Limitations and critiques of the theory
The popularity of the resource-based view has grown largely from research conducted by Richard Rumelt (1991). Rumelt’s research investigated firm profit differentials within and across industries. He found that there were greater differentials within industries than across industries. This finding implied that firm specific differences must be contributing to these differences.
While it is important to recognise that firms are different, and have different resources, this is not to say that the market is not also important. The challenge is to identify opportunities in the market that are relevant to the resource base of the firm. Conversely, resources need to fit with their environment to deliver competitive advantage. This could be viewed in a Darwinian sense, in that the firms that have the resources best suited to the market are likely to perform the best.
Markets change, however, so this means that firm’s resources also need to change over time to continue to be relevant to the marketplace. This is the central premise of an offshoot of the resource-based view, that being the dynamic capabilities perspective (Teece, Pisano, & Shuen, 1997). Where the resource-based view tends to focus on the types of resources and the characteristics of these resources that make them strategically important, the dynamic capability perspective focuses on how these resources need to change over time to maintain their market relevance. The interrelationship of these popular competitive perspectives can be seen in the following table (Powell, Thomas, & McGee, 2004):
The market-based view, resource-based view and dynamic capabilities perspective all focus on different dimensions of strategy and competitive advantage. While some diehards will claim the superiority of one approach over the others, a more pragmatic approach is to recognize that each offers important insights that can lead to better strategy development....