The resource-based theory and resource-based view (RVB) of firms and corporate strategy is based on the concept of economic rent and the view of the company as a collection of both distinctive and reproducible capabilities.

This systemic view of corporate strategy  is grounded in the perspective that a firm's internal environment, in terms of its resources and capabilities, is more critical to the determination of strategic action than is the external environment.





Resources and Capabilities Defined

Resources are inputs into a firm's production process; can be classified into three categories:

1. Physical capital

2. Human capital

3. Organizational capital.

A capability is a capacity for a set of resources to integratively perform stretch task or an activity... More