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Unraveling the resource-based tangle

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Author Info
Margaret A. Peteraf (Tuck School of Business at Dartmouth, 100 Tuck Hall, Hanover, NH 03755, USA)
Jay B. Barney (Bank One Chair for Excellence in Corporate Strategy, Fisher College of Business, Ohio State University, 860A Fisher Hall, 2100 Neil Ave., Columbus, OH 43210-1144, USA)
Abstract

Resource-based theory (RBT) is a prime example of a theory that integrates a management perspective with an economics perspective. As such, its challenge is to keep its arguments logically consistent and clear, despite the risk of their becoming entangled, due to competing and possibly conflicting theoretical influences. We argue, in this paper, that to meet this challenge, it is essential to understand the limits to the domain of RBT. Unless RBT is understood as a resource-level and efficiency-oriented analytical tool, its contribution cannot be understood and appreciated fully. Incorporating aspects of economic theory that fall outside this domain will not increase its power and will only add to the confusion.

Continued efforts to increase the analytic precision of RBT and to elaborate its economic logic, however, are worthwhile pursuits. To these aims, then, we provide a sharper definition of competitive advantage, linking this term to value creation and to demand side concerns. Similarly, we provide an economically meaningful definition of value and more precise definitions of critical resources and of economic rents. This allows us to trace a clearer trail of logic, consistent with both the management and the economics perspectives, leading from critical resources to the generation of rents. Copyright © 2003 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1126
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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 24 (2003)
Issue (Month): 4 ()
Pages: 309-323
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:wly:mgtdec:v:24:y:2003:i:4:p:309-323

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Schmalensee, Richard, 1985. "Do Markets Differ Much?," American Economic Review, American Economic Association, vol. 75(3), pages 341-51, June. [Downloadable!] (restricted)
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  2. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law & Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mark Shanley & Margaret Peteraf, 2004. "Deploying, leveraging, and accessing resources within and across firm boundaries: Introduction to the Special Issue," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 291-297. [Downloadable!]
  2. Richard J. Arend, 2008. "Differences in RBV strategic factors and the need to consider opposing factors in turnaround outcomes," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(4), pages 337-355. [Downloadable!]
  3. Egon Franck & Stephan Nüesch, 2006. "Explaining the Star Shift in the Media– Why “Manufactured” Celebrities are More Lucrative than “Self-Made” Superstars," Working Papers 0057, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
  4. Catherine A. Maritan & Margaret A. Peteraf, 2008. "Frontiers of strategic management research: introduction to the special issue," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 71-77. [Downloadable!]
  5. Gottschalg, Oliver & Zollo, Mauricio, 2006. "Interest alignment and competitive advantage," Les Cahiers de Recherche 823, HEC Paris. [Downloadable!]
  6. Guido Buenstorf, 2007. "Creation and Pursuit of Entrepreneurial Opportunities: An Evolutionary Economics Perspective," Small Business Economics, Springer, vol. 28(4), pages 323-337, April. [Downloadable!] (restricted)
  7. G. Buenstorf, 2006. "Perception and pursuit of entrepreneurial opportunities: an evolutionary economics perspective," Papers on Economics and Evolution 2006-01, Max Planck Institute of Economics, Evolutionary Economics Group. [Downloadable!]
  8. Sharon A. Alvarez, . "Two Theories of Entrepreneurship: Alternative Assumptions and the Study of Entrepreneurial Action," Papers on Entrepreneurship, Growth and Public Policy 2005-19, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  9. Pettus, Michael L. & Kor, Yasemin Y. & Mahoney, Joseph T., 2007. "A Theory of Change in Turbulent Environments: The Sequencing of Dynamic Capabilities Following Industry Deregulation," Working Papers 07-0100, University of Illinois at Urbana-Champaign, College of Business. [Downloadable!]
  10. Christopher B. Bingham & Kathleen M. Eisenhardt, 2008. "Position, leverage and opportunity: a typology of strategic logics linking resources with competitive advantage," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 241-256. [Downloadable!]
  11. Alar Kolk & Kristi Püümann, 2008. "Co-Development of Open Innovation Strategy and Dynamic Capabilities as a Source of Corporate Growth," Working Papers 173, School of Economics and Business Administration, Tallinn University of Technology. [Downloadable!]
  12. Adegbesan, Tunji, 2007. "Strategic factor markets: Bargaining, scarcity, and resource complementarity," IESE Research Papers D/666, IESE Business School. [Downloadable!]
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