A Resources-Based View Approach

The origin of the resource-based view (RBV) of the corporation stems from Penrose (1959), when Edith Penrose was highlighting the competitive position of the firm can be achieved by resources (Wernerfelt, 1984; Newbert, 2007). Rubin (1973) argued that the firm was conceptualised as a set of resources clarified that:

“The firm is viewed as a collection of particular resources, that is, resources worth more to the firm than their market value because of specialised experience within the firm” (P, 936).

According to these perspectives, Wernerfelt (1984) was the first researcher who seeks to formalise the RBV and acknowledged that procuring resources may increase profits of the corporations which would be significant in improving product development. Newbert (2007) criticized the work of Wernerfelt as did not capture much attention owing to its abstract nature. Later, Prahalad and Hamel (1990) added value for the RBV through including the use of the corporation’s core competence such as technologies, knowledge and inimitable skills, as the main component in achieving competitive products. In the meanwhile, Barney (1991) stated the terminology of sustained competitive advantage and suggested that the corporation’ sustained competitive advantage can be achieved by valuable, rare, inimitable and non- substitutable resources.

On the other hand, Newbert (2007) critics work of Barney (2001) which constructed his argument based on the assumption that the effective exploitation would automatically

41

enhanced, once the corporations obtains the appropriate resources. However, it is debated that a competitive advantage cannot achieved by obtaining reasonable resources, it is rather the firm’s competence to effectively allocate and use them that count (Mahoney and Pandian 1992). In this regard, the ability to fully exploit the resources (not just acquire them) are important for firms that seeking competitive advantages (Newbert, 2007). The firm’s resources and capabilities and the competitive advantage represent the main concepts of the RBV. Barney (1991) and Barney (2001) have taken RBV approach and considers that corporation’ resources comprise all tangible and intangible assets and capabilities controlled by the firm, which enable a firm to formulate and implement strategies that lead to its performance. It includes the assets, capabilities and knowledge.

Barney (2001) categorised the corporation resources into three groupings, including; physical, organisational and human capitals. First, physical capital implies the firm’s technology, equipment, location and raw materials. Second, organisational capital on the other hand referred to firm’s formal and informal planning, coordination systems and relationships. Third, human capital however, defined as training, experience and employees’ relationships. With respect to the competitive advantage, it is argued that a corporation can be considered as having a competitive advantage when the latter implements unique strategy that is not reproduced by its competitors (Barney, 2001). This can be sustained when the firm is capable to retain its advantage even after rivals duplicated their efforts and resources.

Accordingly, SC can be considered as an organisational resource that is embedded in dyadic or network relationships involving resource exchange and KM activities (Nahapiet and Ghoshal, 1998; Hau et al., 2013), and knowledge can be considered as a resource that is always located in an individual or a collective, or embedded in a routine or process (David et al., 2000; Kim et al., 2013).

42

By linking the RBV rationale with SC literature, SC is a valuable organisational resource because it facilitates the individual interactions necessary for collective action (Leana and Van Buren, 1999). Knowledge is seen as socially constructed and embedded in the social context; some knowledge management scholars have even argued that SC is a key mechanism for achieving knowledge sharing (Chow and Chan, 2008; Van den Hooff and Huysman, 2009; Kim and Lee, 2010). Moreover, the social dynamics derived from interpersonal and group relationships are a primary determinant of KS and knowledge creation (Van den Hooff and Huysman, 2009). It argued that SC is an organisational resource that can facilitate employees’ KS within organisations (Wernerfelt, 1984; Barney, 1991). Therefore, social dynamics among individuals are the most important factors in employees’ contributions to organisational knowledge repositories (Nahapiet and Ghoshal, 1998; Van den Hooff and Huysman, 2009). Since KS is a sensitive behaviour, close interpersonal relationships are needed to encourage employees to collect and donate their knowledge. From the resource-based view, stronger social interaction ties (structural SC), social trust (relational SC), and shared goals and visions (cognitive SC) are critical organisational resources that may increase both KC and KD of organisation employees.

In addition, according to the resource-based view, organisations that are proficient in obtaining and applying knowledge are more likely to be unique and rare, making them difficult for rivals to replicate; such firms have the most potential for sustaining a high level of innovation. The goal of employees’ KS behaviours is the transfer of all employees’ experiences, knowledge, skills, information, and/or expertise to organisational capabilities (i.e. its assets). The more social captial that is transferred to organisational assets, the better innovation (Abu Bakar and Ahmad, 2010).

By linking the RBV rationale with KS literature, Edwards et al. (2009) viewed that knowledge can and should be managed emerges most obviously between those who advocate

43

a resource-based view of the corporation. The RBV offers a theoretical perspective in studies in which KS are embedded, facilitating the understanding and assessment of the full range of an firms’ resources. According to the RBV, firms might create resources in one organisational unit and then use them in other units, meaning resource sharing or transfer within the boundaries of that firm. Along similar lines, organisational ability uses knowledge as a source of sustainable competitive advantage that can increase product and process innovation (Gopalakrishana and Bierlyb, 2001; Kandampully, 2002). Furthermore, according to Hinds et al. (2001) it is important for organisations to consider how share knowledge among employess, so the firms attempt to confirm and use knowledge-based resources that already available in the firm (Damodaran and Olphert, 2000; Davenport and Prusak, 2000; Cabrera and Cabrera, 2005). Therefore, in order to make the best exploit of knowledge exist in firm and develop the best value, this study aims to apply the RBV through SC to support KS, both SC and KS to encourage innovation and to investigate organisational context (OC, OS and IT) as a dimension affecting social capital, knowledge sharing and innovation.