Review: the resource-based view and information systems research: review, extension, and suggestions for future research
01 Mar 2004-Management Information Systems Quarterly (Society for Information Management and The Management Information Systems Research Center)-Vol. 28, Iss: 1, pp 107-142
TL;DR: In this article, the authors explore and critically evaluate use of the resource-based view of the firm (RBV) by information systems researchers and suggest extensions to make the RBV more useful for empirical IS research.
Abstract: Information systems researchers have a long tradition of drawing on theories from disciplines such as economics, computer science, psychology, and general management and using them in their own research. Because of this, the information systems field has become a rich tapestry of theoretical and conceptual foundations. As new theories are brought into the field, particularly theories that have become dominant in other areas, there may be a benefit in pausing to assess their use and contribution in an IS context. The purpose of this paper is to explore and critically evaluate use of the resource-based view of the firm (RBV) by IS researchers.
The paper provides a brief review of resource-based theory and then suggests extensions to make the RBV more useful for empirical IS research. First, a typology of key IS resources is presented, and these are then described using six traditional resource attributes. Second, we emphasize the particular importance of looking at both resource complementarity and moderating factors when studying IS resource effects on firm performance. Finally, we discuss three considerations that IS researchers need to address when using the RBV empirically. Eight sets of propositions are advanced to help guide future research.
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TL;DR: The time is right to rethink the role of IT strategy, from that of a functional-level strategy--aligned but essentially always subordinate to business strategy--to one that reflects a fusion between IT strategy and business strategy, herein termed digital business strategy.
Abstract: Over the last three decades, the prevailing view of information technology strategy has been that it is a functional-level strategy that must be aligned with the firm's chosen business strategy. Even within this so-called alignment view, business strategy directed IT strategy. During the last decade, the business infrastructure has become digital with increased interconnections among products, processes, and services. Across many firms spanning different industries and sectors, digital technologies (viewed as combinations of information, computing, communication, and connectivity technologies) are fundamentally transforming business strategies, business processes, firm capabilities, products and services, and key interfirm relationships in extended business networks. Accordingly, we argue that the time is right to rethink the role of IT strategy, from that of a functional-level strategy--aligned but essentially always subordinate to business strategy--to one that reflects a fusion between IT strategy and business strategy. This fusion is herein termed digital business strategy.
We identify four key themes to guide our thinking on digital business strategy and help provide a framework to define the next generation of insights. The four themes are (1) the scope of digital business strategy, (2) the scale of digital business strategy, (3) the speed of digital business strategy, and (4) the sources of business value creation and capture in digital business strategy. After elaborating on each of these four themes, we discuss the success metrics and potential performance implications from pursuing a digital business strategy. We also show how the papers in the special issue shed light on digital strategies and offer directions to advance insights and shape future research.
1,983 citations
Cites background from "Review: the resource-based view and..."
...Patterns of corporate scope and the logic of diversification have been shown to impact firm performance (e.g., Berger and Ofek 1995; Lang and Stulz 1994; Wade and Hulland 2004), and strategy research has been concerned with how firms optimally use their core competencies and key assets and resources to extend their product and market reach (e....
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TL;DR: A conceptual framework to describe the emerging organizing logic of digital innovation is developed and an information systems research agenda for digital strategy and the creation and management of corporate information technology infrastructures is developed.
Abstract: In this essay, we argue that pervasive digitization gives birth to a new type of product architecture: the layered modular architecture. The layered modular architecture extends the modular architecture of physical products by incorporating four loosely coupled layers of devices, networks, services, and contents created by digital technology. We posit that this new architecture instigates profound changes in the ways that firms organize for innovation in the future. We develop (1) a conceptual framework to describe the emerging organizing logic of digital innovation and (2) an information systems research agenda for digital strategy and the creation and management of corporate information technology infrastructures.
1,803 citations
Proceedings Article•
08 Jun 2009
TL;DR: It is argued that the process of searching the literature must be comprehensibly described and readers assess the exhaustiveness of the review and other scholars in the field can more confidently (re)use the results in their own research.
Abstract: Science is a cumulative endeavour as new knowledge is often created in the process of interpreting and combining existing knowledge. This is why literature reviews have long played a decisive role in scholarship. The quality of literature reviews is particularly determined by the literature search process. As Sir Isaac Newton eminently put it: If I can see further, it is because I am standing on the shoulders of giants. Drawing on this metaphor, the goal of writing a literature review is to reconstruct the giant of accumulated knowledge in a specific domain. And in doing so, a literature search represents the fundamental first step that makes up the giant's skeleton and largely determines its reconstruction in the subsequent literature analysis. In this paper, we argue that the process of searching the literature must be comprehensibly described. Only then can readers assess the exhaustiveness of the review and other scholars in the field can more confidently (re)use the results in their own research. We set out to explore the methodological rigour of literature review articles published in ten major information systems (IS) journals and show that many of these reviews do not thoroughly document the process of literature search. The results drawn from our analysis lead us to call for more rigour in documenting the literature search process and to present guidelines for crafting a literature review and search in the IS domain.
1,383 citations
TL;DR: It is suggested that IS researchers should look beyond the direct effects of firm-level IT infrastructures and focus their attention on how business units can leverage IT functionalities to better reconfigure and execute business processes in turbulent environments.
