Wade & HullandReview

Wade & Hulland/Review: Resource-Based View of IS Research

MIS Quarterly Vol. 28 No. 1, pp. 107-142/March 2004 107

MISQ REVIEW

REVIEW: THE RESOURCE-BASED VIEW ANDINFORMATION SYSTEMS RESEARCH:REVIEW, EXTENSION, AND SUGGESTIONSFOR FUTURE RESEARCH1

By: Michael WadeSchulich School of BusinessYork University4700 Keele StreetToronto, ON M3J [email protected]

John HullandGraduate School of BusinessUniversity of PittsburghPittsburgh, PA [email protected]

Abstract

Information systems researchers have a long tra-dition of drawing on theories from disciplines suchas economics, computer science, psychology, andgeneral management and using them in their ownresearch. Because of this, the information sys-tems field has become a rich tapestry of theore-

1Jane Webster was the accepting senior editor for thispaper.

tical and conceptual foundations. As newtheories are brought into the field, particularlytheories that have become dominant in otherareas, there may be a benefit in pausing to assesstheir use and contribution in an IS context. Thepurpose of this paper is to explore and criticallyevaluate use of the resource-based view of thefirm (RBV) by IS researchers.

The paper provides a brief review of resource-based theory and then suggests extensions tomake the RBV more useful for empirical ISresearch. First, a typology of key IS resources ispresented, and these are then described using sixtraditional resource attributes. Second, we em-phasize the particular importance of looking atboth resource complementarity and moderatingfactors when studying IS resource effects on firmperformance. Finally, we discuss three consi-derations that IS researchers need to addresswhen using the RBV empirically. Eight sets ofpropositions are advanced to help guide futureresearch.

Keywords: Resource-based view, organizationalimpacts of IS, information systems resources,competitive advantage, IS strategic planning,information resource management


108 MIS Quarterly Vol. 28 No. 1/March 2004

Introduction

In 1992, Mahoney and Pandian outlined how theresource-based view of the firm (RBV) might beuseful to the field of strategic management.One benefit of the theory, they noted, was thatit encouraged a dialogue between scholars froma variety of perspectives, which they describedas �good conversation.� Since then, thestrengths and weaknesses of the RBV havebeen vigorously debated in strategicmanagement and other management disciplines(e.g., Barney 2001; Fahy and Smithee 1999;Foss 1998; Priem and Butler 2001a, 2001b).

Very little discussion on the resource-basedview, however, has been conducted in the fieldof information systems. The RBV has beenused in the IS field on a number of occasions(see the Appendix for a list of IS researchstudies using the RBV), yet there has been noeffort to date to comprehensively evaluate itsstrengths and weaknesses. This paper outlineshow the RBV can be useful to research in IS,and provides guidelines for how this researchmight be conducted. In short, the purpose ofthis paper is to initiate a discussion of the RBVwithin the conversation of information systemsresearch.

The paper is organized as follows. First, webriefly introduce the resource-based view of thefirm and describe how the theory has relevancefor IS scholars. Second, we present a typologyof IS resources and then describe, compare,and contrast them with one another using sixkey resource attributes. Third, we address theimportant issues of resource complementarityand the role played by moderating factors thatinfluence the IS resource-firm performancerelationship. We then turn to a discussion ofthree major sets of considerations that ISresearchers need to address when using theRBV in empirical settings.

The Resource-BasedView of the Firm

An Overview of the Resource-Based View

The resource-based view argues that firms pos-sess resources, a subset of which enables themto achieve competitive advantage, and a furthersubset which leads to superior long-term per-formance (Barney 1991; Grant 1991; Penrose1959; Wernerfelt 1984). Empirical studies of firmperformance using the RBV have found dif-ferences not only between firms in the sameindustry (Hansen and Wernerfelt 1989), but alsowithin the narrower confines of groups withinindustries (Cool and Schendel 1988). This sug-gests that the effects of individual, firm-specificresources on performance can be significant(Mahoney and Pandian 1992).

Resources that are valuable and rare and whosebenefits can be appropriated by the owning (orcontrolling) firm provide it with a temporarycompetitive advantage. That advantage can besustained over longer time periods to the extentthat the firm is able to protect against resourceimitation, transfer, or substitution. In general,empirical studies using the theory have stronglysupported the resource-based view (e.g., McGrathet al. 1995; Miller and Shamsie 1996; Zaheer andZaheer 1997).

One of the key challenges RBV theorists havefaced is to define what is meant by a resource.Researchers and practitioners interested in theRBV have used a variety of different terms to talkabout a firm�s resources, including competencies(Prahalad and Hamel 1990), skills (Grant 1991),strategic assets (Amit and Schoemaker 1993),assets (Ross et al. 1996), and stocks (Capron andHulland 1999). This proliferation of definitions andclassifications has been problematic for researchusing the RBV, as it is often unclear whatresearchers mean by key terminology (Priem andButler 2001a). In order to simplify the interpre-


MIS Quarterly Vol. 28 No. 1/March 2004 109

tation of the theory, it is useful to clarify thedefinitions of relevant terms. In this paper, wedefine resources as assets and capabilities thatare available and useful in detecting andresponding to market opportunities or threats(Sanchez et al. 1996; see also Christensen andOverdorf 2000). Together, assets and capabilitiesdefine the set of resources available to the firm.

Assets are defined as anything tangible orintangible the firm can use in its processes forcreating, producing, and/or offering its products(goods or services) to a market, whereas capa-bilities are repeatable patterns of actions in the useof assets to create, produce, and/or offer productsto a market (Sanchez et al. 1996). Assets canserve as inputs to a process, or as the outputs ofa process (Srivastava et al. 1998; Teece et al.1997). Assets can be either tangible (e.g.,information systems hardware, networkinfrastructure) or intangible (e.g., software patents,strong vendor relationships) (Hall 1997; Itami andRoehl 1987; Srivastava et al. 1998). In contrast,capabilities transform inputs into outputs of greaterworth (Amit and Schoemaker 1993; Capron andHulland 1999; Christensen and Overdorf 2000;Sanchez et al. 1996; Schoemaker and Amit 1994).2

Capabilities can include skills, such as technical ormanagerial ability, or processes, such as systemsdevelopment or integration.

What Can the Resource-Based ViewContribute to IS Research?

A critical issue addressed in this review is theusefulness of the resource-based view to ISresearch. The RBV is increasingly being used by

IS researchers and therefore it is valuable topause and reflect on the actual utility of the theoryto the IS field. That the theory has becomeinfluential in other management fields such asstrategy and marketing merely points to itspotential use in IS research. Usefulness in onefield does not dictate usefulness in all fields.Furthermore, the IS field already incorporatestheories from many other areas. This review willexplore what, if anything, the RBV can offer thatthe IS field does not already obtain fromelsewhere.

This review will argue that the RBV is indeeduseful to IS research. The theory provides avaluable way for IS researchers to think about howinformation systems relate to firm strategy andperformance. In particular, the theory provides acogent framework to evaluate the strategic valueof information systems resources. It also providesguidance on how to differentiate among varioustypes of information systems�including theimportant distinction between information tech-nology and information systems�and how tostudy their separate influences on performance(Santhanam and Hartono 2003). Further, thetheory provides a basis for comparison betweenIS and non-IS resources, and thus can facilitatecross-functional research.

Yet, as currently conceptualized, the theory is notideally suited to studying information systems.Unlike some resources, such as brand equity orfinancial assets, IS resources rarely contribute adirect influence to sustained competitive advant-age (SCA). Instead, they form part of a complexchain of assets and capabilities that may lead tosustained performance. In the parlance ofClemons and Row (1991), information systemsresources are necessary, but not sufficient, forSCA. Information systems exert their influence onthe firm through complementary relationships withother firm assets and capabilities. While the RBVrecognizes the role of resource complementarity,it is not well developed in the theory. Therefinement of this element is necessary toenhance the usefulness of the RBV to ISresearchers.

2In this paper we view the terms capabilities, compe-tencies, and core competencies as essentially synony-mous. According to Sanchez et al. (1996), the onlydifference between these terms lies in the fact that corecompetencies are capabilities that achieve competitiveadvantage. Because we explicitly discuss only capa-bilities that lead to superior performance, in this paper theterms can be considered interchangeable.



We recognize three aspects of the RBV thatprovide rare and valuable benefits to ISresearchers. First, by way of a defined set ofresource attributes, the RBV facilitates the spe-cification of information systems resources. Thisspecification provides the groundwork for a set ofmutually exclusive and exhaustive informationsystems assets and capabilities. This review sug-gests a framework for this IS resource set.Second, by using the same set of resourceattributes mentioned above, IS resources can becompared with one another and, perhaps moreimportantly, can be compared with non-ISresources. Thus, the RBV promotes cross-func-tional research through comparisons with otherfirm resources. Third, the RBV sets out a clear linkbetween resources and SCA through a well-defined dependent variable, providing a useful wayto measure the strategic value of IS resources. Inaddition, we recognize one area in which thetheory is deficient as conceived�thecomplementarity of resources�and suggest a wayto extend the theory to reduce the effect of thisdeficiency. We also suggest key moderatingvariables that are relevant to studies of the ISresource-performance relationship and that webelieve warrant greater attention from ISresearchers.

IS Resources and the Resource-Based View

This section starts by reviewing RBV researchconducted to date within the IS field, with an eye toidentifying the major IS resources used in thesestudies. These resources are then organizedusing a typology proposed by Day (1994). This isfollowed by a description of six key resourceattributes that have been employed by RBVresearchers in the past. Finally, we describe eachof the major IS resources identified previouslyusing these six attributes.

Information Systems Resources

The resource-based view started to appear in ISresearch in the mid-1990s (see the Appendix for a

list of RBV studies conducted to date in the ISfield). Much of this work has attempted to identifyand define either a single IS resource or sets of ISresources. For example, Ross et al. (1996)divided IS into three IT assets which together withIT processes would contribute to business value.These three IT assets were labeled human assets(e.g., technical skills, business understanding,problem-solving orientation), technology assets(e.g., physical IT assets, technical platforms, data-bases, architectures, standards) and relationshipassets (e.g., partnerships with other divisions,client relationships, top management sponsorship,shared risk and responsibility). IT processes weredefined as planning ability, cost effective opera-tions and support, and fast delivery. This cate-gorization was later modified by Bharadwaj (2000)to include IT infrastructure, human IT resources,and IT-enabled intangibles.

