Business Management Theory

Paper Summary:

The paper is a literature review providing an overview and background of the resource-based view of business management theory. The paper refers to this as the RBV or resource-based theory model of business management and focuses on how an organization can utilize assets and resources within the organization to gain a competitive advantage in the global market. The paper concludes that the results of the preliminary research review suggest many organizations are interested in implementing and using RBV theory. However they must first take time to evaluate their resources and assess the cost-to-benefit ratio if RBV theory is translated into action and policy within the organization.

From the Paper:

"Arend (2006) outlines four basic "tenets" of RBV theory to assess whether empirical tests of the RBV are adequate to assume this theory is applicable to organizations as a whole. While ultimately Arend concludes there is not enough satisfactory empirical analysis providing data supporting RBV, there is much in the way of qualitative analysis supporting the use of RBV as a strategic management tool for growth and sustainability (Barney, 1991). The four tenets described by Arend (2006) suggest for RBV theory to be successful it must meet the following criteria. First, any test of the success or failure of RBV must "measure the benefit predicted by RBV theory" (p. 409). Barney (1991) suggests the "benefit arising from a resource-based philosophy" is that of a competitive advantage, one organizations can sustain if they maintain their resources, or adapt their resources to maintain competitive with other organizations ."

Sample of Sources Used:

• Arend, R.J. (2006)."Tests of the resource-based view: Do the empirics have any clothes?" Strategic Organization, 4(1):409. Available: http://soq.sagepub.com
• Barney, J.B. (1991) Firm resources and sustained competitive advantage. Journal of Management, 17(1):99-120.
• Poppo, L. & Weigelt, K. (2000). "A test of the resource-based model using baseball free agents." Journal of Economics & Management Strategy, 9(4):585-614.
• Powell, T.C. (2001). "Competitive advantage: Logical and philosophical considerations." Strategic Management Journal, 22(9): 875-88.
• Priem, R.L. & Butler, J.E. (2001). Is the resource-based view a useful perspective for strategic management research? Academy of Management Review, 26(1): 22-40.

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