Resource based view (Essay Sample)

Topic: The Resource Based View and Its Relation To Strategic Management
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Introduction.
The resource-based view is a theory dealing with competitive advantage .This ability of competitive advantage s based on application of valuable resources of a firm. (Mwailu & Mercer, 1983 p142, Wernerfelt, 1984, p172: Rumelt, 1984, p557-558; Penrose, 1959)
"The RBV states that a firm develops competitive advantage by not only acquiring but also developing, combining, and effectively deploying its physical, human, and organizational resources in ways that add value and are difficult for competitors to imitate." (Barnley, 1991).
This theory propagates the notion that in it is not enough to have Human resource. In attaining competitive advantage over other players in the market, a combination of other forces comes into play. These forces include the harmonization of physical, human, and the organizational resources into one compact unit, that operates to the exclusion of all other competitors.
"The strong and obvious connection to the resource based view serves the strategic management field in two ways;
1 It foregrounds the role of human resources in questions of strategy, raising the importance of research and practice in strategic management.
2 It encourages a more relevant focus for human resource management, away from the human resource practices themselves and toward their effect on firm resources." (delery 1998, Wright et al.,2001)
Human resource is a vital organ of any firm. The success or failure of a firm is hinged on the effectiveness of the human resource department. The resource-based view emphasizes this point.
The harmonization of all departments and resources into one unit with a common agenda is a clear success path for any firm. This ensures competitive advantage and makes it even harder for competitors to match a firm’s ability or even imitate its skills.
Differences between the resources based view and the industrial organizational view.
Industrial organization is an examination of str...