Other categorization schemes have also beendeveloped. (The Appendix summarizes thesestudies. In Table 2, presented later in the paper,we offer an alternative way of categorizing theseconstructs.) Feeny and Willcocks (1998) iden-tified nine core IS capabilities, which theyorganized into four overlapping areas. Theseareas were business and IT vision (integrationbetween IT and other parts of the firm), design ofIT architectures (IT development skills), delivery ofIS services (implementation, dealing with vendorsand customers), and a core set of capabilitieswhich included IS leadership and informed buying.As a further step, each capability was ranked as tohow much it relied on business, technical, orinterpersonal skills. Bharadwaj et al. (1998) sug-gested and subsequently validated a measure ofIT capability with the following six dimensions:IT/business partnerships, external IT linkages,business IT strategic thinking, IT business processintegration, IT management, and IT infrastructure.Each dimension was found to be reliable and validusing psychometric testing on a sample of seniorIS executives.

The link between IS resources and firm perfor-mance has been investigated by a number ofresearchers. For example, Mata et al. (1995)used resource-based arguments to suggest that



five key IS drivers�customer switching costs,access to capital, proprietary technology, technicalIT skills, and managerial IT skills�lead to sus-tained competitive advantage, although they foundempirical support for only the last of these pro-posed relationships. Powell and Dent-Micallef(1997) divided information systems resources intothree categories: human resources, businessresources, and technology resources. In a study ofthe U.S. retail industry, they found that only humanresources in concert with IT contributed toimproved performance. Among the businessresources, only IT training positively affectedperformance, while no technology resources linkedpositively to performance at all.

Using an approach similar to that employed byKohli and Jaworski (1990) to develop the mar-keting orientation construct, Marchand et al. (2000)proposed an information orientation constructcomprised of three elements: informationtechnology practices (the management of tech-nology), information management practices (themanagement of information collection, organizationand use), and information behaviors and values(behaviors and values of people using theinformation). These factors were validated usingdata from a large-scale cross-sectional survey.The study also found that firms ranking highly onall three information orientation dimensions tendedto have superior performance when compared toother firms.

Many of the studies mentioned above divided ISresources into two categories that can be broadlydefined as IS assets (technology-based) and IScapabilities (systems-based). Research has sug-gested that IS assets (e.g., infrastructure) are theeasiest resources for competitors to copy and,therefore, represent the most fragile source ofsustainable competitive advantage for a firm(Leonard-Barton 1992; Teece et al. 1997). In con-trast, there is growing evidence that competitiveadvantage often depends on the firm�s superiordeployment of capabilities (Christensen andOverdorf 2000; Day 1994) as well as intangibleassets (Hall 1997; Itami and Roehl 1987; Srivistava

et al. 1998). From an RBV perspective, thisadvantage may result from development ofcapabilities over an extended period of time thatbecome embedded in a company and are difficultto trade. Alternatively, the firm may possess acapability that is idiosyncratic to the firm (i.e., anIS expert with specialized knowledge who is loyalto the firm) or difficult to imitate due to pathdependencies (Dierickx and Cool 1989) orembeddedness in a firm�s culture (Barney 1991).Capabilities are often critical drivers of firm per-formance (Eisenhardt and Martin 2000; Makadok2001; Teece et al. 1997).

A Typology of IS Resources

Day (1994) suggests one approach to thinkingabout IS resources. He argues that the capa-bilities (as previously noted, a subset of the firm�sresources) held by a firm can be sorted into threetypes of processes: inside-out, outside-in, andspanning. Inside-out capabilities are deployedfrom inside the firm in response to marketrequirements and opportunities, and tend to beinternally focused (e.g., technology development,cost controls). In contrast, outside-in capabilitiesare externally oriented, placing an emphasis onanticipating market requirements, creating durablecustomer relationships, and understanding com-petitors (e.g., market responsiveness, managingexternal relationships). Finally, spanning capa-bilities, which involve both internal and externalanalysis, are needed to integrate the firm�s inside-out and outside-in capabilities (e.g., managing IS/business partnerships, IS management andplanning). Such an approach is entirely consistentwith Santhanam and Hartono�s (2003) recent callto develop theoretically-based multidimensionalmeasures of IT capability.

Table 1 suggests how eight key IS resourcesdescribed in previous research can be organizedwithin this framework. While this earlier work hasused a variety of different terms for IS resources,it can be mapped directly onto Day�s framework,as shown in Table 2. Each of the resources in thistable is described more fully below.



Table 1. A Typology of IS Resources

Outside-In Spanning Inside-Out

� External relationshipmanagement

� Market responsiveness

� IS-business partnerships� IS planning and change

management

� IS infrastructure� IS technical skills� IS development� Cost effective IS operations

Table 2. A Categorization of Information Systems Resources from Previous StudiesResource Source

Manage externalrelationships

Manage external linkages (Bharadwaj et al. 1998)Manage stakeholder relationships (Benjamin and Levinson 1993)Strong community networks (Jarvenpaa and Leidner 1998)Contract facilitation (Feeny and Willcocks 1998)Informed buying (Feeny and Willcocks 1998)Vendor development (Feeny and Willcocks 1998)Contract monitoring (Feeny and Willcocks 1998)Coordination of buyers and suppliers (Bharadwaj 2000)Customer service (Bharadwaj 2000)

Market responsiveness Fast delivery (Ross et al. 1996)Ability to act quickly (Bharadwaj 2000)Increased market responsiveness (Bharadwaj 2000)Responsiveness (Zaheer and Zaheer 1997)Fast product life cycle (Feeny and Ives 1990)Capacity to frequently update information (Lopes and Galletta 1997)Strategic flexibility (Jarvenpaa and Leidner 1998)Flexible IT systems (Bharadwaj 2000)Organizational flexibility (Powell and Dent-Micallef 1997)

IS-business partnerships(manage internalrelationships)

Integrate IT and business processes (Benjamin and Levinson 1993;Bharadwaj 2000; Bharadwaj et al. 1998)Capacity to understand the effect of IT on other business areas(Benjamin and Levinson 1993)IT/business partnerships (Bharadwaj et al. 1998; Ross et al. 1996)Aligned IT planning (Ross et al. 1996)Business/IT strategic thinking (Bharadwaj et al. 1998)IT/business synergy (Bharawdaj 2000; Jarvenpaa and Leidner 1998)IT assimilation (Armstrong and Sambamurthy 1999)Relationship building (Feeny and Willcocks 1998)IT/strategy integration (Powell and Dent-Micallef 1997)



Table 2. A Categorization of Information Systems Resources from Previous Studies(Continued)IS planning and changemanagement

IT management skills (Bharadwaj 2000; Bharadwaj et al. 1998; Mata etal. 1995)Business understanding (Feeny and Willcocks 1998; Ross et al. 1996)Problem solving orientation (Ross et al. 1996)Business systems thinking (Feeny and Willcocks 1998)Capacity to manage IT change (Benjamin and Levinson 1993)Information management practices (Marchand et al. 2000)Manage architectures/standards (Ross et al. 1996)Architecture planning (Feeny and Willcocks 1998)

IS infrastructure IT infrastructure (Armstrong and Sambamurthy 1999; Bharadwaj 2000;Bharadwaj et al. 1998)Proprietary technology (Mata et al. 1995)Hard infrastructure (Benjamin and Levinson 1993)Soft infrastructure (Benjamin and Levinson 1993)Storage and transmission assets (Lopes and Galletta 1997)Information processing capacity (Lopes and Galletta 1997)Technology asset (Ross et al. 1996)Information technology practices (Marchand et al. 2000)

IS technical skills Technical IT skills (Bharawdaj 2000; Feeny and Willcocks 1998; Mata etal. 1995; Ross et al. 1996)Knowledge assets (Bharadwaj 2000)Using knowledge assets (Bharadwaj 2000)

IS development Technical innovation (Bharadwaj 2000)Experimentation with new technology (Jarvenpaa and Leidner 1998)Capacity to develop services that utilize interactive multimedia (Lopesand Galletta 1997)Alertness (Zaheer and Zaheer 1997)

Cost effective ISoperations

Cost effective operations and support (Ross et al. 1996)Getting IT to function (Feeny and Willcocks 1998)Enhanced product quality (Bharadwaj 2000)

Outside-In Resources

External relationship management. This re-source represents the firm�s ability to managelinkages between the IS function and stakeholdersoutside the firm. It can manifest itself as an abilityto work with suppliers to develop appropriate sys-tems and infrastructure requirements for the firm(Feeny and Willcocks 1998), to manage relation-ships with outsourcing partners (Benjamin andLevinson 1993; Feeny and Willcocks 1998), or tomanage customer relationships by providing solu-

tions, support, and/or customer service (Bharad-waj 2000; Bharadwaj et al. 1998). Many large ISdepartments rely on external partners for asignificant portion of their work. The ability to workwith and manage these relationships is an impor-tant organizational resource leading to competitiveadvantage and superior firm performance.

Market responsiveness. Market responsivenessinvolves both the collection of information fromsources external to the firm as well as the dis-semination of a firm�s market intelligence across



departments, and the organization�s response tothat learning (Day 1994; Kohli and Jaworski1990). It includes the abilities to develop andmanage projects rapidly (Ross et al. 1996) and toreact quickly to changes in market conditions(Bharadwaj 2000; Feeny and Ives 1990; Zaheerand Zaheer 1997). A key aspect of marketresponsiveness is strategic flexibility, which allowsthe organization to undertake strategic changewhen necessary (Bharadwaj 2000; Jarvenpaa andLeidner 1998; Powell and Dent-Micallef 1997).

Spanning Resources

IS-business partnerships. This capability repre-sents the processes of integration and alignmentbetween the IS function and other functional areasor departments of the firm. The importance of ISalignment, particularly with business strategy, hasbeen well documented (e.g., Chan et al. 1997;Reich and Benbasat 1996). This resource hasvariously been referred to as synergy (Bharadwaj2000; Jarvenpaa and Leidner 1999), assimilation(Armstrong and Sambamurthy 1999), and partner-ships (Bharadwaj et al. 1998; Ross et al. 1996).All of these studies recognize the importance ofbuilding relationships internally within the firmbetween the IS function and other areas ordepartments. Such relationships help to span thetraditional gaps that exist between functions anddepartments, resulting in superior competitiveposition and firm performance. An element of thisresource is the support for collaboration within thefirm.

IS planning and change management. Thecapability to plan, manage, and use appropriatetechnology architectures and standards also helpsto span these gaps. Key aspects of this resourceinclude the ability to anticipate future changes andgrowth, to choose platforms (including hardware,network, and software standards) that can accom-modate this change (Feeny and Willcocks 1998;Ross et al. 1996), and to effectively manage theresulting technology change and growth (Bharad-waj et al. 1998; Mata et al. 1995). This resourcehas been defined variously in previous researchas �understanding the business case� (Feeny and

Willcocks 1998; Ross et al. 1996), �problemsolving orientation� (Ross et al. 1996), and�capacity to manage IT change� (Benjamin andLevinson 1993). It includes the ability of IS man-agers to understand how technologies can andshould be used, as well as how to motivate andmanage IS personnel through the change process(Bharadwaj 2000).

