'Reductionistic' and 'Holistic' Views of Resource-Based Theory: A Review of the Literature

Mona Rashidirad, Ebrahim Soltani, Hamid Salimian
2015 Strategic Change  
Main message: In contrast to reductionisitc approach, a holistic approach to RBT has the ability to address the complex interrelationships among multiple organizational characteristics (e.g., resources and capabilities), competitive strategies and performance. Key points:  The predominant reductionisitic approach may not be appropriate to capture the reality of a firm's performance regarding their resources, capabilities and strategies.  Concurrence of RBT constructs along with competitive
more » ... ategies is not universal, but a contingent one, which may vary in different contexts.  Further research is required to understand the performance impact of the alignment of dynamic capabilities aligned with a firm's resources and competitive strategies. Abstract Resource-Based Theory (RBT) has become an acceptable theory to describe the importance of resources and capabilities in generating high performance. Our literature review shows that there are two approaches to RBT: reductionistic and holistic. Adopting a reductionistic approach has led to an inconsistency in the findings about the relationship between RBT constructs (i.e. resources and capabilities), and their impact on performance. This paper proposes that a holistic approach to RBT has a greater power to explain the complex interrelationships between dynamic capabilities, firm's resources and competitive strategies. 2 J.E.L classification: L10, L25, L190 3 Through a critical review on both views, this study highlights areas in which future research is needed for greater understanding of the co-impact of a firm's internal factors and competitive strategies on performance.
doi:10.1002/jsc.2037 fatcat:mu73oqwavjbjvbe4ateucqcipu