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Thus, the RBV at its most basic offers an
interpretation of the existence of profits in
equilibrium based on firm heterogeneity.
If that were all it offered, it would be essentially
trivial. It would amount to a statement that
firms differ in performance because they differ
in attributes. True but hardly informative!
It is scarcely surprising that critics of the RBV
(e.g. Priem and Butler 2001a,b) have accused
its proponents of tautological reasoning by
attributing the generation of competitive
advantage to possession of those resources
whose own value reflects these scarcity rents.
However, contributors to the RBV literature
have sought to generate testable hypotheses concerning
those characteristics of such inputs
that are likely to render them strategic resources
in the sense of being a source of sustainable
rents. Barney’s (1991) VRIN framework,
outlined above, sets out the broad conditions
necessary for a resource’s comparative scarcity
to elevate it to strategic significance. Peteraf
and Barney (2003), among others, begin with
the assumption of resource heterogeneity and
then consider which (if any) of a given collection
of resources satisfy the VRIN conditions
outlined above. They point out that resources
differ in their impact on the firm’s ability to
generate cost or differentiation advantages, and
hence performance. Moreover, if the cost of a
resource reflects the full potential rents it may
generate, it cannot, by definition, be a source
of a competitive advantage.
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