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Does VRIO help managers evaluate a firm’s resources?

Does VRIO help managers evaluate a firm’s resources? Purpose– The resource-based view and value-rarity-imitability-organisation (VRIO) method have diffused widely into courses aimed at managerial practice, but research has yet to verify whether they help managers analyse a firm’s resources. Following recent interest in the use of strategy tools, the purpose of this paper is to focus on what happens when VRIO informs strategy action. Design/methodology/approach– The paper uses experimental method to evaluate directly users’ analysis guided by VRIO relative to analysis that is not. Systematic coding of the responses evaluates how users select resources to evaluate, in which areas they make recommendations, and what account they take of competitors, dynamic evolution, and resource disadvantages, risks and limitations. Findings– VRIO encouraged users to evaluate resources relative to competitors and competitive dynamics, but resource selection difficulties and failure to evaluate resource disadvantages limited its value. In addition, it drew users to the existing operations and business model. Research limitations/implications– The study highlights a tendency for users to evaluate antecedents and outcomes of resources, and partly supports the view that VRIO elicits inward-looking descriptions. Field-based research is needed to show how using VRIO plays out in full strategy making context. Practical implications– Highlighted limitations in VRIO analysis could be alleviated by better specifying resource selection and by addressing the positive-only tenor of VRIO materials. Originality/value– Only a small number of published studies evaluate VRIO as a method of practical strategic analysis, and this paper is the first to look directly at users’ responses. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Decision Emerald Publishing

Does VRIO help managers evaluate a firm’s resources?

Knott, Paul J.
Management Decision , Volume 53 (8): 17 – Sep 21, 2015
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References (60)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0025-1747
DOI
10.1108/MD-08-2014-0525
Publisher site
See Article on Publisher Site

Abstract

Purpose– The resource-based view and value-rarity-imitability-organisation (VRIO) method have diffused widely into courses aimed at managerial practice, but research has yet to verify whether they help managers analyse a firm’s resources. Following recent interest in the use of strategy tools, the purpose of this paper is to focus on what happens when VRIO informs strategy action. Design/methodology/approach– The paper uses experimental method to evaluate directly users’ analysis guided by VRIO relative to analysis that is not. Systematic coding of the responses evaluates how users select resources to evaluate, in which areas they make recommendations, and what account they take of competitors, dynamic evolution, and resource disadvantages, risks and limitations. Findings– VRIO encouraged users to evaluate resources relative to competitors and competitive dynamics, but resource selection difficulties and failure to evaluate resource disadvantages limited its value. In addition, it drew users to the existing operations and business model. Research limitations/implications– The study highlights a tendency for users to evaluate antecedents and outcomes of resources, and partly supports the view that VRIO elicits inward-looking descriptions. Field-based research is needed to show how using VRIO plays out in full strategy making context. Practical implications– Highlighted limitations in VRIO analysis could be alleviated by better specifying resource selection and by addressing the positive-only tenor of VRIO materials. Originality/value– Only a small number of published studies evaluate VRIO as a method of practical strategic analysis, and this paper is the first to look directly at users’ responses.

Journal

Management Decision – Emerald Publishing

Published: Sep 21, 2015

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