Resource-Based View

Definition

Resource-Based View (RBV) provides a strategic value assessment of information systems through the perspective of capabilities constructed by resources and competence. Thus, being of relevance to decision making in management. According to Barney (1991), organizations possess resources to create competitive advantages and enhance performance. His VRIO framework asserts organization's ability to possess valuable (V), rare (R), imitable (I), and organized (O) resources and capabilities simultaneously will determine performance (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

Information System (IS) or Information technology (IT) resources are composed of tangible assets such as infrastructure, employees, skills, commitment, and intangible assets such as organizational culture,

management skills, competencies, and experience. Exploited IS resources may transform into capabilities by repeating actions to create products for a given environment to create a competitive advantage (Aydiner,

Tatoglu, Bayraktar, Zaim, 2019).

Resources

RBV devises a framework for how organizations orchestrate resources and capabilities to compete in a market through strategies that permit expansion and diversification. Barney (1991) asserted these organizational strategies to include physical, human, and organizational capital. Moreover, according to Teece (1997), organizations may construct and integrate resources and competencies to create capabilities and configure them to attain competitive advantages. Makadok (2001) distinguished resources from capabilities. The latter embeds firm-specific organizational behavior instead of resources that may be acquired (Khayer, Bao, Nguyen, 2020).

Capabilities

Resource selection pertains to how organizations exploit superior knowledge to construct capabilities beneficial to be sources of competitive advantage. Capability building pertains to how organizations integrate, build and reconfigure resources to generate idiosyncratic competencies that weave into the company's fabric for superior value. Lower order capabilities are firm-specific competencies that enable basic operational capabilities. These are fundamental to function as an organization. The edge occurs when ordinary capabilities are developed into dynamic capabilities implying integrating and reconfiguring tangible and intangible resources to improve performance (Kathuria, Mann, Khuntia, Saldanha, Kauffman, 2018).

Capabilities in the information technology context are frequent in the literature. Managerial IT capability relates to business knowledge and technical skills required to grasp the potential of emerging technologies and leverage technology to create strategic alignment with organizational objectives. Technical IT

capabilities encompass tangible assets such as infrastructures and intangible assets such as expertise, problem-solving processes, and collaboration strategies. Relational IT capabilities imply establishing a fruitful long-term relationship with a stakeholder, such as using trust as a governance mechanism to safeguard a relationship. Such capabilities are highly dependent on management. IT business processes

integration relates to exploiting existing organizational processes within the business and IT to optimize organizational effectiveness and efficiency (Khayer, Bao, Nguyen, 2020). From an RBV perspective, these capabilities enable organizations to position themselves better than adversaries due to the specificity and non-transferability features of these heterogeneous capabilities and assets. Hence, impacting performance and attaining sustainable competitive advantage.

Moreover, managerial IT capabilities evolve instrumentally through history and vary across organizations.

Construct such as knowledge, experience, relationships, trust, and interpersonal communication demands ample time to reach optimal and effective synchronized behavior. In addition, IT capabilities depend on various structural mechanisms and, consequently, the value derived from complicated interrelationships (Khayer, Bao, Nguyen, 2020).

Another dimension of IS capabilities evoked for improved organizational performance are infrastructure, human resources, and administrative IS capabilities (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

Infrastructure IS capability entails assembling technological structures necessary for business applications and information management vital to the organization, responding to external stimuli, and executing business initiatives. Proper infrastructure facilitates knowledge transfer by enabling standardization and automation of organizational processes, coding tacit knowledge into explicit knowledge. Moreover, flexibility in the infrastructure provides a system easily accessible and interoperable with other systems. Thus, all organizational departments can adapt and integrate the infrastructure according to business objectives.

Therefore organizations who transform basic IT into IS infrastructure capability create competitive value (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

IS human resources capability enables proper utilization of technical capacity efficiently. It implies access to the right expertise, understanding the organizational culture and routines, and technological competencies.

