The Management of Resources and the Resource of Management

The resource-based approach of deductive economics, the dynamic capabilifundamental contributions of the resource-based approach. It ties approach of strategy process, and organization theory research on is argued that researchers who wish to narrow the r e s o u r c e organizational learning need to be joined in the next generation of resourceapproach to a static equilibrium model run the risk of stagnation based research. This suggested redirection of resource-based research implies w i t h an inability to sustain interest in the conversation about a return to a "resource-learning" theory of thefirm begun by Penrose (pubr e sou rce s . Sect ion 2 m a i n t a i n s that the substantial literature o n lished 1959). A synthesis of resource-based theory and learning theory allows organizational learning provides some guidance for strategy reus to examine how two sources offirm heterogeneity (resources and mental search on core competencies and capabilities-based competition. models) are intertwined, j BUSN aES 1995. 33.91--101 The major thesis of the article is that the combination of economic, behavioral, and cognitive approaches is the best way forward in strategy. In particular, economics-based research (the management of resources) and research on organizational consensus is beginning to emerge in strategic managelearning (the resource of management) need to be joined in the ment that calls for an active attempt to increase the next generation of resource-based research. dialogue among behavioral, cognitive, and economic approaches to strategy issues (Amit and Schoemaker, 1993; Barney, 1992;Eisenhardt, 1989;Mahoney, 1992b;Schoemaker, The Resource-based 1993; Zajac, 1992). In the spirit of this pluralistic and balanced Theory of the Firm approach (Bowman, 1990; Rumelt, Schendel and Teece, 1991), the literature on organizational learning (behavioral and E c o n o m i c Ren t cognitive literature) can and should be united with the emerging Strategy is constrained by, and dependent on, the firm's resource resource-based theory of the firm (a more economic approach), profile (Collis, 1991; Tallman, 1991). In the resource-based Specifically, this study argues that a holistic approach, which view, the concept of strategy is considered as a "continuing combines behavioral and cognitive logic with economic logic, search for rent" (Bowman, 1974, p. 47) and sustainability of is necessary for advancing the theory of invisible assets (Itami rent, where rent is defined as return in excess of a resource and Roehl, 1987) and sustainable competitive advantage, owner's alternative use costs. Resources are the basic unit of Williamson (1991) notes the uncertainty of whether the dyanalysis (Grant, 1991b). A resource may be conveniently clasnamic capabilities approach (Nelson and Winter, 1982; Prahalad sifted under a few headings-for example, financial, physical, and Hamel, 1990; Rumelt, 1984; Teece, 1990)-in which human, organizational, technological, and intangible (Grant, organizational learning should certainly be a par t -and the 1991a; Hofer and Schendel, 1978)-but (the key idea is that) resource-based approach (Barney, 1991; Conner, 1991; Peteraf, the subdivision of resources may proceed as far as is useful 1993; Wernerfelt, 1984) will play out individually or in for the problem at hand (Penrose, 1959). combination. The argument here is that communication can In contrast to (strong form) efficient market theorists, most and should flow freely between participants of the two resource-based theorists insist that short-term economic rents are approaches. In fact, the two approaches naturally blend into possible (Schoemaker, 1990). Rents may be achieved by owneach other (Mahoney and Pandian, 1992). inga valuable resource that is scarce (Ricardo, 1817). Resources The logic of the study consists of two sections, with each yielding Ricardian rents indude ownership of valuable land, section supporting an overriding idea. Section 1 presents the locational advantages, and various forms of property rights (Rumdt, 1984). Second, monopoly rents may be achieved by