Can 'Product Design Capability' be a Resource for an Organization?

Resource Based View of the Firm
Knowledge Center


Next Topic

Resource Based View of the Firm > Forum > Can 'Product Design Capability' be a Resource for an Organization?

Can 'Product Design Capability' be a Resource for an Organization?
Naveed Mushtaq, Professor, Member
I am trying to fit Product (or Service) Design from the perspective of Resource-based theory, with a special emphasis on VRIN (or VRIO).
In this approach, product/service design is then being viewed as a capability which has characteristics of VRIN and could provide a competitive advantage to the firm over others who don't have such design capabilities.
Such a capability might become an important resource at firm level for the organization. Please add your reactions, experiences, tips; anything is welcome. Thanks.

RBV Resource View: Product Design
Nita, CEO, United States, Member
One of the criticisms of RBV is that it doesn't really define what a resource is. There is a good journal article by Kraaijenbrink, Spender, & Groen (2010) that discusses this issue. If you want to look it up, it is 'The resource-based view: A review and assessment of its critiques" from the Journal of Management 36(1), 349-372. It would be worth reading.
I THINK the issue you bring up is discussed in #8.
My personal opinon is that product or service design could definitely be a resouce. The author I mention suggests that even something as nebulous as economy of scale could be a resource. Let's face it, not everyone can design good products or services, so to me it could definitely qualify as a resource.

RBV / Resources
Warren Miller, CPA, CFA, United States, Member
In his book, Gaining and Sustaining Competitive Advantage, Jay Barney gave examples of four types of capital. In my book, Value Maps: Valuation Tools That Unlock Business Wealth (John Wiley & Sons, Inc., 2010), I provided measures for each of the 4 examples that Barney gave:
  1. FINANCIAL - Examples of resources: borrowing capacity, liquidity, ability to raise equity capital, sustainable growth rate.
  2. PHYSICAL - Examples: productive capacity, investment service, dedication to maintenance, fungibility of fixed assets, technological commitment, and access to suppliers.
  3. HUMAN - Examples: educational level, commitment to training, thirst for knowledge, employee commitment, leadership ability, trust, and experience
  4. ORGANIZATIONAL - Examples: loyalty, teamwork, reputation, product innovation, process innovation, speed.
The examples of each type of capital are just that: examples. If you add another resource, make sure you can measure it objectively.

Product/Service Design Capability
Jaap de Jonge, Editor, Netherlands
@Warren Miller, CFA, CPA: Thank you for your outstanding contribution!
So yes, product or service design capability could definitely be a resource at firm level as meant in RBV and would predominantly fall in the 4th category you mentioned.

Special Interest Group Leader

Interested? Sign up for free.

Resource Based View of the Firm
Best Practices

Resource Based View of the Firm
Knowledge Center


Next Topic

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2019 12manage - The Executive Fast Track. V15.1 - Last updated: 19-8-2019. All names of their owners.