Inside-Out Resources

IS infrastructure. Most studies recognize thatmany components of IS infrastructure (such asoff-the-shelf computer hardware and software)convey no particular strategic benefit due to lackof rarity, ease of imitation, and ready mobility.Thus, the types of IS infrastructure mentioned inmost of the existing RBV-IS studies are eitherproprietary or complex and hard to imitate(Benjamin and Levinson 1993; Lopes and Galletta1997). Despite these attempts to focus on thenon-imitable aspects of IS infrastructure, the ISinfrastructure resource has generally not beenfound to be a source of sustained competitiveadvantage for firms (Mata et al. 1995; Powell andDent-Micallef 1997; Ray et al. 2001).

IS technical skills. IS technical skills are a resultof the appropriate, updated technology skills,relating to both systems hardware and software,that are held by the IS/IT employees of a firm(Bharadwaj 2000; Ross et al. 1996). Such skillsdo not include only current technical knowledge,but also the ability to deploy, use, and managethat knowledge. Thus, this resource is focused ontechnical skills that are advanced, complex, and,therefore, difficult to imitate. Although the relativemobility of IS/IT personnel tends to be high, someIS skills cannot be easily transferred, such ascorporate-level knowledge assets (Bharadwaj2000) and technology integration skills (Feeny andWillcocks 1998), and, thus, these resources canbecome a source of sustained competitiveadvantage. This capability is focused primarily onthe present.

IS development. IS development refers to thecapability to develop or experiment with new



technologies (Bharadwaj 2000; Jarvenpaa andLeidner 1998; Lopes and Galletta 1997), as wellas a general level of alertness to emerging tech-nologies and trends that allow a firm to quicklytake advantage of new advances (Zaheer andZaheer 1997). Thus, IS development is future-oriented. IS development includes capabilitiesassociated with managing a systems developmentlife-cycle that is capable of supporting competitiveadvantage (Bharadwaj 2000; Marchand et al.2000; Ross et al. 1996), and should therefore leadto superior firm performance.

Cost effective IS operations. This resourceencompasses the ability to provide efficient andcost-effective IS operations on an ongoing basis.Firms with greater efficiency can develop a long-term competitive advantage by using this capa-bility to reduce costs and develop a cost leader-ship position in their industry (Barney 1991; Porter1985). In the context of IS operations, the abilityto avoid large, persistent cost overruns, unneces-sary downtime, and system failure is likely to bean important precursor to superior performance(Ross et al. 1996). Furthermore, the ability todevelop and manage IT systems of appropriatequality that function effectively can be expected tohave a positive impact on performance (Bharad-waj 2000; Feeny and Willcocks 1998).

Resource Attributes

In order to explore the usefulness of the RBV forIS research, it is necessary to explicitly recognizethe characteristics and attributes of resources thatlead them to become strategically important.Although firms possess many resources, only afew of these have the potential to lead the firm toa position of sustained competitive advantage.What is it, then, that separates regular resourcesfrom those that confer a sustainable strategicbenefit? RBV theorists have approached thisquestion by identifying sets of resource attributesthat might conceptually influence a firm�s com-petitive position. Under this view, only resourcesexhibiting all of these attributes can lead to asustained competitive advantage (SCA) for the

firm.3 For example, Barney (1991) suggested thatadvantage-creating resources must possess fourkey attributes: value, rareness, inimitability, andnon-substitutability. Other typologies have beenproposed by Amit and Schoemaker (1993), Blackand Boal (1994), Collis and Montgomery (1995),and Grant (1991). Although the terms employedacross these frameworks are somewhat different,all attempt to link the heterogeneous, imperfectlymobile, and inimitable, firm-specific resource setspossessed by firms to their competitive positions.Before suggesting how the IS resources identifiedabove can be described using these attributes, wefirst discuss these attributes more generally asthey are viewed in the context of the RBV.

Some researchers have made the useful dis-tinction between resources that help the firm attaina competitive advantage and those that help thefirm to sustain that advantage (e.g., Piccoli et al.2002; Priem and Butler 2001a). Borrowing fromterminology used by Peteraf (1993), these twotypes of resource attributes can be thought of as,respectively, ex ante and ex post limits to compe-tition. Most previous research using the RBV hasblurred these two phases, but we believe that theyneed to be considered separately.

Ex ante limits to competition suggest that prior toany firm�s establishing a superior resource posi-tion, there must be limited competition for thatposition. If any firm wishing to do so can acquireand deploy resources to achieve the position, itcannot by definition be superior. Attributes in thiscategory include value, rarity, and appropriability.Firm resources can only be a source of SCA whenthey are valuable. A resource has value in anRBV context when it enables a firm to implementstrategies that improve efficiency and effective-ness (Barney 1991). Resources with little or no

3RBV theory is built on the assumption that all resourceattributes must be present for that resource to support asustained competitive advantage. While most empiricalwork using the RBV has supported this view, a fewstudies have found results that are inconsistent with thisassumption (e.g., Ainuddin 2000; Poppo and Zenger1998). The key point here is that this assumption isempirically testable, opening the RBV to potentialfalsification (see also Barney 2001).



value have a limited possibility of conferring anSCA on the possessing firm. To take an extremeexample, the use of a new, innovative paper clipdesign may set one firm apart from others, but it isunlikely the paper clip design would be valuablefrom a competitive advantage standpoint.4

Resources that are valuable cannot becomesources of competitive advantage if they are inplentiful supply. Rarity refers to the conditionwhere the resource is not simultaneously availableto a large number of firms (Amit and Schoemaker1993). For example, an ATM network might havesignificant value to a bank, but since it is not rare,it is unlikely to confer a strategic benefit.

The appropriability of a resource relates to its rentearning potential (Amit and Schoemaker 1993;Collis and Montgomery 1995; Grant 1991). Theadvantage created by a rare and valuableresource or by a combination of resources maynot be of major benefit if the firm is unable toappropriate the returns accruing from the advan-tage. Technical skills provide an example of thisphenomenon. The additional benefit accruable toa firm from hiring employees with rare and valu-able technical skills may be appropriated away bythe employee through higher than normal wagedemands.5 Similarly, a computer componentsupplier may be unable to enjoy the benefits ofimproved cost efficiencies if the computer manu-facturer (i.e., the buyer) is sufficiently powerful toappropriate away such benefits. This might bedone by sharing the learning with other suppliers,or by pitting more efficient suppliers against one

another, forcing them to set lower prices than theymight otherwise establish in order to win thebusiness.

Ex post limits to competition mean thatsubsequent to a firm�s gaining a superior positionand earning rents, there must be forces that limitcompetition for those rents (Hidding 2001; Peteraf1993). Attributes in this category include imita-bility, substitutability, and mobility.

In order to sustain a competitive advantage, firmsmust be able to defend that advantage againstimitation.6 The advantage accruing from newlydeveloped features of computer hardware, forinstance, are typically short-lived since compe-titors are able to quickly duplicate the technology(Mata et al. 1995). According to Barney (1991),there are three factors that can contribute to lowimitability: unique firm history, causal ambiguity,and social complexity. The role of history recog-nizes the importance of a firm�s unique past, apast that other firms are no longer able toduplicate�the so-called Ricardian argument. Forexample, a firm might purchase a piece of land atone point in time that subsequently becomes veryvaluable (Hirshleifer 1980; Ricardo 1966). Causalambiguity exists when the link between a resourceand the competitive advantage it confers is poorlyunderstood. This ambiguity may lie in uncertaintyabout how a resource leads to SCA, or it may liein lack of clarity about which resource (orcombination of resources) leads to SCA. Suchambiguity makes it extremely hard for competingfirms to duplicate a resource or copy the way inwhich it is deployed (Alchian 1950; Barney 19861991; Dierickx and Cool 1989; Lippman andRumelt 1982; Reed and DeFillipe 1990). If a firmunderstands how and why its resources lead toSCA, then competing firms can take steps toacquire that knowledge, such as hiring away keypersonnel, or closely observing firm processesand outcomes. Finally, social complexity refers tothe multifarious relationships within the firm and

4An extensive discussion of the concept of value inrelation to resource-based theory has been conducted inthe strategic management literature (Barney 2001; Priemand Butler 2001a, 2001b; Makadok 2001). Most of thisdiscussion has focused on whether or not value can bedetermined endogenously to the theory. The contentionthat resource value is a pre-cursor to SCA has not beenin dispute.

5For example, firms attempting to hire ERP-knowledge-able personnel during the 1999-2000 period discoveredthat they were able to appropriate only part of thepotential rents associated with this resource, with thebalance appropriated by the employees themselves (inthe form of higher wages or compensation).

6It is important to note, however, that firms may notalways be able to mount such defenses as a result ofeither not fully understanding the threat of imitation ornot having the necessary resources to counter it.



between the firm and key stakeholders such asshareholders, suppliers, and customers (Hambrick1987; Klein and Lefler 1981). The complexity ofthese relationships makes them difficult tomanage and even more difficult to imitate. Anexample of this is Wal-Mart�s logistics manage-ment system. Even if all the individual elementsare in place, the relationships between theelements, and thus its complexity, would likelyresult in an imperfect substitute (Dierickx and Cool1989).

A resource has low substitutability if there are few,if any, strategically equivalent resources that are,themselves, rare and inimitable (Amit andSchoemaker 1993; Black and Boal 1994; Collisand Montgomery 1995). Firms may find, forexample, that excellence in IS product develop-ment, systems integration, or environmentalscanning may be achieved through a number ofequifinal paths.

Once a firm establishes a competitive advantagethrough the strategic use of resources, com-petitors will likely attempt to amass comparableresources in order to share in the advantage. Aprimary source of resources is factor (i.e., open)markets (Grant 1991). If firms are able to acquirethe resources necessary to imitate a rival�scompetitive advantage, the rival�s advantage willbe short-lived. Thus, a requirement for sustainedcompetitive advantage is that resources beimperfectly mobile or non-tradable (Amit andSchoemaker 1993; Barney 1991; Black and Boal1994; Dierickx and Cool 1989).7 Some resourcesare more easily bought and sold than others.Technological assets, for example, such as com-

puter hardware and software, are relatively easyto acquire. Technical knowledge, managerialexperience, and many skills and abilities are lesseasy to obtain. Other resources, such ascompany culture, brand assets, and so on, mayonly be available if the firm itself is sold (Grant1991).

