Resource Based View of the Firm

Basic Principles

• Internal capacity of the firm and firm performance (Barney 1991)

• Valuable, Rare, Imperfectly imitable and imperfectly substitutable

• Interlink with IO (Industrial Organisation Economics)

Delta Case Study

• Selling stock trading and account settlement automation.

• It contributes 33% of group turnover• 60% of revenue coming from BUS (provider of

share trading services)• Board has some knowledge on software and

are dealt by the IT Executives

What is resource

• Resources (tangible)• Capabilities (intangible)

Characteristic of Resource

VRIN• Valuable• Rare• Imperfectly Imitable• Non Substitute

VIRO / VRIO (Barney 2002)

• Value• Imitable• Rare• Organisation

Linking the resources to strategic management

• Competitive Strategy– Competence– Culture

• Corporate Strategy– Change– Dynamic Capabilities

Case Revisit

• Providing reassurance to the client that companies like BUS uses their software and revisit VRIN

• Having a business approach rather than an IT approach

• Adapt the sales pitch to customers

Summary

• VRIN to evaluate a resource view of an organisation