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Enhancing the prescriptiveness of the resource‐based view through Porterian activity analysis

Norman T. Sheehan (College of Commerce, University of Saskatchewan, Saskatoon, Canada)
Nicolai J. Foss (Center for Strategic Management and Globalization, Copenhagen Business School, Frederiksberg, Denmark and Department of Strategy and Management, Norwegian School of Economics and Business Administration, Bergen, Norway)

Management Decision

ISSN: 0025-1747

Article publication date: 10 April 2007

7187

Abstract

Purpose

Almost since the inception of the resource‐based view (RBV), critics have complained that the view is weak in the prescriptive dimension. A recent statement of this critique is by Priem and Butler, who argue that the RBV does not address value creation. One aspect of this is that the link between resources and value creation is black‐boxed. The paper aims to argue that a Porterian activity analysis with a focus on activity drivers can remedy this weakness, and how it brings into focus important implementation issues that are neglected in the RBV.

Design/methodology/approach

The study extends Priem and Butler's critique of the RBV by examining the RBV literature in light of Porter's activity‐based framework.

Findings

The resource‐based logic has been gainfully applied in many fields other than strategy. However, because it lacks the concept of activities, the paper argues that it has not reached its full potential in the field of strategy. Formally including the concept of activities and activity drivers addresses the prescriptive shortcomings of the RBV.

Practical implications

Porter's activity drivers are “levers” that managers can manipulate to improve firm value creation in two ways: The first method involves using activity drivers to improve the efficiency and effectiveness of individual activities. The second method involves improving the fit at the level of the firm's activity set. Managers may identify potentially rewarding competitive positions and then use competitive data regarding rivals' activities and drivers to gauge how successful their firm may be in capturing these positions.

Originality/value

This is one of the first attempts to address the prescriptive shortcomings of the RBV using a Porterian activity lens.

Keywords

Citation

Sheehan, N.T. and Foss, N.J. (2007), "Enhancing the prescriptiveness of the resource‐based view through Porterian activity analysis", Management Decision, Vol. 45 No. 3, pp. 450-461. https://doi.org/10.1108/00251740710745070

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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