The preceding attributes�both ex ante and expost�are summarized in Table 3. Conceptually,the two types of resource attributes are related.When a resource is imitated, more of thatresource exists than before, and thus it becomesless rare. Resources that are highly mobile maybe acquired by competing firms, again affectingthe rarity of the resource for that firm (but not itsoverall rarity in the marketplace). Substitutability,by contrast, affects resource value, not rarity.Resources do not become less rare by havingmultiple substitutes; however, their value can beexpected to diminish as substitute resources aredeveloped. This conceptualization is shown inFigure 1.8

IS Resource Attributes

In this section, we use the resource attributesintroduced above to describe the IS resourcesidentified earlier in the paper. The relationshipsbetween these resources and their attributes aresummarized in Table 4. The entries in this tableshould be interpreted in relative (i.e., versus other

7 Resource mobility and tradability are closely relatedconstructs. As Peteraf (1993, p. 183) notes, resources�are perfectly immobile if they cannot be traded.� On theother hand, imperfectly mobile resources �are notcommonly, easily, or readily exchanged on the market�(Capron and Hulland 1999, p. 42), even though they aretradable. Such barriers to mobility can arise as a resultof switching costs (Montgomery and Wernerfelt 1988),resource co-specialization (Teece 1986), and/or hightransactions costs (Rumelt 1987). We prefer use of theterm resource mobility over resource tradability herebecause the former is a more finely grained constructthan the latter.

8It is important to recognize that imitability and imperfectmobility or tradability are distinct resource attributes.The former prevents imitation by competitors of a firm�scritical resources via direct copying or innovation. Thiscan be due to causal ambiguity, lack of relevantresources on the part of the potential imitator, and time-competitive pressures (Braney 1991; Dierickx and Cool1989). In contrast, imperfect mobility prevents theacquisition and transfer of key resources from one firmto another. Whereas resource imitability leads to anincrease in the availability of a critical resource (thusundermining its rarity), resource mobility describes thedegree to which an existing, fixed stock of a keyresource can be transferred between firms. This distinc-tion has been clearly recognized in previous RBV work(e.g., see Dierickx and Cool 1989; Dutta et al. 1999;Peteraf 1993).



Table 3. Resource Attributes

Resource Attribute Terminology

Ex ante limits to competition

Value Value (Barney 1991; Dierickx and Cool 1989)

Rarity Rare (Barney 1991)Scarcity (Amit and Shoemaker 1993)Idiosyncratic assets (Williamson 1979)

Appropriability Appropriability (Amit and Shoemaker 1993; Collis and Montgomery 1995;Grant 1991)

Ex post limits to competition

Imitability Imperfect imitability: history dependent, causal ambiguity, socialcomplexity (Barney 1991)Replicability (Grant 1991)Inimitability (Amit and Shoemaker 1993; Andrews 1971; Collis and Mont-gomery 1995)Uncertain imitability (Lippman and Rumelt 1982)Social Complexity (Fiol 1991)Causal ambiguity (Dierickx and Cool 1989)

Substitutability Non-substitutability (Barney 1991)Transparency (Grant 1991)Substitutability (Collis and Montgomery 1995)Limited substitutability (Amit and Shoemaker 1993; Dierickx and Cool1989)Substitutes (Black and Boal 1994)

Mobility Imperfect mobility (Barney 1991)Transferability (Grant 1991)Low tradability (Amit and Shoemaker 1993; Dierickx and Cool 1989)Tradability (Black and Boal 1994)



Competitive Advantage Phase Sustainability Phase

Productive use of firm resourceswhich are�-valuable-rare-appropriable

leads to Short termcompetitiveadvantage

which

Is sustained over time due toresource�-imitability-substitutability-mobility

rarity

Low substitutabilityLow mobilityLow imitability

�sustains�

�sustains�

time

value

Ex ante limits to competition Ex post limits to competition

Competitive Advantage Phase Sustainability Phase

Productive use of firm resourceswhich are�-valuable-rare-appropriable

leads to Short termcompetitiveadvantage

which

Is sustained over time due toresource�-imitability-substitutability-mobility

rarity

Low substitutabilityLow mobilityLow imitability

�sustains�

�sustains�

time

value

Ex ante limits to competition Ex post limits to competition

Table 4. IS Resources, by Attribute

Advantage Creation Advantage Sustainability

Value Rarity Appropriability Imitability Substitutability Mobility

Outside-In

Externalrelationshipmanagement

H M � H L � M L L � M L

Marketresponsiveness

H M � H L � M L L � M L

Spanning

IS-businesspartnerships

H M � H L � M L L � M L

IS management/planning H M � H L � M L � M L � M M

Inside-Out

IS infrastructure M � H L � M H H L � M H

IS technical skills M � H L � M M M M � H M � H

IS development M � H M M M M � H M

Cost efficient ISoperations

M � H L � M M L � M M � H M

Note: L = low; M = medium, H = high

Figure 1. The Resource-Based View Over Time



entries in the same table) rather than absoluteterms. We emphasize that this table is based onlimited existing empirical evidence and thereforedescribes hypothesized rather than provenrelationships.

Value

As noted earlier, all of the IS resources describedhere have at least moderate value to the firms thatpossess them. For example, the studies byBharadwaj (2000), Feeny and Willcocks (1998),Lopes and Galletta (1997), and Marchand et al.(2000), Mata et al. (1995), and Ross et al. (1996)have all shown that IS resources have value totheir firms (albeit not always realized). At thesame time, outside-in and spanning resourcesseem to have potentially higher value than inside-out resources to firms. The reason for this is thatthe two former sets of resources�if valuable�must be based on a continued understanding ofthe changing business environment. While inside-out resources can lead to greater efficiency and/oreffectiveness at any particular point in time, it isessential for the firm to track and respond to thechanging business environment over time if it is toattain a sustainable competitive advantage.

Rarity

In general, the key IS resources described hereare all likely to be relatively rare. However, aswas the case for the value attribute, outside-in andspanning resources are likely to be associatedwith a higher degree of rarity than are inside-outresources. The underlying reason for this is thatavailable labor markets allow firms lacking key IStechnology, operational efficiency skills, and ISdevelopment personnel resources to acquire themby offering superior wages or through businessarrangements with external consultants. Similarly,IS infrastructure can be acquired or copied rela-tively easily once it has been in existence even fora comparatively short period of time, although itmay be very rare initially. In contrast, spanningand outside-in resources tend to be sociallycomplex and cannot be easily acquired in factor

markets, and must instead be developed throughon-going, firm-specific investments or throughmergers and/or acquisitions of other companies.

Appropriability

Although it is difficult to determine the exactdegree of appropriability associated with each ISresource, a number of general observations seemwarranted based on past research. First, IS infra-structure, technology skills, IS development, andcost efficiency may be appropriable, rent-gene-rating resources in the short term, particularlywhen the firm possessing the IS resource has afirst-mover advantage in its use, and competitorsfind such uses difficult to wrest away from theadvantaged firm. For example, firms that are firstto possess next-generation hardware and soft-ware are typically able to use this new infra-structure to improve firm efficiency and/or effec-tiveness, thereby enhancing short-term compe-titive advantage and rent-earning potential.Second, the appropriability of the outside-in andspanning resources tends to be lower than that ofthe inside-out resources. This stems from the factthat they tend to be organizationally complex, andthereby more difficult to deploy successfully.

Imitability

Over time, some IS resources become easier toimitate than others. The outside-in and spanningresources (particularly IS-business partnerships)are likely to be more difficult to imitate becauseboth sets of resources will develop and evolveuniquely for each firm. Moreover, these resourcesare likely to be socially complex. In contrast, firmsare likely to be able to develop technology skillsand IS development capabilities through the hiringof relevant expertise via existing labor markets orby interacting with external consulting firms.Although less readily available, the IS manage-ment/planning and cost efficiency capabilities mayalso be available through such means. Thus,these latter resources will be more imitable thanthe outside-in and IS-business partnershipresources, but less imitable than the technology



skills and IS development capability. Finally,existing empirical evidence suggests that ISinfrastructure is particularly easy to imitate overmoderate to longer time periods.

Substitutability

The key question that one needs to answer inconsidering substitutability is whether or not astrategically equivalent resource exists and ispotentially available to the firm while leading to anequifinal outcome. This may involve the use ofvery different resource sets, but could also reflecta decision to acquire and deploy resources in-house versus obtaining them from third parties. Inthe case of IS infrastructure, it seems unlikely thatstrategic alternatives exist that lead to the sameultimate competitive position. Thus, the substitu-tability of this resource will be low. At the otherextreme, firms may be able to outsource their ISdevelopment and other operations to third parties,and thereby compete effectively. Strategic substi-tutes for the outside-in and spanning resourcesare also likely to be rare, although it may bepossible for firms with a subset of these capa-bilities (e.g., market responsiveness) to competeon an equal basis with firms possessing a differentsubset (e.g., IS-business partnerships).

Imperfect Mobility

This final resource attribute captures the extent towhich the underlying resource can be acquiredthrough factor markets. IS infrastructure, onceestablished, is easily disseminated to other firms,and is thus highly mobile.9 Technology skills, aswell as the IS development, cost efficiency, and ISmanagement/planning capabilities can all be

acquired via the marketplace; thus, they are alsorelatively mobile. In contrast, the external rela-tionship management, market responsiveness,and IS-business partnership capabilities aregenerally not readily available in factor markets.Therefore, the mobility of these latter threeresources is expected to be low.

IS Resource Attribute Propositions

Two key implications emerge from the precedingdiscussion. First, it is important to recognize thefundamental difference that can exist between aresource�s initial and longer-term impact on afirm�s competitive position. Second, Table 4suggests that both similarities and differencesexist between distinct types of IS resources (cf.Santhanam and Hartono 2003). Each of theseimplications is examined in turn below.

Resource Creation Versus Sustainability

Although various studies have examined how ISresources can potentially create competitiveadvantage for firms, very little of this work haslooked at sustaining that advantage over time. Infact, Kettinger et al. (1994) concluded that manyof the success stories attributed to new ITconfigurations were only successful for a shortperiod of time. Similarly, early arguments sug-gesting that a so-called first-mover advantage, ifmaintained, could lead to sustained advantage(e.g., Feeny and Ives 1990) were later challenged.In order to sustain a first-mover advantage, firmswould need to become perpetual innovators, arole that may be untenable (Kettinger et al. 1994).More focus on the sustainability of IS resources isclearly warranted (Willcocks et al. 1997).10

9Note that this statement assumes that IS hardware is adiscrete and separable part of the firm�s overall ISresource set, and that it can be transferred from one firmto another with relative ease. However, as one reviewernoted, this may only be a recent phenomenon. Old, pre-ERP collections of legacy systems and databases werefar more difficult to either imitate (due to organizationalcomplexity; Barney 1991) or acquire (due to co-specialization; see Barney 2001; Teece 1986).

