Resource-Based View of Strategic Management - Essay Example

? Strategic Management Re-Sit Report Resource Based View of Strategic Management Introduction The success or failure of different organizations largely depends upon strategic management. Business policies are basically developed through the integration of diverse management strategies including planning, organizing, performing and evaluating the outcomes. Strategic management entirely focuses on the win-win approach which implies how a particular organization can achieve competitive advantage in its area of service (Gupta et. al., 2007). Previously positioning based view was dominating the strategic management in most of the organizations but in 1980’s resource based view was introduced considering the ever changing customer demands in the advancing business scenario. Since every organization wants to acquire competitive advantage therefore it was difficult to make strategies based on the external business environment due to homogeneity. However, resources such as reputation, credibility of employees, training and development methods etc. may vary from organization to organization and they are significantly hard to replicate (Gupta et. al., 2007). In the contemporary business environment resources based view of strategic management holds a remarkable position. Ever since it has emerged different critics have argued upon its importance in strategic management while some have defended its importance in attaining business superiority. Whatever the case may be one thing is obvious that resource based view in strategic management has actually strengthened the organization’s core values and integrity while improving the overall ethical conduct (Priem and Butler, 2001). This paper aims to investigate Resource Based View and its relevance with Strategic Management. Moreover its role in achieving competitive advantage particularly in an educational institution would be discussed with a case example. Discussion The theory of growth of a firm has actually laid down the foundation of resource based view in strategic management. An individual firm has a number of valuable internal resources which are mostly unique in terms of quality and quantity. For instance, the financial resources including all the monetary reserves, credits, accounts receivables etc., plant resources such as land and equipment, human resource which represents the nature of employees’ intellect, skills and credibility. Moreover the knowledge and expertise of an organization in industry and the overall management structure including planning and reporting are the important internal resources (Harrison, 2012). All of these are then combined with the strategic policies of an organization. The distinguishing nature of resources constitutes an organization’s core values which play a vital role in its overall success or failure. The accurate utilization of all these resources actually represents profitable long term strategic management which is a significant element of competitive advantage. The relevance of resource based view to strategic management can be substantiated on the basis of the fact that organizational strategies largely focus on increasing revenues while occupying unparalleled market share in the industry. On the other hand the sole purpose of resource based view is to achieve competitive advantage which makes it internally linked with the strategic management (Akio, 2005). Competitive Advantage Resource based view in strategic management plays a significant role in acquiring competitive advantage. For instance, if the Corporate Planning Department of a university requires maintaining distinctiveness in its management policies and customer services then it would need to implement resource based view in the following pattern (Knott, 2009): Initially the organization would have to analyze its fundamental possessions including financial resources, plant resources and human resources. These are then divided on the basis of distinctiveness in the industry and overall participation in carrying out different business activities. The organization is required to make future strategies in order to strengthen these resources. For instance, continuous training and development is essential for valuable human resource. These revised resources are then used in formulating extensive business policy while focusing on the internal organizational values and overall status in the society. The resource based view in strategic management is then evaluated on the basis of acquired competitive advantage in the industry. Analyzing the core competencies of an organization is the most important aspect in re source based view of strategic management. This clearly identifies the hidden strengths and weakness of an institution while revealing different opportunities in the service area (Knott, 2009). Example Let’s consider an example of Christ Church University of Canterbury. The university enjoys significant competitive advantage in the education industry while generating huge revenues. The success of the institution has been greatly dependent upon its management strategies which focus over its basis resources. For instance, the university management critically evaluates quality of its infrastructure which plays a significant role in education services (Management Strategy, 2010). Moreover the basic goals and objectives of the organization are combined with internal values and customer oriented services. The intellectual capacities of teachers and other working staff are continuously enhanced by encouraging research and implication of modern teaching methods. Canterbury University sets a substantial example in the educational services because it has incorporated its core values with the strategic management and business policies (Management Strategy, 2010). This has ultimately resulted in unprecedented reputation of the university on national and international level. Conclusion Resource based view has emerged few decades ago in management sciences. Ever since its introduction it has greatly facilitated the overall business operations by making an internal association with strategic management. Resource based view in strategic management focuses on the core values of an organization which are entirely distinctive and hard to imitate by competitors. In the current business environment the external resources are turning homogenous while the competition has significantly increased (Harrison, 2012). This motivates an organization, especially those operating in perfectly elastic consumer market to develop such resources which are unique to them and almost impossible to be replicated. Research indicates that substantial differences in financial resources, plant resources and human resource actually incur competitive advantage (Harrison, 2012). Christ Church University of Canterbury has gained enough success by the efficient application of resource based view in strategic management. Hence other universities are also encouraged to adopt advanced management approaches in order to excel in the current consumer market. References Akio, T 2005, The Critical Assessment of the Resource Based View Strategic Management: The Source of Heterogeneity of the Firm, Ritsumeikan International Affairs, vol. 3, pp. 125-150. Gupta, V, Gollakota, K & Srinivasan, R 2007, Business Policy and Strategic Management: Concepts and Application, PHI Learning, India. Harrison, JS 2012, Foundations in Strategic Management, Cengage Learning, USA. Knott, P 2009, Integrating resource-based theory in a practice-relevant form, Journal of Strategy and Management, vol. 2 iss: 2, pp.163 – 174. Management Strategy 2010, Canterbury Christ Church University, UK, viewed 1st Sep 2013, Priem, RL & Butler, JE 2001, Is the Resource Based “View” a useful perspective for Strategic Management Research? Academy of Management Review, vol. 26 iss:1, pp. 22-40. Read More