chapter 4 General management and strategy
dynamic capabilities perspective
a model that emphasizes a firms ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment
resource based view
a model that sees certain types of resources as key to superior firm performance
social complexity
a situation in which different social and business systems interact with one another
causal ambiguity
a situation in which the cause and effect of a phenomenon are not readily apparent
path dependence
a situation in which the options one faces in the current situation are limited by decisions made in the past
VIRO frameowork
a theoretical framework that explains and predicts firm level competitive advantage Valuable-Rare-costly to IMITATE-Organized to capture value?
resources
any assets that a firm can draw on when formulating and implementing strategy
rare resource
one of four key criteria in the VIRO framework. a resource is rare if the number of firms that possess it is less than the number of firms it would require to reach a state of perfect competition
costly to imitate resource
one of the four key criteria in the VIRO framework. a resource is costly to imitate if firms that do not possess the resource are unable to develop or buy the resource at a comparable cost
valuable resource
one of the four key criteria in the VIRO framework. a resource is valuable if it helps a firm exploit an external opportunity or offset an external threat
organized to capture value
one of the four key criteria in the VIRO framework. the characteristic of having in place an effective organizational structure, processes, and systems to fully exploit the competitive potential of the firms resources, capabilities and competencies
capabilities
organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically
dynamic capabilities
a firms ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage
core rigidity
a former core competency that turned into a liability because the firm failed to hone, refine, and upgrade the competency as the environment changed
SWOT analysis
a framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and W) to derive strategic implications
tangible recources
resources tat have physical attributes and thus are visible
intangible recources
resources that do not have physical attributes and thus are invisible
resource stocks
the firms current level of intangible assets
resource flows
the firms level of investments to maintain or build a resource
value chain
the internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value
core competencies
Unique strengths, embedded deep within a firm, that are critical to gaining and sustaining competative advantage
intellectual property
a critical intangible resource that can provide a strong isolating mechanism, and thus help to sustain a competitive advantage
resource heterogeniety
assumption in the resource based view that a firm is a bundle of resources and capabilities that differ across firms
resource immobility
assumption that the resource based view that a firm has resources that tend to be sticky and that do not move easily from firm to firm
isolating mechanisms
barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy
activities
distinct and fine-grained business processes that enable firms to add incremental value by transforming inputs into goods and services
primary activities
firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain
support activities
firm activities that add value indirectly but are necessary to sustain primary activities