10Defining precisely what is meant by the term sustain-able is trickier than it might first appear. Barney (1991,p. 102) clearly states that a sustained competitiveadvantage is one that �continues to exist after efforts toduplicate that advantage have ceased,� and that thisdefinition of SCA is equilibrium-based. However, asWiggins and Ruefli (2002, p. 84) note, while Barney�sdefinition is theoretically precise, it has proven to be



As we noted earlier, the ex post notions ofresource imitability, substitutability, and mobilityaffect the ex ante notion of rarity. As resourcesare copied and traded, they become less rare(even when they maintain their value and appro-priability). Because resource rarity is critical to themaintenance of longer-term competitive advan-tage, we predict the following:

Proposition 1: Only IS resourcesthat are (1) inimitable, (2) non-substi-tutable, and (3) imperfectly mobile willhave a positive effect on competitiveposition in the longer term.

Outside-In Versus Spanning VersusInside-Out Resources

Proposition 1 is very general, and applies to bothIS and non-IS resources. Our earlier review of ISresources suggests, however, that more specificpredictions can be made for different types ofresources. In particular, visual inspection ofTable 4 suggests that outside-in and spanningresources tend to have similar resource attributes.In general, when compared to inside-out re-sources, they tend to have somewhat greatervalue, be rarer (but less appropriable), be moredifficult to imitate or acquire through trade, andhave fewer strategic substitutes. Focusing for amoment on the first two of these attributes, thissuggests that firms possessing superior externalrelations, market responsiveness, IS-businesspartnership, and IS management/planning re-sources are likely to initially outperform com-petitors that rely more on resources that areinternally focused (e.g., IS infrastructure, tech-nology skills, IS development, and cost efficient

operations).11 Furthermore, because it is harderto imitate, acquire, or find strategic substitutes forthe former set of resources than for the latter,outside-in and spanning resources are more likelyto maintain their rarity, and thus support a sus-tainable competitive position for a longer period oftime. Thus:

Proposition 2: Outside-in and span-ning IS resources will have a strongerimpact than inside-out IS resourceson initial competitive position.

Proposition 3: Outside-in and span-ning IS resources will have a moreenduring impact than inside-out ISresources on long-term competitiveposition.

A disproportionate share of the existing workwithin IS looking at the link between IS resourcesand firm performance or competitive position hasfocused either primarily or exclusively on thoseresources that we have characterized above asinside-out resources. However, the precedingdiscussion suggests strongly that the key driversof a longer-term competitive position are morelikely to be the result of superior outside-in andspanning resources, whereas those resourcesthat have received the greatest attention to datetend to be more transitory in their impact onperformance. Thus, one key conclusion to bedrawn from our review is that greater attentionneeds to be paid to all types of IS resources, andnot just those that are internally focused (Strauband Watson 2001). This does not mean thatresources such as IS infrastructure, technologyskills, IS development, and cost efficiency shouldbe ignored, but that their effects on competitiveposition and/or performance should be examinedjointly with those of other, less inwardly focused IS(and non-IS) resources.

�virtually impossible to meaningfully operationalize quan-titatively.� Others (e.g., Jacobsen 1988; Porter 1985)have suggested that a sustained competitive advantageis a competitive advantage that endures for a longerperiod of calendar time. In this section, we adopt thelatter perspective in order to develop empirically testablepropositions. We discuss this point in more detail in thesection on using the RBV in IS research.

11This initial period will typically be relatively short induration (e.g., 6 months to 1 year), representing the timerequired for competitors to imitate or acquire thenecessary resource(s). If these can be quickly attainedor duplicated, then the short-term competitive advantagewill prove to be fleeting, representing little more than afirst-mover advantage.



Potential Moderators

The discussion thus far has assumed that ISresources directly affect the performance and/orcompetitive advantage of the firm. However, thereis considerable and growing evidence to suggestthat these effects may be more correctly viewedas both contingent and complementary. We beginthis section by discussing the issue of resourcecomplementarity in general, and then turn to anidentification of key moderators that we believecan affect the IS resource-performance relation-ship.

Resource Complementarity

Conceptual and empirical development of theRBV as outlined above has resulted in a usefulway to analyze the strategic value of resources.The further subdivision of resource attributes intothose that help to create a competitive advantageand to sustain such an advantage once createdhelps to account for changes in performance overtime. However, the RBV as currently conceivedfails to adequately consider the fact that resourcesrarely act alone in creating or sustaining compe-titive advantage. This is particularly true of ISresources that, in almost all cases, act in con-junction with other firm resources to providestrategic benefits (Ravichandran andLertwongsatien 2002). For example, Powell andDent-Micallef (1997) concluded that the comple-mentary use of IT and human resources lead tosuperior firm performance, and Benjamin andLevinson (1993) concluded that performancedepends on how IT is integrated with organiza-tional, technical, and business resources.

The issue of complementarity is an important onesince it implies a more complex role for ISresources within the firm (Alavi and Leidner 2001;Henderson and Venkatraman 1993). In the sameway that IT software is useless without IT hard-ware (and vice versa), IS resources play aninterdependent role with other firm resources(Keen 1993; Walton 1989). Yet, the nature of thisrole is largely unknown. Kettinger et al. (1994)

concede that IT-based success rests on the abilityto �fit the pieces together� but offer little guidanceon how this might happen. Jarvenpaa andLeidner (1998) note that IT can generate compe-titive value only if deployed so that it leveragespreexisting business and human resources in thefirm via co-presence or complementarity. Yet, theprocess by which IS resources interact with otherfirm resources is poorly understood, as is thenature of those resources (Ravichandran andLertwongsatien 2002).

While recognized by various RBV theorists asimportant, the role of resource complementaritywithin the theory has not been extensivelydeveloped (Amit and Schoemaker 1993; Dierickxand Cool 1989; Teece 1986). Complementarityrefers to how one resource may influence another,and how the relationship between them affectscompetitive position or performance (Teece 1986).Black and Boal (1994) note that resources canhave one of three possible effects on one another:compensatory, enhancing, or suppressing/ de-stroying. A compensatory relationship existswhen a change in the level of one resource isoffset by a change in the level of anotherresource. An enhancing relationship exists whenone resource magnifies the impact of anotherresource. A suppressing relationship exists whenthe presence of one resource diminishes theimpact of another.

Although not based on resource theory, thestrategic information technology (SIT) area ofresearch is a rich source of evidence that can beused to illustrate the importance of the resourcecomplementarity issue. In particular, a review ofresearch in this area clearly demonstrates thatpossession of superior IS resources is notinevitably linked to enhanced performance. Sincethe 1950s, the influence of IT on organizations(Ackoff 1967; Argyris 1971; Dearden 1972; Gorryand Scott-Morton 1971; Keen 1981; Leavitt andWhisler 1958), both positive and negative, hasbeen hotly debated. The study of informationtechnology as a driver of competitive advantagebegan to take hold in the 1980s (e.g., Bakos andTreacy 1986; McFarlan 1984). A number of casestudies in the mid- to late-1980s appeared to sup-



port the notion of information technology as adirect contributor of competitive advantage (e.g.,Brady 1986; Copeland and McKenney 1988; Shortand Ventaktaman 1992). However, more recentstudies have challenged these conclusions bysuggesting contingent effects of IT resources onperformance (e.g., Carroll and Larkin 1992; Ket-tinger et al. 1994; Powell and Dent-Micallef 1997).

Table 5 summarizes the SIT empirical literature todate that relates IT to performance or competitiveadvantage. Two general conclusions can bedrawn from this table. First, for those studiesfinding a direct relationship between IT andperformance, the vast majority have reported apositive effect (e.g., Banker and Kauffman 1991;Mahmood 1993). In contrast, few studies haveindicated null or negative effects (for exceptions,see Sager 1988; Venkatraman and Zaheer 1990;Warner 1987).

Second, a greater number of the SIT studiessummarized in Table 5 have found a contingenteffect of IT on performance than have found adirect effect. In some cases, SIT has been notedto have both a direct effect on performance aswell as an interactive effect with other constructs.In other cases, only the interactive effects aresignificant, particularly over the longer term. Fromthis, it seems clear that information systemsinfrequently contribute directly and solely to sus-tained firm performance. While information tech-nology may be essential for firms to compete, itconveys no particular sustainable advantage toone firm over its rivals. This sentiment is con-sistent with the strategic necessity hypothesisproposed by Clemons and Row (1991).

While the SIT research stream is not based onresource-based logic, its conclusions helpfullyinform the debate around resource comple-mentarity. From the preceding discussion, itseems clear that there will be conditions underwhich specific IS resources must interact withother resources (IS and/or non-IS) if they are toconfer competitive advantage on the firm, both inthe immediate and longer terms. However, atpresent the relevant set of moderating constructsis not well established; we suggest that this needs

to be a top priority of researchers interested inapplying the RBV in an IS context. Indeed, at themoment three competing propositions can bearticulated:

Proposition 4a: IS resources directlyinfluence competitive position andperformance.

Proposition 4b: IS resources influ-ence competitive position and perfor-mance both directly and indirectlythrough interactions with other con-structs (including other resources).

Proposition 4c: IS resources influ-ence competitive position and perfor-mance only indirectly through inter-actions with other constructs (in-cluding other resources).

Although only one of these propositions can becorrect, existing studies do not definitively supportone over the other two. The SIT literature as wellas a number of key resource-based studies withinIS appear to lend support for proposition 4b, whileresearchers are increasingly skeptical of pro-position 4a. The essential question that remainsunanswered�and that deserves researcherattention�is whether proposition 4b or 4c is morecorrect. Clemons and Row (1991) have argued infavor of the latter, but the empirical findings todate do not consistently support this perspective.It is our belief that RBV theory can be useful inhelping researchers to design future studiesaimed at resolving this ongoing debate.