Abstract: A burning question for information systems (IS) researchers and practitioners is whether and how IT can build a competitive advantage in turbulent environments. To address this question, this study focuses on the business process level of analysis and introduces the construct of IT leveraging competence---the ability to effectively use IT functionalities. This construct is conceptualized in the context of new product development (NPD). IT leveraging competence is shown to indirectly influence competitive advantage in NPD through two key mediating links: functional competencies (the ability to effectively execute operational NPD processes) and dynamic capabilities (the ability to reconfigure functional competencies to address turbulent environments). Environmental turbulence is also shown to moderate the process by which IT leveraging competence influences competitive advantage in NPD. Empirical data were collected from 180 NPD managers.
Through the construct of IT leveraging competence, the study shows that the effective use of IT functionalities, even generic functionalities, by business units can help build a competitive advantage. The study also shows that the strategic effect of IT leveraging competence is more pronounced in higher levels of environmental turbulence. This effect is not direct: It is fully mediated by both dynamic capabilities and functional competencies. Taken together, these findings suggest that IS researchers should look beyond the direct effects of firm-level IT infrastructures and focus their attention on how business units can leverage IT functionalities to better reconfigure and execute business processes. In turbulent environments, focusing on these aspects is even more vital.
1,301 citations
Cites background from "Review: the resource-based view and..."
...Another open debate in the literature is whether IT-related constructs influence competitive advan tage directly or indirectly (Wade and Hulland 2004).2 Recent literature has questioned a direct impact of IT-related constructs on competitive advantage, argu ing for the existence of mediating links…...
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TL;DR: The resource-based view (RBV) of the firm has been around for over 20 years as mentioned in this paper, during which time it has been both widely taken up and subjected to considerable criticism.
1,285 citations
References
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TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.
46,648 citations
"Review: the resource-based view and..." refers background in this paper
...Imitability Imperfect imitability: history dependent, causal ambiguity, social complexity (Barney 1991) Productive use of firm resources which are… -valuable -rare -appropriable leads to Short term competitive advantage which Is sustained over time due to resource… -imitability -substitutability…...
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...The resource-based view argues that firms possess resources, a subset of which enables them to achieve competitive advantage, and a further subset which leads to superior long-term performance (Barney 1991; Grant 1991; Penrose 1959; Wernerfelt 1984)....
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...A resource has value in an RBV context when it enables a firm to implement strategies that improve efficiency and effectiveness (Barney 1991)....
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...3 For example, Barney (1991) suggested that advantage-creating resources must possess four key attributes: value, rareness, inimitability, and non-substitutability....
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...Thus, a requirement for sustained competitive advantage is that resources be imperfectly mobile or non-tradable (Amit and Schoemaker 1993; Barney 1991; Black and Boal 1994; Dierickx and Cool 1989)....
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TL;DR: The dynamic capabilities framework as mentioned in this paper analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change, and suggests that private wealth creation in regimes of rapid technology change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm.
Abstract: The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
27,902 citations
"Review: the resource-based view and..." refers background in this paper
...Capabilities are often critical drivers of firm performance (Eisenhardt and Martin 2000; Makadok 2001; Teece et al. 1997)....
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...Research has suggested that IS assets (e.g., infrastructure) are the easiest resources for competitors to copy and, therefore, represent the most fragile source of sustainable competitive advantage for a firm (Leonard-Barton 1992; Teece et al. 1997)....
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TL;DR: In this paper, the authors explore the usefulness of analyzing firms from the resource side rather than from the product side, in analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested.
Abstract: Summary The paper explores the usefulness of analysing firms from the resource side rather than from the product side. In analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested. These tools are then used to highlight the new strategic options which naturally emerge from the resource perspective.
18,677 citations
"Review: the resource-based view and..." refers background in this paper
...The resource-based view argues that firms possess resources, a subset of which enables them to achieve competitive advantage, and a further subset which leads to superior long-term performance (Barney 1991; Grant 1991; Penrose 1959; Wernerfelt 1984)....
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TL;DR: The most powerful way to prevail in global competition is still invisible to many companies as discussed by the authors, which is why the concept of the corporation itself has not yet been recognized as a powerful competitive advantage.
Abstract: The most powerful way to prevail in global competition is still invisible to many companies. During the 1980s, top executives were judged on their ability to restructure, declutter, and delayer their corporations. In the 1990s, they’ll be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible — indeed, they’ll have to rethink the concept of the corporation itself.
15,465 citations
"Review: the resource-based view and..." refers background in this paper
...Researchers and practitioners interested in the RBV have used a variety of different terms to talk about a firm's resources, including competencies (Prahalad and Hamel 1990), skills (Grant 1991), strategic assets (Amit and Schoemaker 1993), assets (Ross et al. 1996), and stocks (Capron and Hulland…...
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Book•
01 Jan 1959
TL;DR: In this article, the authors studied the role of large and small firms in a growing economy and found that large firms are more likely to acquire and merge smaller firms in order to increase their size.
Abstract: Introduction Preface 1. Introduction 2. The Firm in Theory 3. The Productive Opportunity of the Firm and the 'Entrepreneur' 4. Expansion Without Merger: The Receding Managerial Limit 5. 'Inherited' Resources and the Direction of Expansion 6. The Economies of Size and the Economies of Growth 7. The Economics of Diversification 8. Expansion Through Acquisition and Merger 9. The Rate of Growth of Firms Through Time 10. The Position of Large and Small Firms in a Growing Economy 11. Growing Firms in a Growing Economy: The Process of Industrial Concentration and the Pattern of Dominance
14,137 citations