Limitations of Resource Based View of the Firm

      
			              Best Practices
			            
							              24

		            		Andrey Mazkun, United Kingdom
			            
Limitations of Resource Based View of the Firm

	          		What are the limitations of RBV? Can anyone clearly explain it? Thanks.
				      
X

							  			Welcome to the Resource-based View best practices. The topic being discussed here is: "Limitations of Resource Based View of the Firm". 
										
Get access to all of our 900 knowledge centers about management.  Join more than 1,000,000 other members. 

										Log in

Comments

																	  	Sort by date
																	  	Sort by rating
																		
Rating

										              1

						            	Christos Papadimas
Manager, Canada
												
				                Limitations of RBV

													One limitation of the RBV theory is based on the inability to compile an empirical study to measure performance. Due to the heterogeneity of the companies, it is hard to impossible to compile a homogeneous sample.

Furthermore, the RBV does not consider the demand side of the market. A company might have the resources and capabilities to produce competitively but who is the customer/consumer?
				                
										              2

						            	Warren D. Miller, CPA, CFA
Strategy Consultant, United States
												
				                Limitation of RBV

													The limitation of the RBV is that it's applied on an entity-specific basis. Therefore, it is not generalizable.
				                
										              0

						            	Maryam Bidmeshgipour
Student (Other), Malaysia
												
				                Limitation of RBV

													I agree with Warren on this limitation of RBV. As a result there is still no generalized tool that is able to measure it.
				                
										              0

						            	Warren D. Miller, CPA, CFA
Strategy Consultant, United States
												
				                Limitations of RBV

													I respectfully disagree, Maryam. There is a tool that can measure capabilities, whose development is central to deploying the RBV. That tool is Jay Barney's VRINO (valuable, rare, inimitable, non-substitutable, organizationally aligned) framework.

Asking five questions (one for each letter in the acronym) will help gauge the durability of a capability and also its staying power against other capabilities in the competitive domain (industry or strategic group). I use it all the time, and it is powerful.
				                
										              -1

						            	Emad Hassan
consultant, Egypt
												
				                Limitation of RBV

													The main limitation, from my perspective, is that RBV is an endogenous based methodology which puts ... Sign up
				              
										              2

						            	Warren D. Miller, CPA, CFA
Strategy Consultant, United States
												
				                Limitations of RBV

													Emad, I'm not sure about what you mean with "endogenous" and "exogenous" in this context, so let me ... Sign up
				              
										              4

						            	Emad Hassan
consultant, Egypt
												
				                Endogenous Value Perspective

													Warren, thanks for your comment. What I meant by endogenous is when the “value” attribute of a resou... Sign up
				              
										              2

						            	J Iqbal
Professor, Pakistan
												
				                Generic and Specific Limitations of RBV

													All those factors that inhibit implementation or realization of RBV are its limitations. Some of the... Sign up
				              
										              0

						            	Michael Park
Strategy Consultant, United States
												
				                Limitations of RBV

													Hi, this discussion, like many things on this site is great, but perhaps getting too theoretical. Th... Sign up
				              
										              0

						            	Warren D. Miller, CPA, CFA
Strategy Consultant, United States
												
				                Limitations of RBV

													@Michael: please clarify what you mean by "direction for strategy or execution of plans." thanks in ... Sign up
				              
Leave a comment

		                            More on Resource-based View:
		                          
													            	Summary
													            
												              Discussion Topics
												            
		                          	Resource Based View Industries?
Barney Changed VRIN into VRIO
👀Limitations of Resource Based View of the Firm
Sources for Resource Based View
Advantages of RBV (benefits)
RBV & Financial Capability
Challenges of Managing Conglomerates...
Extended RBV Approach
Can 'Product Design Capability' be a Resource for an Organization?
Relevance of RBV When Facing Low Cost Competition
Strategic Resource Planning
Empirical Research of RBV
🔥Relationship Between Isolating Mechanisms / Barriers of Imitation and Company Size
Resource Based View of the Firm and SWOT
Example RBV - Engineering Firm
RBV and Comparative Advantage
RBV in Micro Business?
Resource Based View Identifies Core Competences
The Conditions of RBV are Seemingly Non-Complementary

		                              Special Interest Group
		                            
Do you know a lot about Resource-based View? Become our SIG Leader