The future of resource-based theory

Abstract This thing called resource-based theory has come a long way since the mid-1980s, when it was first being formulated by Rumelt (1984), Wernerfelt (1984), and Barney (1986a). Beginning with a small group of scholars, resource-based theory grew rapidly until it arguably became the dominant theory in the field of strategic management by the late 1990s. This roughly fifteen-year period saw numerous refinements of the theory, many empirical tests, and several pointed criticisms (e.g. Porter 1991; Priem and Butler 2001; Bromiley 2005). But the central assertions of the theory—that firms often possess different resources and capabilities, that these different resources and capabilities enable some firms to implement valuable strategies that other firms will find too costly to implement, and that these differences among firms can be long lasting—remain pretty much unchanged since its earliest development. Given this history, a reasonable question becomes: What is next for resource-based theory? Is it possible that this theory will continue to yield new theoretical or empirical insights? If so, in what areas are these insights likely to exist? Or, has this theory run its course, destined to being part of the established base of theory in the field of strategic management, but no longer inspiring new and creative theoretical and empirical work? Of course, our belief is that resource-based theory has the potential to continue to generate new theoretical and empirical insights. The primary purpose of this chapter is to describe some areas where this potential might be realized. However, before describing where these insights are likely to come from, it might make sense to cite a few areas where we think additional discussion and debate is not likely to generate new insights.