Understanding How Resources and Capabilities Affect Performance: Actively Applying the Resource-Based View in the Classroom

Abstract

The resource-based view is a strategic framework for understanding why some firms outperform others. Its importance is reflected in its wide inclusion in strategy texts as a tool for assessing a firm’s internal strengths and weaknesses. This article outlines an experiential exercise that demonstrates how different bundles of resources and capabilities may explain differences in value created across firms. The primary benefit of this in-class exercise is that students actively apply Barney’s VRIO ( v aluable, r are, i nimitable, and o rganized) framework to understand why their team won or lost. The debrief can also focus on issues such as the impact of imitability on sustainability, why strategies emerge, and elements of a good strategy. Preliminary data from 18 undergraduate and graduate sections indicates that learning objectives have been consistently met.

Keywords

strategic management education experiential exercise resource-based view VRIO framework

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