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A heterogeneous resource based view for exploring relationships between firm performance and capabilities

A heterogeneous resource based view for exploring relationships between firm performance and... Purpose – The resource‐based view (RBV) of the firm has gained much attention in recent years as a means to understand how a strategic business unit obtains a sustainable competitive advantage. In this framework, several research studies have explored the relationships between resources/capabilities and firm performance. This paper seeks to extend this line of research by explicitly modeling the heterogeneity of such relations across firms in various different industries in exploring the interrelationships between capabilities and performance. Design/methodology/approach – A unique latent structure regression model is developed to provide a discrete representation of this heterogeneity in terms of different clusters or groups of firms who employ different paths to achieve firm performance vis‐à‐vis alternative capabilities. An application of the proposed methodology to a sample of 216 US firms were provided. Findings – Finds that the derived four group latent structure regression solution statistically dominates the one aggregate sample regression function. Substantive interpretation for the findings is provided. Originality/value – The paper contributes to the understanding of the performance effects of investing in capabilities in the RBV framework, which has previously been lacking, especially in the areas of information technology capabilities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Modelling in Management Emerald Publishing

A heterogeneous resource based view for exploring relationships between firm performance and capabilities

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References (102)

Publisher
Emerald Publishing
Copyright
Copyright © 2007 Emerald Group Publishing Limited. All rights reserved.
ISSN
1746-5664
DOI
10.1108/17465660710763407
Publisher site
See Article on Publisher Site

Abstract

Purpose – The resource‐based view (RBV) of the firm has gained much attention in recent years as a means to understand how a strategic business unit obtains a sustainable competitive advantage. In this framework, several research studies have explored the relationships between resources/capabilities and firm performance. This paper seeks to extend this line of research by explicitly modeling the heterogeneity of such relations across firms in various different industries in exploring the interrelationships between capabilities and performance. Design/methodology/approach – A unique latent structure regression model is developed to provide a discrete representation of this heterogeneity in terms of different clusters or groups of firms who employ different paths to achieve firm performance vis‐à‐vis alternative capabilities. An application of the proposed methodology to a sample of 216 US firms were provided. Findings – Finds that the derived four group latent structure regression solution statistically dominates the one aggregate sample regression function. Substantive interpretation for the findings is provided. Originality/value – The paper contributes to the understanding of the performance effects of investing in capabilities in the RBV framework, which has previously been lacking, especially in the areas of information technology capabilities.

Journal

Journal of Modelling in ManagementEmerald Publishing

Published: Jul 10, 2007

Keywords: Resource management; Modelling; Competitive advantage; Company performance

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