Potential Moderators

Moderators that have the potential to affect therelationship between key IS resources and per-formance can be separated into organizationalfactors (i.e., those that operate within the firm) andenvironmental factors (i.e., those that operate out-side the firm�s boundaries). Top managementcommitment has been identified as a moderatingfactor within the organization. Similarly, environ



Table 5. Summary of the Effects of Strategic Information Technology on FirmPerformance

Outcome Effect Relevant Studies

Direct and Positive

Strategic information technology has adirect and positive effect on competitiveadvantage or performance

Banker and Kauffman (1991); Bharadwaj (2000); Clemonsand Weber (1990); Floyd and Woolridge (1990); Jelassi andFiggon (1994); Mahmood (1993); Mahmood and Mann(1993); Mahmood and Soon (1991); Roberts et al. (1990);Silverman (1999); Tavakolion (1989); Tyran et al. (1992);Yoo and Choi (1990)

Direct and Negative

Strategic information technology has anegative effect on competitiveadvantage or performance

Warner (1987)

No Effect

Strategic information technology has noimpact on competitive advantage orperformance

Sager (1988); Venkatraman and Zaheer (1990)

Contingent Effect

The effect of strategic informationtechnology on competitive advantage orperformance depends on otherconstructs

Banker and Kauffman (1988); Carroll and Larkin (1992);Clemons and Row (1988); Clemons and Row (1991);Copeland and McKenney (1988); Feeny and Ives (1990);Henderson and Sifonis (1988); Holland et al. (1992);Johnston and Carrico (1988); Kettinger et al. (1994);Kettinger et al. (1995); King et al. (1989); Lederer and Sethi(1988); Li and Ye (1999); Lindsey et al. (1990); Mann et al.(1991); Neo (1988); Powell and Dent-Micallef (1997); Reichand Benbasat (1990); Schwarzer (1995); Short andVenkatraman (1992)

mental turbulence, environmental munificence,and environmental complexity have been pro-posed as key moderating environmental factors.Each of these moderators is discussed in turnbelow.

Organizational Factors

Top Management Commitment to IS. Thisconstruct relates primarily to having commitmentfrom top management for IS initiatives (Powell and

Dent-Micallef 1997). In general, a top manage-ment team that promotes, supports, and guidesthe IS function is perceived to enhance the impactof IS resources on performance (Armstrong andSambamurthy 1999; Ross et al. 1996). Forexample, Neo (1988) found that the use of stra-tegic information technologies could lead tostrategic advantage subject to management visionand support. When such support is lacking, ISresources will have little effect on competitiveposition or performance, even when substantialinvestments are made to acquire or develop such



resources. Conversely, strong top managementsupport should facilitate a strong IS resource-performance link. Thus:

Proposition 5: Strong top manage-ment commitment to IS will interactwith IS resources to positively affectperformance.

Other Organizational Factors. Top manage-ment commitment has been clearly identified inthe IS literature as affecting the relationshipbetween IS resources and firm-level competitiveadvantage. However, there are other factors thatmay also moderate this relationship in specificcontexts. For example, there is some evidencethat organizational structure affects the role of ISresources within a firm (Fielder et al. 1996; Leifer1988; Sambamurthy and Zmud 1999). Corporateculture, particularly as it relates to the level ofinnovation within a firm, has been shown to influ-ence the effectiveness of information systemadoption and use (Barley 1990; Orlikowski 1996).Other factors such as firm size, location, andindustry may also influence how informationsystems resources affect firm performance andcompetitive advantage. The extent to which theseor other factors play a role in the IS resource-firmperformance relationship could become a subjectof future research.

Environmental Factors

The relationship between IS resources and firmperformance is affected not only by internalelements such as top management commitmentand corporate culture, but also by environmentalfactors. These factors reflect the uncertainty in anorganization�s operating environment. Drawing onthe work of Aldrich (1979), Child (1972), andPfeffer and Salancik (1978), Dess and Beard(1984) concluded that three dimensions of theenvironment contribute most to environmentaluncertainty and are thus most likely to consistentlyinfluence firm performance over time: environ-mental turbulence, munificence, and complexity.

Environmental Turbulence. In turbulent, fastchanging environments, different assets andcapabilities than those needed in more stableenvironments are required to achieve superiorperformance (Eisenhardt and Martin 2000; Teeceet al. 1997; Volberda 1996). In a relatively stablebusiness environment, the bulk of management�seffort is put toward creating competitive advantagefor the firm. Because the environment in this casechanges slowly, any advantage achieved by a firmis likely to be sustained over an extended periodof time (Miller and Shamsie 1996). By contrast, ina turbulent environment, many advantages areshort-lived as competitive and environmentalpressures quickly undermine any resource valueor heterogeneity (Foss 1998). The ability to stayon top of business trends and to quickly respondto changing market needs is critical for superiorfirm performance in such environments.

Firms faced with more stable environments havea tendency to emphasize static efficiency at theexpense of dynamic efficiency (Ghemawat andCosta 1993). Such firms prefer to exploit existingknowledge and capabilities rather than explorenew possibilities (Leonard-Barton 1992; Levinthaland March 1993; Levitt and March 1988). Ingeneral, these will be inside-out (i.e., IT tech-nology skills, IT development, cost efficiency, ISinfrastructure) rather than outside-in or spanningresources. Thus, in more stable environments,inside-out resources will be emphasized and be astronger determinant than outside-in or spanningresources of superior firm performance.

Proposition 6a: The re la t ionshipbetween inside-out resources andperformance will be stronger for firmsin stable business environments thanfor firms in turbulent business en-vironments; but

Proposition 6b: The re la t ionsh ipbetween outside-in resources andperformance will be stronger for firmsin turbulent business environmentsthan for firms in stable businessenvironments; and



Proposition 6c: The relationshipbetween spanning resources andperformance will be stronger for firmsin turbulent business environmentsthan for firms in stable businessenvironments.

Environmental Munificence. Environmentalmunificence refers to the extent to which a busi-ness environment can support sustained growth(Dess and Beard 1984). Environments that aremature or shrinking are normally characterized bylow levels of munificence, whereas rapidly growingmarkets are typically associated with a highdegree of munificence. When munificence is low,stiff competition often exists that can adverselyaffect the attainment of organizational goals, oreven organizational survival (Toole 1994). In suchenvironments, firms frequently strive to maintainprofits by maximizing internal efficiencies. Inside-out IS resources such as cost effective IS opera-tions play a key role in affecting competitiveposition in these cases by reducing costs andstreamlining operations. In contrast, whileoutside-in and spanning IS resources can poten-tially support organizational goals by helping tomonitor changes in the external environment tocoordinate internal responses to such changes,the absence of munificence puts pressure onorganizations to reduce investments in outside-inand spanning resources. Furthermore, since lowmunificence environments tend to be relativelymature, firms may be tempted to assume a staticcompetitive picture and to focus more attention oninside-out capabilities that support improvementsin firm efficiency.

Markets that are munificent tend to supportorganizational growth despite imperfect firmstrategy. Such markets are relatively forgiving,with firms able to be competitive even when theydo not possess superior resources. From this itfollows that possession of superior inside-outcapabilities will be substantially less critical whenenvironmental munificence is high than when it islow. On the other hand, it is not clear how envi-ronmental munificence affects the relationshipsbetween both outside-in and spanning resources

and a firm�s competitive position. Thus, we onlypropose the following moderating effect forenvironmental munificence (although we believethat its effect on all three types of resourcesshould be studied empirically):

Proposition 7: The relationshipbetween inside-out resources andperformance will be stronger for firmsin low munificent environments thanfor firms in high munificent envi-ronments.

Environmental Complexity. Environmentalcomplexity refers to the heterogeneity and rangeof an industry and/or an organization�s activities(Child 1972). It can refer variously to the numberof inputs and outputs required for an organi-zation�s operations, the number and types ofsuppliers, consumers and competitors that itinteracts with, and so on. Complexity makes itmore difficult for firms to both identify andunderstand the key drivers of performance. Fromthe RBV perspective, such ambiguity makes itmore difficult for competing firms to identify thesecritical resources for potential imitation, acqui-sition, or substitution. Thus, under conditions ofhigh environmental complexity, the link betweenkey resources and superior performance will tendto be stronger and more enduring.

This effect is likely to be important for all threetypes of resources. Organizations operating inhighly complex environments must rely on efficientand effective systems to manage information andknowledge. When complexity is high, outside-inand spanning capabilities help the firm to absorbexternal information and coordinate its competitiveresponses, but inside-out IS capabilities will alsobe important. For example, a robust and flexibleIS infrastructure coupled with strong IS technicalskills may help a firm manage its operations moreefficiently in the face of environmental complexity.Thus:

Proposition 8a: The relationshipbetween inside-out resources andperformance will be stronger for firms



in high complexity environments thanfor firms in low complexity environ-ments; and

Proposition 8b: The relationshipbetween outside-in resources andperformance will be stronger for firmsin high complexity environments thanfor firms in low complexity environ-ments; and

Proposition 8c: The relationshipbetween spanning resources andperformance will be strong for firmsin high complexity environments thanfor firms in low complexity environ-ments.

Using the RBV inIS Research

We believe that application of the RBV to IScontexts has the potential to identify key drivers ofsuperior business performance. At the same time,use of the RBV introduces new considerationsthat must be dealt with by researchers. In thissection, we discuss three such considerations:choice of an appropriate level of resource speci-ficity, choice of an outcome construct, andmodifying the RBV framework over time byintroducing dynamic elements into it.

Resource Specificity

How broadly or narrowly a resource is defined canhave a substantial effect on its usefulness (Pen-rose 1959). However, on a practical basis, it isnot always clear to researchers what level ofspecificity the problem requires. For example, aresource such as the �ability to program C++� is agood deal more precise that the �ability to developsoftware� or �IS technical skills.� Examples ofboth broadly and narrowly defined resources existin the IS literature. For example, in order to

denote the ability to effective deal with outsideparties, Bharadwaj et al. (1998) used oneresource named manage external linkages, whileFeeny and Willcocks (1998) made a finerdistinction to include contract facilitation, informedbuying, vendor development, and contractmonitoring all as separate resources. A singleresource is frequently used to denote the level ofphysical IT infrastructure within a firm (Bharadwajet al. 1988; Ross et al. 1996). By contrast,Benjamin and Levinson (1993) divided ITinfrastructure into two separate resources: hardinfrastructure and soft infrastructure; and Lopesand Galletta (1997) further divided hard infra-structure into storage and transmission assets andinformation processing capability.

Broadly defined resources have the advantage ofbeing readily generalized beyond a specificresearch situation, but can lose their explanatoryvalue when applied to overly narrow or specificsituations. Their utility comes at a more generallevel of abstraction. For example, Miller andShamsie (1996) found that, in unstable environ-ments, property-based assets such as physicalinfrastructure were less likely to positively affectfinancial performance than more specificallydefined knowledge-based assets such as skillsand know-how. Broad definitions explore whatresource characteristics are important, and thusmay be applicable across multiple resources andresearch settings. At the same time, however,reliance on a high level of abstraction mayinappropriately combine distinct resources undera single label, thereby weakening the researcher�sability to uncover the true relationships that existbetween IS resources and key outcomes.

