New Horizons in International Business series
Edited by Ben L. Kedia and Subhash C. Jain
Chapter 15: The effect of interdependence and human resource quality on the value-generating capabilities of an organization
In one of the early seminal papers on the resource-based view (RBV) of the firm, Barney (1986) took umbrage with the dominant notion at the time that external (industry) forces were necessarily deterministic of competitive advantage. More specifically, he argued that the resources that a firm possessed were the source of competitive advantage. Since that time, the theoretical elements of the RBV have been codified and several extensions and applications of the theory have been developed (Barney and Arikan, 2001; Crossley, 2009; Johnson, 2000). The RBV states that firms are heterogeneous bundles of resources and competitive differences in rival firms are determined by the various mixes of those resources (Wernerfelt, 1984). Firms that possess resources that are valuable, rare, inimitable and non-substitutable will be positioned to obtain a competitive advantage (Barney, 1991). The maintenance of the competitive advantage is possible through value-generating capabilities (VGCs) – partially composed of the ability to innovate – that endow the firm’s resources with greater potential for wealth creation (Drucker, 1999a, 1999b). As such, one of the most important responsibilities of managers is to seek out resources, evaluate them, and ascertain how best to utilize them (Barney, 1991; Castanias and Helfat, 1991).
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