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Introduction
Understanding the relationship between the resources they control and the performance of the firm is one of the critical strategic analysis tasks for managers. In recent years, arguably the dominant theoretical framework underpinning this relationship has been the resource-based view (RBV) of the firm(Wernerfelt, 1984; Barney, 1991). Recognition of resource heterogeneity and immobility between firms distinguishes this view from the simple notion that firms have strengths and weaknesses. From the resource-based literature, the value-rarity-imitability-organisation (VRIO) technique (Barney, 2002) has become widely advocated for assessing the extent to which a firm's resources meet the criteria for sustained competitive advantage (see e.g. Johnson et al. , 2011). The strategy field has debated whether the RBV is a useful perspective for strategic management research (Priem and Butler, 2001; Barney, 2001; Lockett et al. , 2009; Kraaijenbrink et al. , 2010). It has seldom debated whether the RBV is useful in analysis of a firm's resources, yet the inclusion of VRIO or similar representations in most strategy texts and courses (Arend and Lévesque, 2010) implies that it ought to be.
Although it has diffused widely in the literature, it is not clear that VRIO has had as much impact on managerial practice. Surveys of managers tend to refer instead to core competencies or competence analysis (Rigby and Bilodeau, 2007; Hodgkinson et al. , 2006), and an interview-based study (Knott, 2008) suggests that few of these cases involve formal analysis. Teaching experience suggests that there are practical difficulties in translating RBV theory into application guidelines and in linking analysis and action.
In response to these apparent shortcomings, this paper investigates the VRIO technique's merits and limitations when non-specialist practitioners use it to analyse a firm's resources. The paper presents a study using experimental method to compare analysis that uses VRIO with analysis that does not. It concludes by discussing implications both for theory and for using VRIO in management practice.
Tools and methods in strategy action
In order to evaluate the practical role of VRIO, it is necessary to articulate what the strategy-as-practice and strategy cognition literatures tell us about the use of strategy tools in full organisational context. It is well established that managers generally do not use strategy methods as strict templates, or even usually perform formal...