Resources can also be defined narrowly.Typically, these studies define one or tworesources in a particular context and explore therelationship between those resources and arelevant dependent variable. For example,Zaheer and Zaheer (1997) explored the linkbetween alertness and responsiveness, andmarket influence in global currency markets.Others have used general resource cate-gorizations at the conceptual level, but study-



specific operationalizations in the data collectionstage (e.g., Henderson and Cockburn 1994;Powell and Dent-Micallef 1996). Studies of thistype are useful within the limited scope of theresearch context, but there is often little a priorireason to expect that results from these studiescan be generalized more broadly. In a study ofthe pharmaceutical industry, Silverman (1999)found that the RBV was validated with very narrowresource definitions. Narrow definitions help tofine-tune our understanding of specific resourcesand their effect on competitive position andperformance in given settings. The dangers ofusing resources that are overly narrow in theirdefinitions are twofold: any resultant findings arelikely to be difficult to generalize to new contexts,and the list of potentially relevant resources canquickly become prohibitively lengthy for practicalresearch use.

Most IS researchers making use of the RBV havetried to strike a balance between these twoextremes (e.g., see Bharadwaj et al. 1998;Marchand et al. 2000; van der Heijden 2000). Theappropriate level of resource specificity, in fact,will vary according to the objectives of the study.For research that examines specific technologiesor specific industries, a set of more narrowlydefined resources is appropriate. By contrast,wider and more inclusive definitions are moreuseful for research employing a wide scope. As ageneral rule, we recommend that researchers erron the side of generalizability. Narrow definitionsof IS resources may suffer from reduced rele-vance as technologies, systems, and skillsbecome obsolete over time. As tools to facilitatecross-disciplinary study and the development of acumulative research tradition, narrow definitionsare less effective than those that are more generaland inclusive. Thus, programming skills or IStechnical skills may be preferable as IS resourcesto Java programming skills or object-orientedprogramming skills. The resources describedearlier in this paper are all mid-level constructsthat are reasonably specific while also permittingan acceptable level of generalizability acrossstudies.

Choice of an Outcome Construct

The dependent variable in IS research has beena point of significant debate in the field (e.g.,Delone and McLean 1992; Seddon 1997). Manydependent variables are used in IS research, andit is often difficult to relate one set of findings toanother. In contrast, IS work using the RBV hastended to be more focused, since the primaryoutcome of interest is sustained competitiveadvantage (SCA). As noted earlier, Barney (1991,p. 102) originally suggested that SCA �continuesto exist after efforts to duplicate that advantagehave ceased,� a definition that assumes eventualequilibrium. However, more recently researchershave argued that in many industries long-runequilibria simply do not exist (e.g., Barney 2001;Dickson 1992; Hunt and Morgan 1995). Further-more, SCA has proved to be very difficult tooperationalize, and researchers employing theRBV have resorted to looking instead at relateddependent constructs such as above-averageperformance in the long run (Porter 1985; Wigginsand Ruefli 2002).

Given the preceding discussion, we suggest thatany dependent variable used in an RBV-basedstudy needs to exhibit three key attributes: (1) itshould provide an assessment of performance,(2) it should incorporate a competitive assessmentelement, and (3) it should address the notion ofperformance over time. Return on investment(ROI) and assets (ROA), sales, and market shareare commonly used performance metrics in thestrategic management literature (e.g., Bharadwaj2000; Robins and Wiersema 1995). Yet, limitingRBV research to firm-level dependent variablesmay be overly restrictive, particularly in the caseof IS resources that affect the firm at many levels.Firm performance is affected by a multitude offactors; thus, use of a single firm-level dependentvariable may not capture this broader context (Rayet al. 2001). The strategic information technologyresearch stream has found strong evidence for anindirect role for IT in firm performance. The basiclogic is that IT affects other resources or pro-cesses which, in turn, lead to competitiveadvantage. Given this role, it is appropriate to



measure the effect IS resources have on otherresources or processes. Therefore, ISresearchers may find it particularly beneficial touse intermediate-level dependent variables at thebusiness process, department, or project level(e.g., Ray et al. 2001).

Second, there should be some sense ofcomparativeness, assessing performance relativeto that enjoyed by key competitors. Taken inisolation, a firm�s performance, whether strong orweak, contains only limited meaning. Forexample, a firm may enjoy strong share growth,return on investment, and profit but actually lagkey competitors on those measures. Conversely,traditional performance metrics may seemdisappointing until compared to an industryaverage that is significantly worse. Unfortunately,to date this aspect of firm performance is the onethat has been least emphasized by IS researchersusing the RBV. Thus, we encourage researchersto take fuller advantage of competitive assess-ment tools when measuring firm performance soas to provide a richer and more complete accountof how the firm�s resources influence its compe-titive position.

Finally, any performance advantage must besustained over time. On a practical level, thismeans that some effort must be made to track thedependent variable of interest over time to avoiddrawing invalid conclusions about the durabilityand sustainability of firm resources, an importantaspect of the resource-based view (Kettinger et al.1994). There is little doubt that some competitiveadvantages endure for extended periods. Forexample, Wiggins and Ruefli (2002) estimatedthat between 2 and 5 percent of the firms theystudied had enjoyed at least 10 years of com-petitive superiority. Some recent IS studies usingthe RBV have attempted to incorporate timeelements into their design and analysis. Forexample, Bharadwaj (2000) tracked ROA andROS over a 4 year period and Jarvenpaa andLeidner (1998) conducted interviews over a 2 yearperiod. We suggest that this should be animportant consideration for all future IS studiesthat make use of the RBV.

A key question that remains is when does acompetitive advantage become long term orsustained? The logic of the RBV implies that afirm�s competitive advantage will be sustained foras long as its resources are valuable and itscompetitors fail to acquire, imitate, or findsubstitutes for them. Beyond this central insight,the issue of the length of sustainability has beensidestepped by much of the mainstream RBVliterature. There is a good reason for this. Lengthof sustainability is contingent on a wide variety offactors. Barney (1991) hints at some of thesefactors. Social complexity and causal ambiguitymake it difficult for competitors to imitateresources as the exact process by which thecompetitive advantage is achieved is not alwaysclear. Environmental turbulence and complexitymay also affect the extent to which a competitiveadvantage is sustained. For example, Miller andShamsie (1996) note that in times of relativestability an advantage may be sustained for a longperiod of time, but that during turbulent periodsany advantages may be short-lived. Eisenhardtand Martin (2000) go even further, arguing that invery turbulent environments sustainability cannotbe achieved without constant innovation.

When examining information technology-basedstrategic advantages, Hidding (2001) suggestedthat product or service type is a primary factor indetermining how long an advantage can besustained. Long cycle products, typically charac-terized by high consumer lock-in, may be able tosustain advantages for 7 to 10 years or more.Examples of long-cycle products include localphone services, airport hubs, and complex infor-mation technology products like operating sys-tems. Inside-out IS capabilities like cost effectiveoperations and IS infrastructure can support longcycle products by enhancing operating effi-ciencies. Standard cycle products, characterizedby high-volumes and low-margins, are able tosustain advantages for 4 to 6 years. Standard-cycle products can be supported by all of the ISresources. Short-cycle products, with very shortproduction cycles, are able to sustain advantagesfor less than 3 years. Examples of short-cycleproducts include microprocessors and many



information products. By supporting organiza-tional change and renewal, outside-in andspanning capabilities are able to support shortcycle products.

Information systems resources such as thosedescribed earlier in this review can be employedby firms of any size, in any industry, producing anytype of product or service. Thus, too many con-tingencies exist to generalize about how long acompetitive advantage may last. It is merelypossible to state that IS resources can support�at least potentially�both short-term and long-termadvantages.

Dynamic Resources

A growing body of literature seeks to moreformally incorporate the competitive environmentinto resource-based thinking. One focus of thisresearch has been on the distinction betweenstable and dynamic environments. Someresources are more useful to the firm in relativelystable environments while others are more usefulin dynamic, unstable, or volatile environments(Miller and Shamsie 1996). The former have beendubbed core resources, while the latter have beencalled dynamic resources (Eisenhardt and Martin2000; Teece et al. 1997).

The distinction between these two resource typesrepresents an extension of the traditional staticRBV conceptualization. The resource-based viewhas been criticized for ignoring factors sur-rounding resources, instead assuming that theysimply exist (Stinchcombe 2000). Considerationssuch as how resources are developed, how theyare integrated within the firm, and how they arereleased have been under-explored in the litera-ture. The mechanisms underlying how exactly keyresources benefit the firm are also poorly specifiedin the RBV. The concept of dynamic resourcesattempts to bridge these gaps by adopting aprocess approach: by acting as a buffer betweencore resources and the changing businessenvironment, dynamic resources help a firm adjustits resource mix and thereby maintain the sustain-

ability of the firm�s competitive advantage, whichotherwise might be quickly eroded (Eisenhardtand Martin 2000; Teece et al. 1997; Volberba1996).

Although IS researchers using the RBV have nottypically looked at dynamic resources, a study byJarvenpaa and Leidner (1998) suggests that ISresources may take on many of the attributes ofdynamic resources, and thus may be particularlyuseful to firms operating in rapidly changingenvironments. Thus, even if IS resources do notdirectly lead the firm to a position of superior SCA,they may nonetheless be critical to the firm�slonger-term competitiveness in unstable environ-ments if they help it to develop, add, integrate,and release other key resources over time. Thedynamic resources perspective provides anavenue for renewed relevance of IS resourcesbeyond their traditional interpretation within thecontext of the RBV. This suggests that IS studiesof resources (both IS and non-IS) will beparticularly informative when conducted in highlyturbulent business environments.

Summary and Conclusions

The resource-based view of the firm is a robusttheory that has received wide acceptance in othermanagement fields. While it has been used on anumber of occasions in IS research, there hasbeen no comprehensive effort to describe ordefend its use in an IS context. The purpose ofthis paper has been to provide an overview of theRBV for those who wish to understand and usethe theory in IS research.

The resource-based view of the firm is a usefultool for researchers to understand if, and how,particular parts of the firm affect the firm at large.Many parts have been extensively researched.For example, brands, patents, product develop-ment practices, knowledge management capa-bilities, and the like have been extensivelyresearched in the management disciplines. Otherparts are less well understood. As we havesuggested here, the RBV provides a way for IS



researchers to understand the role of informationsystem within the firm. Once the role of ISresources has been explored and defined, it canbe compared on equal terms with the roles playedby other firm resources to eventually form anintegrated understanding of long-term firm com-petitiveness.

