or nature. Differentiation leads organizations to gain competitive advantages, and what’s more important, to a sustainability in them. This allows them to maximize their operational results, whether by means of obtaining better financial gains, or by harvesting a better receptivity in their target population.

Competitivity is often intimately related to the concept of Strategic Planning or Management, process that permits a visualization, and later operationalization, of companies’ objectives and goals (Pérez-Uribe, 2018, p.190; Guerras-Martín et al., 2014, p. 70)

Within the realm of the Resources and Capabilities Theory (RCT) of Strategic Management (SM), organizations are extolled to maximize their entire Asset Value (both tangible and intangible) to achieve sustainable competitive advantages in a very volatile, hazardous and uncertain marketplace, where the boundaries of complexity and competitivity are constantly pushed (Fong et al., 2017).

Traditionally, an organization is defined as an entity possessing an administrative structure, a purpose, objective and goals, evolving by means of the capacities and abilities of its workforce. The workforce employs a plethora of resources and inputs (material and immaterial), transforming these into the solutions that allow the organization to fulfil its purpose (Universidad ESAN, 2016).

There are different types of organizations (Table 1), some are profit-oriented, others are pro-bono. The first are hell-bent in maximizing profitability and rentability, while the latter are trying to improve the social impact by means of improving the quality of life (Escobar, 2010).

Table 1.
Types of organizations
Profit- orientedCreated to pursue and attain profitability through their cash-generating activities.
Non- profitDo not pursue profitability, but a social impact in all of its stakeholders and surroundings.

Source. Escobar (2010)

Public organizations and institutions are like what we know as Social Enterprises (Díaz-Foncea & Marcuello, 2012). Villajos and Sanchis (2013) explain these similarities, and further detail how Social Enterprises comply with Nyssens (2006) premise of acquiescing the needs of market, public organizations and civilian society, as illustrated in Table 2:

Table 2.
Social Enterprises Typology
Author (s)PerspectivesSocial Enterprise Type
Neck et al., (2009) Mandate, mission and performance     1. Traditional
     2. Social consequence,
     3. Non-profit,
     4. Social purpose
     5. Hybrid
Lepoutre et al., (2013) Entrepreneurship and endeavor    1. Traditional NGOs
    2. Non-profit Social Enterprise,
    3. Hybrid Social Enterprise y
    4. Profit-oriented Social Enterprise
Galera and Borzaga (2009) Cooperative sector in Europe.    1. Social cooperatives in Italy.
    2. Social initiative cooperatives in Spain,
    3. Social solidarity cooperatives in Portugal.
    4. General Interest cooperatives in France,
    5. New Social cooperatives emerging in countries like Belgium, Finland and the UK.
Spear et al., (2009); Díaz-Foncea and Marcuello, (2012)According to the different activities they utilize achieve their mission    1. Social Enterprises with mutual orientation.
    2. Social Enterprises with external orientation.
    3. Work Integration Social Enterprises. (WISE)

Source. Own elaboration

Key Terms in this Chapter

Administrative Department of the Civil Service: It is the technical, strategic and transversal entity of the Colombian Government that contributes to the well-being of Colombians by means of a continuous improvement of public servants and institutions throughout the national territory.

Organization for Economic Cooperation and Development: As a global forum, we bring together countries and partners from around the world to explore innovative ideas and exchange best practices in public policies. Through thematic committees and expert groups ideas, data and solutions are shared, all of which are aimed to tackle difficult problems and issues such as: inequalities, youth unemployment, the gender gap, the integration of immigrants and/or poverty in senior citizens. This is a continuous learning process in which the challenges met and vanquished somewhere can serve as inspiration and knowledge elsewhere.

National Planning Department: Colombia’s National Government think tank, responsible for coordinating, articulating and supporting the short-, mid- and long-term strategic planning of the country, thusly guiding the cycle of public policies and the prioritization of investment resources.

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