18 Dec Resource-based view
The resource-based view (RBV) emphasizes that firms’ resources are an essential factor that influence competitive advantage and performance. According to RBV, firms control certain resources under various categories that can potentially contribute towards enhanced performance. Prior studies verify firms possess resources that provide the potential for competitive advantage which subsequently lead to superior performance (Wernerfelt, 1984). Extant literature shows the concept of RBV is a useful tool to investigate the relationship between firm resources and firm success. This relationship has been widely explored across many industries but not so among cooperative organizations. According to Meutia & Ismail (2012) the foundations of a firm’s progress, profitability and sustained competitive advantage would normally be reflected through its resources. They emphasized that firms have different categories of resources and the application of this strategic tool allow for the possibility of a different path to growth. Firms can deploy its resources in strategies and policies that will make the firms more efficient and effective (Wernerfelt, 1984). The competing needs of resources for firm’s survival and remain competitive in the market has encouraged managers to effectively manage its resources to enable them to achieve firm’s objectives. Wernerfelt (1984) suggested that idiosyncratic, immobile strategic resources owned or controlled by a firm were sources of competitive advantage. Competition has become increasingly intense, and companies saw the need for more efficient ways to gain competitive advantage in order to survive. In this context, it is realistic both in theory and practice, to examine the relationship between resources and cooperative performance.
- Wernerfelt, B. (1984). A resourceǦbased view of the firm.Strategic management journal, 5(2), 171-180.
- Meutia and Ismail, T. (2012). The Development of Entrepreneurial Social Competence and Business Network to Improve Competitive Advantage and Business Performance of Small Medium Sized Enterprises: A Case Study of Batik Industry in Indonesia. Procedia – Social and Behavioral Sciences, 65, 46 –51.