The resource-based view makes a usefuldistinction between information technology andinformation systems. The former is asset-based,while the latter comprises a mixture of assets andcapabilities formed around the productive use ofinformation technology. It is our contention thatthe RBV, through its focus on attributes and itsrecognition of the importance of resource com-plementarity, will uncover an enhanced role forinformation systems in sustained firm compe-titiveness. And it is our hope that the discussions,issues, and ideas set forth in the paper willstimulate interest and research incorporating theRBV in the field of information systems.

Acknowledgements

Both authors gratefully acknowledge the financialsupport of the Schulich School of Business, theRichard Ivey School of Business, the KatzGraduate School of Business, and the SocialSciences and Humanities Research Council ofCanada. Insightful comments on earlier versionsof the paper were received from Abhijit Ghopal,Chris Higgins, Sid Huff, Derrick Neufeld, JohnPrescott and Gautam Ray. We would particularlylike to thank Jay Barney and Christine Oliver fortheir substantial contribution and support. Finally,this paper benefitted greatly from the diligent andtireless efforts of the senior editor, Jane Webster,and three anonymous reviewers.

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About the Authors

Michael Wade is an Assistant Professor ofOperations Management and Information Systemsat the Schulich School of Business, YorkUniversity, Toronto. He received a Ph.D. inManagement Information Systems from the Uni-versity of Western Ontario in 2002. His currentresearch focuses on the strategic use of infor-mation systems in turbulent environments.

John Hulland is Associate Professor of Marketingat the Katz School of Business, University ofPittsburgh. He received a Ph.D. in Marketing fromMassachusetts Institute of Technology in 1990,and has published his research in a variety ofjournals, including the Journal of Marketing,Marketing Science, Strategic Management Jour-nal, Organization Science, and Information Sys-tems Research. His current interests centeraround the resource-based view of the firm anduse of the partial least squares technique inapplied management settings.



Appendix

Resource-Based Studies in IS Research

Source/Title Paper Type FindingsComments on the

Use of the RBVSustaining it Advantage:The Role of StructuralDifferences (Clemonsand Row 1991)

Conceptual Argues that IT cannot, in andof itself, lead to SCA, but mayassist other resources in doingso. Referred to as the stra-tegic necessity hypothesis.

Very good concep-tual work. Onlyloosely based on theRBV.

Information Technologyand Sustained Compe-titive Advantage: AResource-basedAnalysis Advantage(Mata et al. 1995)

Conceptual Considers whether four ISresources lead to SCA underthe resource-based view. Theresources are access tocapital, proprietary technology,technical IT skills, and mana-gerial IT skills. Using logicalRBV arguments, finds thatmanagerial IT skills are theonly resource that leads toSCA.

Good conceptualdevelopment. Logical rather thanempirical argumentsmade for appro-priateness ofresources. Resourcelist not justified.

Organizational Learningand Core CapabilitiesDevelopment: The Roleof it (Andreu and Ciborra1996)

Conceptual Looks at the role IT plays indeveloping capabilities andcompetencies within the firm. Describes the role of IT withinthe context of organizationallearning.

RBV not measured.

Develop Long-TermCompetitivenessThrough IT Assets (Rosset al. 1996)

Conceptual Defines three IT assets: IThuman resources asset,technology asset, andrelationship asset. Theseassets in combination with ITprocesses lead to SCA.

Loosely based on theRBV. RBV notactually measured. No empirical work.

Information Technologyas Competitive Advan-tage: The Role ofHuman, Business, andTechnology Resources(Powell and Dent-Micallef 1997)

Empirical(retail industrysurvey)

Supports the strategic neces-sity hypothesis. Finds that ITalone cannot produce SCA,but that IT can leverage otherintangible, complementaryhuman and businessresources to gain SCA.

Strong empiricalcontent althoughRBV not measureddirectly.



Catching the Wave:Alertness, Responsive-ness, and MarketInfluence in GlobalElectronic Networks(Zaheer and Zaheer1997)

Empirical Uses an RBV framework toshow that alertness andresponsiveness lead to marketinfluence in the global financeindustry.

Strong empiricalwork. SCA is not themain dependentvariable. RBV notmeasured.

Resource-Based Theoryand a Structural Per-spective of StrategyApplied to the Provisionof Internet Services(Lopes and Galletta1997)

Conceptual Uses RBV and structural per-spective of strategy to developa series of propositions aboutonline information services. Divides resources into knowl-edge-based and property-based types.

Draws on Miller andShamsie (1996) forconceptualgrounding. Hypo-thesizes that knowl-edge-based re-sources are morevaluable in onlinesetting. No testing ofhypotheses.

IT Capabilities: Theo-retical Perspectives andEmpirical Operationali-zation (Bharadwaj et al.1998)

Empirical Describes the formation of anIT capability construct with sixelements: IT businesspartnerships, external ITlinkages, business IT strategicthinking, IT business processintegration, IT management,and IT infrastructure.

Does not test the linkbetween capabilityconstruct andperformance or SCA.

Core IS Capabilities forExploiting InformationTechnology (Feeny andWillcocks 1998)

Conceptual Nine core IS capabilities areidentified which are organizedinto four categories: businessand IT vision, delivery of ISservices, design of IT archi-tecture, and core IS capabi-lities. Capabilities are mappedonto skills and values.

Interesting con-ceptual work. Practitioner focus.Not directly linked toRBV theory. Non-empirical.

An Information Companyin Mexico: Extending theRBV to a DevelopingCountry Context(Jarvenpaa and Leidner1998)

Empirical(case study)

Mixed support for the RBVfound in emerging countrycontext.

RBV not measureddirectly. Resourceattributes considered.

Information TechnologyAssimilation in Forms: The Influence of SeniorLeadership and IT Infra-structures (Armstrongand Sambamurthy 1999)

Empirical(survey)

Looks at the influences ofquality of senior leadership,sophistication of IT infrastruc-tures and organizational sizeon IT assimilation.

Conceptual modelonly loosely basedon the RBV. RBVnot actually mea-sured.



Strategic Context andPatterns of IT Infrastruc-ture Capability (Broad-bent, Weill and Neo1999)

Empirical(survey)

More extensive IT infrastruc-ture capability found in firmswhere products changedquickly and the implemen-tation of long-term strategieswas tracked over time.

Resource View TheoryAnalysis of SAP as aSource of CompetitiveAdvantage for Firms(Pereira 1999)

Conceptual Explores whether SAP couldbe considered a determinantof SCA in the RBV sense. Determines that it could, ifmanaged properly.

Non-empirical. Loosely based on theRBV. Some attri-butes justified withlogical arguments.

Building CompetitiveAdvantage ThroughInformation Systems: The OrganizationalInformation Quotient(Service and Maddux1999)

Conceptual Develops a series of successcomponents through which ITcan lead to SCA. Evaluationof these components leads toan organizational informationquotient.

RBV logic indirectlyapplied.

A Resource-Based Per-spective on InformationTechnology Capabilityand Firm TechnologyCapability and FirmPerformance: AnEmpirical Investigation(Bharadwaj 2000)

Empirical(archival data,matchedpairs)

Performance of firms whichare rated to have superior ITcapability in magazine surveycompared to firms which donot. Performance of superiorIT capability firms found to behigher.

Strong conceptualdevelopment of ITcapability construct. Construct measuresnot used, however, inempirical analysis.

Capabilities, BusinessProcesses, and Compe-titive Advantage: TheImpact of InformationTechnology on CustomerSatisfaction in the NorthAmerican InsuranceIndustry (Ray et al.2001)

Empirical(survey)

Study finds that managerial ITknowledge and service climatepositively affect customerservice performance.

Supportive of theRBV. Argues thatRBV works at thelevel of businessprocesses as well asat the firm level.

Information Technologyand Competitive Advan-tage: A ProcessOriented Assessment(Ray et al. 2001)

Empirical(survey)

Study finds that managerial ITknowledge leads to enhancedcustomer service performance but flexibility of IT infrastruc-ture, IT technical skills, and ITapplications do not.

Supportive of theRBV.

Sustaining Strategic itAdvantage in the Infor-mation Age: How Stra-tegy Paradigms Differ bySpeed (Hidding 2001)

Conceptual Argues for a strategic modelthat differentiates among ITtypes. IS strategy shoulddepend on the length of theproduct cycle (ecologies).

Attempts to extendthe RBV to make itmore useful in quan-tifying sustainabilityof competitive advan-tage.



Information Technology,Core Competencies, andSustained CompetitiveAdvantage (Byrd 2001)

Conceptual Argues that IT infrastructureflexibility yields sustainedcompetitive advantage as anenabler of firm-specific corecompetencies.

Loosely based onRBV arguments.

Beyond Sabre: AnEmpirical Test ofExpertise Exploitation inElectronic Channels(Christianse andVenkatraman 2002)

Empirical Finds that RBV is moreeffective than TransactionCost Economics at explainingthe creation of expertise. Finds technology lock in noteffective.

Constructs notexplicitly opera-tionalized asresources.

Membership Size, Com-munication Activity,Sustainability: AResource-Based Modelof Online SocialStructures (Butler 2001)

Empirical Uses RBV to look at onlinesocial structures. Findscomplex relationships betweenmembership size, communica-tion activity, and online struc-ture sustainability.

Uses resource-basedlogic to frame con-ceptual arguments.Develops notion ofsustainability. Doesnot operationalizeresources usingresource attributes.

Impact of InformationSystems Resources andCapabilities on FirmPerformance: AResource-Based Per-spective (Ravichandranand Lertwongsatien2002)

Empirical Examines complementarityfrom a resource-basedperspective. Finds preliminarysupport for the relationshipbetween IT and non-IT firmcapabilities in achievingsuperior firm performance.

IT capability mea-sures (unspecified)used in analysis. Link made to firmsperformance, notSCA.

Diversification andPerformance ofJapanese IT Subsi-diaries: A Resource-Based View (Wade andGravill 2003)

Empirical Finds that Japanese IT firmsthat diversify internationallybased on resource strengthsoutperform those withunrelated portfolios.

Uses the RBV as aguiding conceptualframework. Does notoperationalizeresources or testresource attributesdirectly.

Issues in Linking Infor-mation TechnologyCapability to Firm Per-formance (Santhanamand Hartono 2003)

Empirical Extends and confirmsBharadwaj (2000). Finds thatfirms with superior ITcapability also exhibit superiorfirm performance.

IT capability notoperationalized,resource attributesnot used in analysis. Multidimensionaldependent constructused. Calls oncontinued use ofRBV in IS research.

Documents

Wade & HullandReview