A resource-based analysis of the conditions for the emergence of profits

Citation

Becerra, M. (2009), "A resource-based analysis of the conditions for the emergence of profits", Strategic Direction, Vol. 25 No. 6. https://doi.org/10.1108/sd.2009.05625fad.004

A resource-based analysis of the conditions for the emergence of profits

Article Type: Abstracts From: Strategic Direction, Volume 25, Issue 6

Becerra M.Journal of Management, December 2008, Vol. 34 No. 6, Start page: 1110, No. of pages: 17

Purpose – points out that the resource-based view has been successful in explaining how firms sustain competitive advantage but less successful in explaining how firms achieve profits. Explores the relationship between organizational resources and profitability. Design/methodology/approach – drawing on the literature on the resource-based view of the organization, reviews how researchers see the link between resource possession, resource exploitation and profitability. Discusses the conditions that affect whether organizational resources combine in such a way that profits emerge and that generate above-normal profits. Findings – argues that possession of resources does not explain why firms make profits. Concludes that value uncertainty, resources specificity and firm-level innovation explain why some firms are able to obtain more value from the resources that they have than others that have access to the same resources and pay the same market price for them. Contends that it is possible for firms to combine inferior resources and gain higher profits as long as the firm is a set of resources that deal better with value uncertainty, resource specificity and innovation. Research limitations/ implications – Identifies areas for future research. Originality/value – studies the relationship between resources and profitability.ISSN: 0149-2063Reference: 38AC454DOI: 10.1177/0149206308324323

Keywords: Innovation, Profitability, Resources, Strategic management