Practical implications of the resource-based view

Managers use many decision making tools when developing a firm’s strategic direction. Ideally, such tools yield a good solution for an acceptable amount of application effort. This paper presents the results of an experimental research project that compares the effectiveness of a theory-based strate...

Full description

Saved in:
Bibliographic Details
Published in:Zeitschrift für Betriebswirtschaft 2012-04, Vol.82 (4), p.335-359
Main Authors: Bresser, Rudi K F, Powalla, Christian
Format: Article
Language:English
Subjects:
Decision making
Decision making models
Resource management
Securities markets
Strategic management
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Managers use many decision making tools when developing a firm’s strategic direction. Ideally, such tools yield a good solution for an acceptable amount of application effort. This paper presents the results of an experimental research project that compares the effectiveness of a theory-based strategic decision making tool, theVRIO-framework, with two alternative decision making heuristics for predicting the stock-market performance of different companies. First, we assess how the predictions of theVRIO-framework contrast with decisions based on “gut feeling” using the forecasts derived from a recognition-based decision making tool, theRecognition Heuristic. Secondly, theVRIO-framework’spredictive power is compared to predictions derived fromAnalyst Ratings. Our results suggest that the predictions of theVRIO-framework are superior to those of theRecognition Heuristic and theAnalyst Ratings, supporting the practical usefulness of resource-based theory. We conclude that resource analysis is important to strategic decision making and discuss the implications of our findings for future research and management practice.
ISSN:0044-2372
1861-8928
DOI:10.1007/s11573-012-0553-4