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Flashcards in The internal context of strategy Deck (53)
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Resources are inputs to... organisation's production.


Three classifications of firm capital resources:

1. Physical - location, equipment, access to raw materials
2. Human - employee skills, intelligence, relationships
3. Organisational - formal and informal planning, coordinating systems, informal internal and external relationships
(Barney, 1991)


Other intangible resources are:

1. Reputation
2. Intelligence - R&D, patents


... resources tend to be more...

Intangible... important than tangible resources.


Intangible resources may enable a firm to conceive of and implement... that improve its...

....value creating strategies... efficiency and effectiveness (Daft, 1983)


When implementing a value creating strategy not... a firm is said to have a ...

...simultaneously being implemented by current or potential competitors... competitive advantage.


Sustained competitive advantage is achieved when a firm is able to implement a value creating strategy and other firms are...

...unable to duplicate the benefits of this strategy.


In order to understand sources of SCA it must be assumed that firm resources may be...

1. heterogeneous
2. immobile


For an organisation to have the potential of SCA it must have:

1. Valuable resources
2. Rare resource
3. Inimitable resources
4. Non-Substitutability

(ES - combine 3 and 4, and inlace of 4 have organisational support)


A resource is valuable if...

1. They enable a firm to conceive of or implement strategies that improve its efficiency of effectiveness.
2. Take advantages of opportunities and neutralise threats
3. Provide value to customers
4. Provide potential competitive advantages
5. At a cost that allows an organisation to realise acceptable levels of return


A resource is rare if... . When the number of firms that possess the particular resource is less than... then the resource has the potential for... enables a firm to implement a value-creating strategy not simultaneously implemented by a large number of other firms. .... the number needed to generate perfect competition... generating a competitive advantage.

e.g. managerial talent (Hambrick, 1987)


A resource is inimitable if...

...firms that do not possess them, cannot obtain them.


Inimitability may be due to:

1. Unique historical conditions (path)
2. Causal ambiguity - otherwise mangers can be hired away or their success can be systematically studied
3. Social complexity - the interpersonal relations among managers in a firm


Non-substitutability refers to where two valuable firm resource are...

...not strategically equivalent, and cannot be exploited separately to implement the same strategies.


Substitutability can entail the substitute of...

a similar resource, or a different one. E.g. substitute a charismatic leader by a strategic planning process


How is organisational knowledge a VRIN factor?

V -
I -
N -





A boundary condition for the RBV (VRIN) is

...high-velocity markets since it lacks the logic in change and underplays the difficulty in predicting the length of current advantage and sources of future advantage


What word could be used to explain the VRIN framework?



Barney used three applications of the VRIN framework:

1. Strategic planning
2. Information processing systems
3. Positive reputations


Resources are... , whilst capabilities are what...

...what you have, ... you can do with what you have.


Core capabilities are... that an organisation possesses, which in turn allow it to...

clusters of activities... achieve competitive advantage
Henry (2008)
(This is essentially the RBV)


Capabilities are considered core if they... a company strategy.

Leonard-Barton (1992)


For a capability to be core, four dimensions must be addressed:

1. Technical systems
2. Employee knowledge and skill
3. Managerial systems
4. Values and norms


How are technical systems:
1. a capability
2. a rigidity

1. project managers tap into embedded knowledge to provide advantage in timing, accuracy, or amount of detail available
2. skills and process captures in software becomes outdated


How is employee knowledge and skill:
1. a capability
2. a rigidity

1. Where excellence in the dominant discipline then attracts professional elites
2. Where less strength in non-dominant discipline does not attract individuals


How are managerial systems:
1. a capability
2. a rigidity

1. Incorporate unusual blends of skills
2. Highly skilled people will be reluctant to fill a position that is under-utilised or undervalued


How are values and norms:
1. a capability
2. a rigidity

1. Empowerment of project managers and location of responsibility to employees
2. Where employees expect rewards, recognition, and freedom in return for dedication, and don't receive then they may leave


Generic capabilities:

1. Efficiency
2. Quality
3. Innovation
4. Customer responsiveness


Benchmarking is used as a means of understanding how an organisation...

...compares with competitors.