How the Resource‐based and the Dynamic Capability Views of the Firm Inform Corporate‐level Strategy
| Published date | 01 December 2003 |
| DOI | http://doi.org/10.1111/j.1467-8551.2003.00380.x |
| Date | 01 December 2003 |
| Author | Veronique Ambrosini,Cliff Bowman |
How the Resource-based and the Dynamic
Capability Views of the Firm Inform
Corporate-level Strategy
Cliff Bowman and Veronique Ambrosini
Cranfield School of Management, Cranfield University, Bedford MK43 0AL, UK
email: c.bowman@cranfield.ac.uk [Bowman]; v.ambrosini@cranfield.ac.uk [Ambrosini]
This paper explains that the resource-based view essentially addresses issues of
competitive strategy, but by integrating some arguments from its evolutionary version,
the dynamic capability view, it can be extended to inform our understanding of
corporate-level strategy. We concentrate on the issue of value creation from corporate
centres and ask how the centre can possess or provide resources. The primary dynamic
capabilities identified by Teece, Pisano and Shuen (1997) are elaborated into six
distinct modes of resource creation. Each mode is considered in relation to a set of
organizational design parameters. We then propose resource-creating configurations
that are congruent with respect to the modes and the required states of the design
parameters. We point out areas of tension that are likely to arise if corporations try to
combine different modes of resource creation. We conclude that corporate centres may
possess resources but must display dynamic capabilities otherwise they will destroy
shareholder value.
Introduction
The resource-based view (RBV) of the firm
(Barney, 1986, 1991, 2001b; Wernerfelt, 1984)
has received a great deal of recent attention
and questions about its utility have been raised
(Barney, 2001a; Priem and Butler, 2001).
Whether one is an opponent or an advocate of
the RBV is perhaps not of prime interest; what is
perhaps more important is to suggest how it
could be clarified, improved and developed. In
this paper, to use Priem and Butler’s (2001, p. 22)
words we try to ‘specify its likely contributions to
knowledge’. In particular we establish some of
the boundaries of application of the RBV to
investigate aspects of value creation by corporate
headquarters. That is, we attempt to identify
some of the contexts to which the resource-based
view can be applied, because, as argued by
Barney (2001b, p. 649), it may be helpful to
‘understand that the resource-based view can be
applied in several different ways, and that the
way it should be applied depends mostly on the
empirical context of the application’.
In order to do so and further our under-
standing of ‘the full implications of resource-
based logic for the sustained strategic advantages
of firms’ (Barney, 2001a, p. 52), we explore in this
paper whether the resource-based view primarily
informs our understanding of competitive strategy
or corporate strategy. We conclude that RBV
applies in essence to competitive, rather than
corporate strategy. It provides insights into
strategy issues at the level of the strategic
business unit (SBU) or individual firm. However,
there are grounds for extending the perspective to
address corporate-level concerns. The evolution-
ary version of the resource-based view, the
‘dynamic capability view’ (Eisenhardt and Martin,
2000; Teece, Pisano and Shuen, 1997), i.e. ‘capability
building’ in Makadok’s (2001) terms, provides
valuable insights into how SBU and corporate-
British Journal of Management, Vol. 14, 289–303 (2003)
r2003 British Academy of Management
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