Firm Resources, Core Competencies and Sustainable Competitive Advantage: An Integrative Theoretical Framework
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Date
2016
Authors
Kabue, Lydiah Wanjiru
Kilika, James M.
Journal Title
Journal ISSN
Volume Title
Publisher
Sciedu Press
Abstract
A number of studies based on the Resource Based View (RBV) consider resources as the only sources of gaining a
source of a firm’s sustainable competitive advantage. According to the RBV approach, there are qualities that
resources must possess in order for them to realize sustainable competitive advantage for a firm. The resources must
be valuable, rare, inimitable and immobile across firms. Since resources are more often common than rare, more
homogenous than heterogeneous and more mobile than immobile, then firms have to combine the resources in order
to develop rare and difficult to imitate processes that will act as a source of sustainable competitive advantage. In an
industry where resources are common and mobile, a firm therefore needs to build competencies in order to convert
these common and mobile resources into processes that are rare and immobile to create a source of sustainable
competitive advantage for the firm. A problem therefore exists for firms in a homogenous industry where resources
are shared and are neither rare nor heterogeneous across firms in the industry to develop sources of sustainable
competitive advantage. In order for these firms to develop sources of competitive advantage with the resources
available to them, they would need to develop core competencies to turn the non rare homogenous resources into rare
and heterogeneous processes that competitors cannot imitate. The development of these competencies is the product
of organizational cultures and values formed over time which can be explained by institutional theory. Further, a firm
may not own the resources they need to form a source of sustainable competitive advantage. These resources may be
owned by other firms not controlled by the firm in need of these resources which is a premise of the institutional
theory. While this is acknowledged from the existing literature, there is also lack of an integrated theoretical model
to demonstrate how diverse theories explaining firm strategic behaviour may be utilized to enable firms build
sustainable competitive advantage. This paper proposes an integrated theoretical model for linking firm resources
with core competencies and sustainable competitive advantage while providing for the role of the firm’s external
environment. The proposed model integrates the postulates of the RBV, RDT, Institutional Theory and Porter’s five
forces Model. The emerging theoretical propositions and implications for future research are discussed.
Description
Research Article
Keywords
Firm resources, Core competencies, Sustainable competitive advantage, Resource Based View Theory
Citation
Journal of Management and Strategy Vol. 7, No. 1; 2016