Resources and Capabilities

978 Words Mar 30th, 2013 4 Pages
3.0 Resources and capabilities
This paragraph begins by laying out the theoretical dimensions: Resources and capabilities
Definition of resources
In order to get a deeper understanding of the concept resources, a definition can shed some light on this matter. While a variety of definitions of the term resources have been suggested in the literature of resources, this paper introduces the definition first suggested by Teece et al. (1997) who determined resources as ‘firm – specific assets that are difficult if not impossible to imitate’. In comparison to Teece, Barney (1991) describes resources differently. He describes resources as it ‘includes all assets, capabilities, organizational processes, firm attributes, information, knowledge
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| Non – Substitutable | The resource cannot be strategically equivalent valuable resources that are neither rare nor imitable. It can take two forms: a firm can maybe substitute a similar resource that leads to implementing the same strategies. Secondly, different resources can be defined as strategic substitutes. |

Definition of capabilities
Numerous studies have attempted to explain the meaning of capabilities. According to Zahra et al. (2006) ‘capabilities are essentially change – oriented capabilities that help firms redeploy and reconfigure their resource base to meet evolving customer demands and competitor strategies’. Moreover, Teece et al. (1997) describes the term capability as follows: ‘capabilities emphasize the key role of strategic management in appropriately adapting, integrating, and reconfiguring internal and external organizational skills, resources, and functional competences to match the requirements of a changing environment’.

Entrepreneurs can distinguish themselves through obtaining and acquiring new competences. These individual competences have to be distinctive and not easy to imitate (Teece et al., 1997). One example of these capabilities is: Knowledge. Knowledge aims on identifying, deploying and exploiting new opportunities and resources. According to Seelos & Mair (2005), entrepreneurs recognize the value of possible resources due to the
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