Resources and capabilities’ effects on firm performance: what are they?

Abstract

Purpose The purpose of this paper is to empirically examine the moderating effect of competitive advantage on the resource value and rareness combination and firm performance. Design/methodology/approach The authors adopted a quantitative research method to achieve the aims of this study. The data collected came from a sample of footwear firms and the hypotheses assessed by multivariate analysis. Findings The findings provide insights into previously inconsistent findings regarding the exploitation of resources and capabilities and contribute to resolving these issues by considering the conditions under which the resource value and rareness combination contributes to firm performance levels and the effects of competitive advantage on this relationship. Interestingly, the authors find that it cannot be inferred that the rarer the resources and capabilities combination, the greater the probability of attaining competitive advantage. Research limitations/implications As limitations, the authors would highlight the fact that the results are specific to one particular industrial sector, and thus not susceptible to the drawing of generalisations as well as the fact that the study does not make recourse to triangulating its methodology (for example, through interviews), which would generate more precise, detailed and objective information. The findings have important managerial implications and the authors close by presenting future research directions. Originality/value This study offers an explanation for previous mixed findings on the relationship between the resource value and rareness combination and firm performance and makes a contribution regarding how such combinations are of great relevance to the organisation and business strategy to turn in better performance levels.

Top Management Capabilities and Firm Efficiency: Relationship via Resources Acquisition

“…In this context, Camisón et al, (2016) argued that a firm with useful and valuable resources is more efficient and competitive as compared to the firms face resources shortage. Moreover, the findings favor Ferreira and Fernandes, (2017) who scrutinized that adequate resources enable firms to build effective strategies that are beneficial for the firm's efficiency. This research favors the notion of Anwar et al, (2018a) who claim that sufficient resources spur firms' productivity while lack of resources leads to failure.…”

“…Management capabilities and entrepreneurial activities are significantly related to each other which resultantly configure the high growth of business firms (Sahimi, Rizal, Husin & Kamarudin, 2017). Adequate resources enable firms to make effective strategies and plan for the improvement of efficiency (Ferreira & Fernandes, 2017). Drawing on the RBV theory, sufficient resources enable firms to perform their operational activities efficiently that can stimulate their overall organizational performance (Barney & Arikan, 2001).…”

Knowledge and capabilities for products/services development: the UK spin-off firms context

“…In addition to resources outlined in the 'Resource-based View' (RBV) concept, capabilities are the skills or knowledge that allow the implementation and ensure appropriate exploitation of resources (Barney and Mackey, 2005;Ferreira and Fernandes, 2017). Competitive companies, particularly in high-tech sectors, demand a range of key resources and capabilities to facilitate the development process of products and services.…”

Composition-based view of the firm as a promising approach to studying small businesses

“…The focus of this theory is on efficiency-based differences between firms, instead of differences in other areas, such as strategic behaviors, market power, or collusion (Peteraf & Barney, 2003). The key idea of the RBV is that competition between firms arises from their capabilities and resources (Ferreira & Fernandes, 2017;Barney, 1991;Wernerfelt, 1984). A firm can identify its competitors based on the similarity of their products, substitutes, capabilities, and resources (Peteraf & Bergen, 2003).…”

“…For instance, studies have examined how organizations build, combine, and reconfigure their capabilities and resources to respond to rapidly changing business environments (Nason & Wiklund, 2018;Klier et al, 2017;Teece et al, 1997). Scholars such as Ferreira & Fernandes (2017) and Helfat & Peteraf (2003) have also investigated the dynamic life cycle of a firm's capabilities and resources through its growth from birth to death.…”