Resource-based competition: three schools of thought and thirteen criticisms

Purpose - The field of research on resource-based competition is full of nuanced terminology and misunderstandings. This has led to confusion, and thus the authors offer a critical review, which provides a structure and clarity to this subject. The paper aims to discuss these issues. Design/methodology/approach - This analysis structures the literature on resources, capabilities, and competences into three distinct schools of thought: the resource-based view (RBV) of the firm, the rational-equilibrium school; the dynamic capability-based view of the firm, the behavioural-evolutionary school; and the competence-based view of the firm, the social constructionist school. Findings - The authors uncover 13 criticisms of the most widely adopted theoretical framework of the RBV of the firm - Valuable-Rare-Imperfectly imitable-Organisation (VRIO). Research limitations/implications - The misinterpretation and neglect of the classic scholarly work may help to explain why the VRIO framework has been elevated from a view to a theory and why it has received so much attention. Practical implications - The authors show how the relative ease of measuring resources as compared to (dynamic) capabilities and (core) competencies has helped raise the profile of RBV. Originality/value - This analysis contributes to management research by illustrating the deviation among the three schools of thought; the authors show how this has contributed to wide terminological confusion and offer a structure to help researchers situate their work within the relevant school of thought.