When you talk about how some companies manage to stay ahead of others for years, it often comes down to what they already have inside — their resources. This idea comes from what’s known as the Resource-Based View (RBV), a way of looking at management that says a company’s real strength isn’t just about its market position or competitors, but the unique mix of resources it owns and how it uses them.
In simple terms, the RBV is all about looking inward. It believes that every organization is a little different because of the way its resources are built and combined. So, instead of starting by analyzing the market or environment outside, this theory says — start by understanding what’s already inside your business. It’s like checking your toolbox before going out to fix something.
What the Resource-Based View Really Means
The resource-based perspective is considered a shift from the usual “outside-in” way of studying organizations. Instead of focusing on market trends or competitors, it puts the spotlight on the company’s internal strengths — its people, systems, and processes.
Those who support this theory say that human resources can actually be a company’s most powerful asset. They can be rare, valuable, and not easily copied by others — which makes them strategic advantages (Barney and Wright, 1998; Amit and Shoemaker, 1993).
Researchers like Penrose (1959) and Wernerfelt (1984) talked about how an organization’s uniqueness comes from its collection of resources, especially its human and technological assets. Over the years, this view has gained a lot of attention. People started studying how companies can mix these internal strengths to create “unique bundles” that competitors simply can’t replicate (Boxall and Purcell, 2003).
Barney’s Contribution to Strategic HR Thinking
Barney (1991, 1995) and later Barney & Wright (1998) made the RBV more practical by connecting it to Strategic Human Resource Management (SHRM). They basically said HR isn’t just an administrative function — it’s a strategic partner that helps build long-term advantages.
They introduced the VRIO framework, which helps companies figure out if a resource is:
- Valuable
- Rare
- Inimitable (hard to copy)
- Organized to create value
If your HR policies and people tick all four boxes, then you’re not just managing employees — you’re managing your competitive edge. So, in the RBV world, HR plays a very active role in creating and maintaining an organization’s success.
Applying the Resource-Based View in Real Life
Now, when you apply this concept to real organizations, especially in HR, it’s all about building what others can’t easily imitate. This could be your company’s culture, its learning environment, or how it develops and keeps talent.
Hamel and Prahalad (1993, 1994) introduced the idea of core competencies — the special skills or capabilities that set a business apart. They argued that too many companies get stuck managing today and forget to prepare for tomorrow. The focus should shift from just protecting the past to creating the future.
So, rather than only predicting trends, businesses should be building the kind of strengths that help them shape their future. That includes transforming how they operate, exploring new opportunities, and developing systems that let people learn and grow continuously. Strategy here is not just about fitting in — it’s also about stretching what you have and making the most of it.
The Role of Knowledge and Learning
Knowledge, both the one stored in documents (explicit) and the one in people’s minds (tacit), becomes the lifeblood of the company. According to Boxall and Purcell (2003), what really keeps a firm ahead is how fast it can learn and adapt compared to others.
In fact, they suggest that the resource-based view and the knowledge-based view are almost the same thing. Both stress the idea that a firm’s learning ability — not just its tangible assets — is what drives long-term success.
Leonard (1998) explained that an organization’s capabilities depend on several intertwined elements:
- The skills and experience of its employees
- The technology and systems in place
- The management structure
- The shared values and culture
When all these work together, they create what Leonard called a “knowledge system.” And to keep that system alive, companies have to keep investing in people — through training, rewards, and opportunities for renewal. If they don’t, they risk becoming stagnant.
Where the Resource-Based View Falls Short
Even though the RBV gives a lot of insight, it’s not perfect. Critics have pointed out a few blind spots that are worth noting.
1. It Focuses Too Much on the Inside
Some researchers, like Miller and Shamsie (1996) and Porter (1991), believe the RBV sometimes ignores what’s happening outside the firm. The external environment — market shifts, customer demands, economic conditions — can heavily affect performance. RBV works best when markets are unpredictable because that’s when unique internal resources shine the most.
2. It Misses Common Industry Basics
Another issue is that RBV tends to focus on how companies differ, rather than what they share. Every industry has certain baseline capabilities — the “table stakes,” as Hamel and Prahalad (1994) call them — that you simply must have to compete at all.
For instance, in retail, most companies rely on a mix of core and peripheral workers. The outer group usually consists of lower-skilled staff with higher turnover. So even if a company has strong internal strengths, it still shares many fundamentals with others in the same industry.
3. It’s Not Always About Leverage
In reality, many companies achieve success not by squeezing more out of the same resources (leverage) but by becoming more efficient — producing the same results with fewer resources (rightsizing).
Take B&Q in the UK, for example. They’ve managed to stand out by hiring older, more experienced workers. These employees bring deep knowledge and empathy to customer service, which boosts satisfaction and loyalty. It’s a great example of how people, when valued and developed properly, can directly increase business performance and shareholder value.
Final Thoughts
The resource-based perspective teaches us that real, lasting success often starts from within. When companies understand and develop their internal strengths — their people, knowledge, and systems — they create advantages that competitors can’t easily copy.
But it’s also true that no company can live in a bubble. While focusing on internal assets is important, balancing it with awareness of the external environment ensures survival and relevance in the long run.
In short, it’s not just about having valuable resources — it’s about knowing how to use them, nurture them, and adapt them as the world changes.
