2.4 Theoretical Background
This research project is based on four main theories, which are: (1) the Resource-Based View (RBV); (2) Upper Echelon Theory; (3) Corporate Strategy; and (4) Organizational Isomorphism Theory. The details of each theory are provided as follows:
2.4.1 Resource-Based View (RBV)
The Resource-Based View of the firm continues to grow in the field of business policy and strategy. RBV means that the business performance is determined by the internal nature of the organization resources. Barney (1991) suggested that the sustained competitive advantage derives from the resources and capabilities that a firm controls. Barney argued that critical resources must have four main characteristics, being: valuable, rare, imperfectly …show more content…
Therefore, by focusing on resources, from opportunity recognition to the ability to organize these resources into a firm can lead to the creation of heterogeneous outputs through the firm that are superior to the market. Therefore, the business needs to develop and plan in their existing resources to respond to the external environmental factors and create the competitive advantage in the work process, organizational identity, information technology, experience, knowledge and technology. The capability to plan and specify the existing different resources to combine together allows the business to achieve the goal. For example, Newberta, Gopalakrishnanb, and Kirchhoffb (2008) argued that an entrepreneurial capacity and entrepreneurial management are important capabilities that help in building competitive advantage for firms in the strategic management theory of …show more content…
Hambrick and Mason aimed to present the two important points of the theory as follows: First, the top manager acts on the basis of their personal biases, experiences, and values. If anyone wants to understand why organizations do these things, people need to understand the people at the top. Secondly, the characteristics of the entire top management team (TMT) will be far more predictive of organizational outcomes than will those of the individual top executives (CEO) alone. Particularly, Hambrick and Mason proposed that managers’ characteristics (e.g., demographics) also influence the decisions that they make and therefore the actions adopted by the organizations that they
This research project is based on four main theories, which are: (1) the Resource-Based View (RBV); (2) Upper Echelon Theory; (3) Corporate Strategy; and (4) Organizational Isomorphism Theory. The details of each theory are provided as follows:
2.4.1 Resource-Based View (RBV)
The Resource-Based View of the firm continues to grow in the field of business policy and strategy. RBV means that the business performance is determined by the internal nature of the organization resources. Barney (1991) suggested that the sustained competitive advantage derives from the resources and capabilities that a firm controls. Barney argued that critical resources must have four main characteristics, being: valuable, rare, imperfectly …show more content…
Therefore, by focusing on resources, from opportunity recognition to the ability to organize these resources into a firm can lead to the creation of heterogeneous outputs through the firm that are superior to the market. Therefore, the business needs to develop and plan in their existing resources to respond to the external environmental factors and create the competitive advantage in the work process, organizational identity, information technology, experience, knowledge and technology. The capability to plan and specify the existing different resources to combine together allows the business to achieve the goal. For example, Newberta, Gopalakrishnanb, and Kirchhoffb (2008) argued that an entrepreneurial capacity and entrepreneurial management are important capabilities that help in building competitive advantage for firms in the strategic management theory of …show more content…
Hambrick and Mason aimed to present the two important points of the theory as follows: First, the top manager acts on the basis of their personal biases, experiences, and values. If anyone wants to understand why organizations do these things, people need to understand the people at the top. Secondly, the characteristics of the entire top management team (TMT) will be far more predictive of organizational outcomes than will those of the individual top executives (CEO) alone. Particularly, Hambrick and Mason proposed that managers’ characteristics (e.g., demographics) also influence the decisions that they make and therefore the actions adopted by the organizations that they