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CRITIQUES AND DEFENCE OF RESOURCE-BASED VIEW OF THE FIRM

In the aim to properly critique
and or defend the resource-based view of the firm, the underlying concepts and
assumptions upon which the theory is based have to be clearly stated. Over the
last few decades, research in strategic management sought to explain a
company’s performance differences from that of its competitors may be due to
its internal resources instead of its external environments (Barney 1991; Tokuda 2004). This led to the birth of the
resource based view of the firm which postulates the “theory” that a firm’s
resources primarily determine its performance, and may also contribute to a
sustainable competitive advantage (SCA) of the firm over its competitors. It
proposes that a firm must have resources and capabilities which are valuable,
rare, inimitable and non-substitutable (VRIN) and must also have the
organizational (O) framework to imbibe and put these to use (Barney 1991; Akio 2005; Kraaijenbrink et al. 2010).

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Further to these points,
according to Barney (1991, 2016), apart from having resources
with the aforementioned qualities, he posits that for a firm to have
sustainable competitive advantage, the firm’s resource must maintain
heterogeneity and must be immobile. The immobility and heterogeneity of a
firm’s resources were the main assumptions held by Barney (1991) in the RBV of the firm. These
foundational concepts of the RBV, according to Madhani (2014), enable managers to the
rationale behind the perception of competencies as a firm’s most important
asset while simultaneously appreciating how the application of these assets can
best improve business performance.

These concepts, irrespective of being
‘elegantly simple to understand’ and their widespread use by managers (Kraaijenbrink et
al. 2010),
form part of the main reasons why the view is criticized amidst many other
criticisms. In their article, Kraaijenbrink et
al. (2010)
placed the main critiques of the RBV into eight categories having analysed the
major critics and their arguments. They argued that the critiquing the RBV have
are helping its proponents identify its many weakness which may help point to
where improvements can be made. 

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