Exam 5: Analyzing Resources and Capabilities

For most organizations, geographical location should be regarded as:

Superior capability need to be based upon superior resources.

The more a capability is based on complex networks of interacting organizational routines, the more strategically important it is because it is difficult for rivals to replicate. ,

The difficulties faced by Eastman Kodak, Smith Corona.and Olivetti in adapting to radical technological change within their markets point to:

Porter's value chain is useful tool for understanding the sequence of activities that a firm performs but is of limited value in mapping a firm's resources and capabilities.

The "resource-based view" emphasizes that a firm's strategy needs to be environmentally sustainable.

The profits arising from market power are called monopoly rents, whereas those arising from superior resources are Ricardian rents

The framework of resource and capability analysis does not generate strategy options for a firm, it is a tool for helping the firm to identify its potential for competitive advantage.

The resource-based approach to strategy implies that strategic management is more about exploiting distinctive differences rather than trying to emulate other companies.

Corporate balance sheets do not include human resources (since these are not owned by the firm), apart from this major exception, balance sheets offer a comprehensive picture of a firm's resources.

Strategy is concerned with matching a firm's resources and capabilities to the opportunities emerging from its environment.

The difference between a resource and a capability is:

Organizational culture is an important resource for most business enterprises because:

For the purposes of strategy formulation, a firm needs to consider only those resources and capabilities that are strategically unimportant.Any strengths in what appear to be strategically unimportant resources and capabilities ("superfluous strengths") are best ignored.

The ability of established firms to reconfigure their resources and capabilities around new technologies means that, typically, disruptive technologies are pioneered by established rather than new firms.

When a firm identifies a resource or capability that is a key weakness, the strategic response should be to upgrade that resource or capability through investment.

If an organization possesses strengths in a resource or capability that bears little relationship to the industry's key success factors it should:

Organizational capabilities are built upon an organization's processes and routines.

Benchmarking is seldom an effective means of assessing the strength of a firm's resources and capabilities relative to those of competitors.

The trend among companies to "hire for attitude; train for skills" is the result of research identifying that the importance of psychological and social aptitudes in determining superior work performance.