?Until the early 1980?s strategic management was dominated by neoclassical economics? (Jenkins & Ambrosini 2002:135) Commentators such as Porter (1980 as cited in Barney 1991) suggest that organisations should firstly analyse the business environment, then acquire resources needed to instigate strategies. This neoclassical view assumes that all businesses operate on an equal playing field. In this case, the business who adopts the most suitable strategy to fit the current business environment will be the market leader. The resource-based view (RBV) of the firm is also ?concerned with the relationship between a firm?s resources and competitive advantage.? (Jenkins & Ambrosini 2002:132) However, this theory takes the view that it is the internal and not the external factors of an organisation that influence sustained competitive advantage. (Barney 1991) ?Penrose (1959) suggested that ?uniqueness provides the basis for corporate development: in creating unique products, firms also develop unique capabilities, or ?resources?.? (Mintzberg Ahlstrand & Lampel 1998:276) An article by Birger Wernerfelt (1984) developed Penrose?s views on resources into resource-based theory (RBT).
English: WASHINGTON (Oct. 1, 2009) Chief of Naval ...
The Human Resources Manager
Human Resources (audio drama)He described how a firm?s resources can effect the positioning of an organisation, how diversification can be seen in a new light, and how large organisations can strike a balance between ?the exploitation of existing resources and the development of new ones?. (as cited in Mintzberg et al 1998:276) Barney developed the RBV into a ?full fledged theory? (Minntzberg et al 1998:277) He criticised assumptions made by commentators including Porter because the ?5 forces theory?, along with other neoclassical theories, assumes ?that firms within an industry are identical in terms of the strategically relevant resources.? On top of this, the assumption that resources can be ?bought and sold? by competitors is also criticised. (1991:100). Barney went on to substitute these two assumptions in his RBV article. First, the RBV ?assumes that...