Appropriate human resources enable enhanced responsiveness, communication, and knowledge integration.

Moreover, skilled human resources are better suited to combine IS and business processes, communicate with other departments more effectively, develop more cost-efficient applications, and proactively anticipate business and technological value-creating opportunities. In addition, according to Bharadwaj (2000),

organizations that empower teams with autonomy, collaboration skills, and best practices enable IS employees to leverage their skills and deliver assets of the socio-technical networks in the organization effectively (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

IS administrative capability entails developing processes to sense, gather, organize, and propagate

information across the organization. It involves instigating anticipated information behavior and values in employees. Leadership ensures performance monitoring, human resource management, planning, asset management, and resource allocation transform into such capabilities.

IS capabilities may engender value creation with adequate strategic information technology alignment and governance. According to Chen & Whu (2011), administrative capability help assess emerging technologies, organizational needs and coordinate with external parties accordingly. Effective administration reduces organizational redundancy and materializes strategies into operational initiatives (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

IS capabilities enable better decision-making, especially in the face of uncertainty. According to Huber (1984), technology enables organizations to spend less time on information retrieving, increasing

competitiveness by making decisions more timely. Moreover, it decentralizes the organization during the decision-making process. It makes it easier to locate anomalies or opportunities for economies of scale through increased speed and quality across the organization. Making business processes more efficient spans organizational borders by increasing customer-centric operations designs. Thus, influencing economic variables such as return on sales and investment, costs, market shares, customer satisfaction, and loyalty, making the firm perform better (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

Agility

Agility illustrates the ability to be aware of market changes, orchestrate resources, and offer novel services according to the dynamism and complexity in the environment by engaging with stakeholders, partners, customers, and employees. Thus, organizations might continuously position themselves to deal with change, anticipate and evolve their strategies to gain competitive advantages swiftly. The construct separates into three aspects. Operational agility refers to the organizational ability to react to innovation opportunities economically by reconfiguring internal processes for swift, rapid response. Partnering agility relates to the competence of an organization to employ absorptive capacity to exploit and explore strategic partnerships.

Customer agility invokes organizations' ability to utilize customer relationships to derive market intelligence for competitive strategic initiatives (Liu, Chan, Yang, Niu, 2018).

Competitive advantages

Organizations employ their capabilities to generate business value, thus demonstrating a value appropriation path of cloud computing solutions to gain strategic benefits (Kathuria, Mann, Khuntia, Saldanha, Kauffman, 2018).

Investing in technology is highly relevant to thrive in a harsh competitive business climate. However, IT in itself does not create value. According to Porter (1985), integration of IT systems is not juxtaposed with increased competitiveness. Thus proper competence is needed to derive benefits. The combination of

tangible and intangible resources generates business value. It preserves competitiveness, suggesting a holistic approach to IS capabilities that embody the organization to mitigate liabilities. Thus, derive benefits from implementing and using IT systems efficiently. IS capabilities imply strategic alignment planning to deliver swift and cost-efficient operations through experiential learning, strengthening organizational knowledge capacity. Therefore, enabling the probability of value creation in the face of changes in the business environment (Aydiner, Tatoglu, Bayraktar, Zaim, 2019).

Many organizations operating in today's business climate need to possess robust information technology (IT) / information systems (IS) capabilities to locate business opportunities, redesign best practices and processes, and foster organizational change (Amron, Ibrahim, Abu Bakar, Chuprat, 2019).

According to Nevo and Wade (2010), Information communication technology (ICT)-enabled resources realize more strategic gains than other resources in the organization separately. In general, ICT produces gains as the acquisition and distribution of these resources entail complementary resources with idiosyncratic characteristics (Shao, Yang, 2021). Again demonstrating the power of synergy effects and the importance of a holistic approach.

RBV and the use of capabilities to exploit technology are pertinent perspectives to adopt in the cloud context. However, it demands knowledge management, discussed in the following subchapter.