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Is the Resource-Based View a Practical Organizational Theory?

Author

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  • Richard J. Arend

    (College of Business, University of Nevada, Las Vegas, Las Vegas, Nevada 89154)

  • Moren Lévesque

    (University of Waterloo, Waterloo, Ontario N2L 3G1, Canada)

Abstract

We explore the question of whether the resource-based view (RBV) is a practical theory for managers. We test the ability of the RBV to provide two pieces of practical information: (1) the identification of the very few strategic assets from a large set of assets, and (2) the estimation of the functional form of how such strategic assets' critical VRIO characteristic levels relate to firm performance. We do so by modeling the tenets of the RBV and adjusting them in a simulation. We place ourselves in the shoes of the managers by using standard empirical methods on the simulated data to determine whether the RBV does provide practical information. We then discuss what can be done for academics and managers given that determination.

Suggested Citation

  • Richard J. Arend & Moren Lévesque, 2010. "Is the Resource-Based View a Practical Organizational Theory?," Organization Science, INFORMS, vol. 21(4), pages 913-930, August.
    • Handle: RePEc:inm:ororsc:v:21:y:2010:i:4:p:913-930
    DOI: 10.1287/orsc.1090.0484
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