Assessing the Critiques of the RBV
| Nicolai Foss |
There is little doubt that the resource-based view, in its various guises and manifestations (e.g., see Gavetti & Levinthal’s distinction between “high church” and “low church” approaches to the RBV), is the dominant perspective in strategic management research. Naturally, all dominant approaches attract critique like flies. This is amplified by the fact that the RBV is still evolving; many things have been unclear (e.g., what exactly is assumed about managerial rationality, the game forms that describe strategic factor markets, the interaction (if any) between factor market and product market behaviors, etc.), and those things that have been reasonably clear (e.g., the RBV’s reliance on competitive equilibrium models) have been controversial. Some of the critiques of the RBV are fairly well-known, for example, the Priem and Butler tautology charge, while other critiques are less generally known.
Given that many of the critiques have basically been around for two decades or more, it is surprising that the first comprehensive treatment of the many critiques of the RBV has just been published — namely Kraaijenbrink, Spender, and Groen’s “The Resource-based View: A Review and Assessment of Its Critiques.”
In this well-written paper, the authors identify eight important and recurring critiques of the RBV. They conclude that only three of these seriously “threathen the RBV’s status as a core theory.” These have to do with the meanings of resource (definitions are all-inclusive) and value (e.g., the tautology charge) and with the explanation of sustained competitive advantage (dynamics is lacking). In the authors’ opinion, much of what is problematic in the RBV boils down to the (high-church) RBV’s reliance on basic neoclassical price theory. They suggest various remedies, notably adopting a more consistent emphasis on “subjectivism, knowledge creation and entrepreneurial judgment” (p. 364) — a proposition that I am not one to take issue with! ;-)
I am not sure I agree with everything in Kraaijenbrink, Spender, and Groen’s paper, but it is well written and thoughtful, and it is, I think, the first synoptic treatment of the many critiques of the RBV in the literature. A most worthy contribution!
Here is the abstract:
The resource-based view (RBV) of the firm has been around for over 20 years—during which time it has been both widely taken up and subjected to considerable criticism. The authors review and assess the principal critiques evident in the literature, arguing they fall into eight categories. They conclude the RBV’s core message can withstand criticism from five of these quite well provided the RBV’s variables, boundaries, and applicability are adequately specified. Three critiques that cannot be readily dismissed call for further theorizing and research. They arise from the indeterminate nature of two of the RBV’s basic concepts — resource and value — and the narrow conceptualization of a firm’s competitive advantage. As their suggestions for this work indicate, the authors feel the RBV community has clung to an inappropriately narrow neoclassical economic rationality, thereby diminishing its opportunities for progress. The authors’ suggestions may assist with developing the RBV into a more viable theory of competitive advantage, especially if it is moved into a genuinely dynamic framework.