Value, profit and risk: accounting and the resource-based view of the firm
Purpose - This paper aims to argue that the principal components of the Resource-Based View (RBV) as a theory of sustained competitive advantage are not a sufficient basis for a complete and consistent theory of firm behaviour. Two missing elements are value theory and accountability mechanisms. Design/methodology/approach - The paper proposes a link between value theory and accountability using a Resource Value-Resource Risk perspective as an alternative to the Capital Asset Pricing Model. The link operates first from the labour process, where value is created but is imperfectly observable by intra-firm mechanisms of organizational control and outside governance arrangements without incurring monitoring costs. Second, it operates through contractual arrangements which impose fixed cost structures on activities with variable revenues. Findings - The paper thereby explains how value originates in risky and difficult to monitor productive processes and is transmitted as rents to organizational and capital market constituents. It then reviews recent contributions to the RBV, arguing that the proposed new approach overcomes gaps inherent in the alternatives, and thus offers a more complete and integrated view of firm behaviour. Originality/value - The RBV can become a coherent theory of firm behaviour, if it adopts and can integrate the labour theory of value, associated measures of risk arising from the labour process and mechanisms of accountability.
Volume (Year): 23 (2010)
Issue (Month): 5 (June)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=aaaj Email:
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.:
- Avi J. Cohen, 2003. "Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 199-214, Winter.
- Fama, Eugene F & French, Kenneth R, 1992. " The Cross-Section of Expected Stock Returns," Journal of Finance, American Finance Association, vol. 47(2), pages 427-465, June.
- Toms, Steven, 2005. "The resource-based view of the firm and the labour theory of value," The York Management School Working Papers 9, The York Management School, University of York.
- Glenn MacDonald & Michael D. Ryall, 2004. "How Do Value Creation and Competition Determine Whether a Firm Appropriates Value?," Management Science, INFORMS, vol. 50(10), pages 1319-1333, October.
- Armstrong, Peter, 1991. "Contradiction and social dynamics in the capitalist agency relationship," Accounting, Organizations and Society, Elsevier, vol. 16(1), pages 1-25.
- Toms, Steven, 2004. "Asset pricing models, the labour theory of value and their implications for accounting," The York Management School Working Papers 2, The York Management School, University of York.
- Clare, A. D. & Priestley, R. & Thomas, S. H., 1998.
"Reports of beta's death are premature: Evidence from the UK,"
Journal of Banking & Finance,
Elsevier, vol. 22(9), pages 1207-1229, September.
- Andrew Clare, Richard Priestley & Steven Thomas, "undated". "Reports of beta's death are premature: evidence from the UK," CERF Discussion Paper Series 96-05, Economics and Finance Section, School of Social Sciences, Brunel University.
- Alan M. Rugman & Alain Verbeke, 2004. "A Final Word on Edith Penrose," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 205-217, 01.
- Tinker, Anthony, 1984. "Theories of the state and the state of accounting: Economic reductionism and political voluntarism in accounting regulation theory," Journal of Accounting and Public Policy, Elsevier, vol. 3(1), pages 55-74.
- Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720, September.
- Harcourt, G C, 1969. "Some Cambridge Controversies in the Theory of Capital," Journal of Economic Literature, American Economic Association, vol. 7(2), pages 369-405, June.
- Henry Ogden Armour & David J. Teece, 1978. "Organizational Structure and Economic Performance: A Test of the Multidivisional Hypothesis," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 106-122, Spring.
- Tinker, Anthony M. & Merino, Barbara D. & Neimark, Marilyn Dale, 1982. "The normative origins of positive theories: Ideology and accounting thought," Accounting, Organizations and Society, Elsevier, vol. 7(2), pages 167-200, April.
- Frank Mueller, 1996. "Human Resources As Strategic Assets: An Evolutionary Resource-Based Theory," Journal of Management Studies, Wiley Blackwell, vol. 33(6), pages 757-785, November.
- Véronique Ambrosini, 2001. "Tacit Knowledge: Some Suggestions for Operationalization," Journal of Management Studies, Wiley Blackwell, vol. 38(6), pages 811-829, 09.
- Jerker Denrell & Christina Fang & Sidney Winter, 2003. "The Economics of Strategic Opportunity," LEM Papers Series 2003/10, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
- Fama, Eugene F, 1991. " Efficient Capital Markets: II," Journal of Finance, American Finance Association, vol. 46(5), pages 1575-1617, December.
- Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
- Andy Lockett & Steve Thompson, 2004. "Edith Penrose's Contributions to the Resource-based View: An Alternative Perspective," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 193-203, 01.
- William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, 09.
- Henri, Jean-Francois, 2006. "Management control systems and strategy: A resource-based perspective," Accounting, Organizations and Society, Elsevier, vol. 31(6), pages 529-558, August.
- Rosen, Sherwin, 1985. "Implicit Contracts: A Survey," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1144-1175, September.
- Sherwin Rosen, 1985. "Implicit Contracts: A Survey," NBER Working Papers 1635, National Bureau of Economic Research, Inc.
- Cliff Bowman & Juani Swart, 2007. "Whose Human Capital? The Challenge of Value Capture When Capital is Embedded," Journal of Management Studies, Wiley Blackwell, vol. 44(4), pages 488-505, 06.
- Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eme:aaajpp:v:23:y:2010:i:5:p:647-670. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If references are entirely missing, you can add them using this form.