A Resourced Based View of Strategy

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The Internal Environment:

A Resource-Based View

of Strategy

Chapter 1

What is Strategy?

Chapter 6

Assessing Organizational

Performance

Chapter 2

The General

Environment

Chapter 5

The Internal Environment:

A Resource-Based View of

Strategy

Chapter 3

The Competitive

Environment

Chapter 4

The Internal Environment:

Value Creating Activities

Learning Objectives

After completing this chapter you should be able to:

• Discuss the resource-based view of strategy

• Explain the role of resources, competencies and capabilities in helping an

organization achieve a sustainable competitive advantage

• Explain how the resource-based view can guide strategy

• Evaluate the importance of knowledge management within organizations

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5.1 Introduction

The previous chapter was devoted to an analysis of the internal environment and how

the organization might usefully analyse its value creating activities. In order to help

assess the importance of the firm’s internal environment we placed our discussion

in the context of the factors which account for an organization’s performance. In

Chapter 3 we saw that the answer to the question ‘What drives an organization’s performance?’ was rooted in an understanding of an organization’s markets and industry. This ‘positioning approach’ accepts the importance of an organization’s resources

but argues that in formulating strategy an analysis of the competitive environment is

a more appropriate starting point.

• In Section 5.2 we continue the debate on differential firm performance by

introducing the resource-based view of strategic management. We evaluate the

role of resources, core competencies, and distinctive capabilities in helping the

organization to achieve a competitive advantage.

• Section 5.3 considers some of the attributes an organization’s resources must

possess...