Q: What Is The Relevance Of The Research-Based View Of The Firm To Strategi

c Management In A Global Environment?

A: The relevance of the resource-based view of the firm to strategic manage
ment in a global environment is the idea that it permits the organization to be
seen as a whole. In doing so, the strengths and weaknesses within the firm can
be examined. This is done because as stated in the Hunger & Wheelen (2006, pa
ge 106) text, "scanning and analyzing the external environment for opportunities
and threats is not enough to provide an organization a competitive advantage."
This procedure is referred to as an organizational analysis, and its primary c
oncerns are the identification and development of an organization's resources an
d competencies. (Source: Hunger & Wheelen - Strategic Management and Business
Policy, 2006)
As stated in the Hunger & Wheelen (2006, page 107) text, Grant had proposed a fi
ve-step, resource-based approach to strategy analysis:
1) Identify and classify the firm's resources in terms of strengths and weakness
es.
2) Combine the firm's strengths into specific capabilities and core competencies
.
3) Appraise the profit potential of these capabilities and competencies in terms
of their potential for sustainable ompetitive advantage and the ability to harv
est the profits resulting from their use.
4) Select the strategy that best exploits the firm's capabilities and competenci
es relative to external opportunities.
5) Identify resource gaps and invest in upgrading weaknesses. (Grant, 1991)
The next obvious question at hand would be where these competencies come from, a
nd there are four different ways that a corporation can acquire these distinctiv
e competencies. According to the Hunger & Wheelen (2006, 107) text; distinctiv
e competencies may be a beginning asset upon the start of the business or someth
ing that one possessed from someone else. Distinctive competencies could also
be shared with some other company or partner, or a company could actually slowly
develop the competency themselves.