An exploration of VRIO resource development and competitive advantage in SMEs operating in a niche science education market in Europe.

English, Vincent (2022) An exploration of VRIO resource development and competitive advantage in SMEs operating in a niche science education market in Europe. Doctoral thesis, Birmingham City University.

Vincent English PhD Thesis published_Final version_Submitted Jul 2021_Final Award Mar 2022.pdf - Accepted Version

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Despite the plethora of empirical scholarship on competitive advantage in firms, there is a scarcity of literature explaining the relationship between firm performance, value creation and sustainable competitive advantage in an SME context. Popular theories such as the Resource-based View (RBV) analyses and interpret internal resources of the organisations and emphasises resources and capabilities in formulating a strategy to achieve sustainable competitive advantages. Resources are considered as inputs that enable firms to carry out their activities. Internal resources and capabilities determine strategic choices made by firms while competing in their external business environment. According to RBV, not all the resources of the firm will be strategic resources. Competitive advantage occurs only when there is a situation of resource heterogeneity and resource immobility. Specifically, the resources must satisfy the criteria of being valuable, rare, inimitable, and highly organised. However, the RBV is unclear on what are the specificities of resources and avoids a concrete definition of value.

Moreover, the theoretical tenets of the theory remain unclear, and there has not, as yet, developed sufficient understanding of the micro-level organisational strategies which build sustained competitive advantage. Empirical studies have also steered clear of tackling the ontological and epistemological interpretations of the relational aspects of resource building in SMEs. It is for this reason, the inner workings of this ‘black-box’ of VRIO creation remain elusive. This empirical study aims to present a unique opportunity to address this gap. Following a mixed-methods approach, an exploratory quantitative pilot study surveyed 41,857 customers (8% response rate) and a main qualitative multi-case study of 13 different SMEs in 13 different countries. The qualitative review forms the central basis of the research findings. The interpretation of the findings was through an abductive Template Analysis approach complemented by a retroductive reflection in conclusion.

The study links the scholarly domains of boundary spanning, the knowledge-based view and the RBV and suggests that a new approach and interpretation of value creation and resource configuration is timely for the RBV. To date, the RBV is positioned at the macro-level, and it has not been applied with much enthusiasm at the micro-level. This study has identified that RBV is an important and useful framework. However, its shortcoming in elucidating what and where value is created, and the true nature of resources has been highlighted. Also, the applicability of the RBV framework on a practical level for SMEs is shown to be deficient. Therefore, the study contributed to the field an acknowledgement that empirical research at the SME level adds substantially to the understanding of the RBV field in terms of value creation and capture. Moreover, the study contributes to a new way to view the RBV in terms of using complementary constructs to aid in understanding the RBV in more practical terms: the research findings enhance the development of RBV theory, research, and practice in SMEs.

The following important conclusions emerge from this study: First, the current conceptualisation of VRIO resources in terms of their relational structure has been subject to unnecessary ontological ambiguity in the RBV literature. Second, the effects of routine and deliberate learning in SMEs result in different outcomes in value creation and value capture. Third, the managerial agency and knowledge accumulation through boundary spanning are critically effective mechanisms to help an SME develop important VRIO resources. Fourth, the study concluded that VRIO resources are not irreducible to, but overlap and are interrelated, and thus should not be ignored in the RBV literature. Fifth, where VRIO resources lead to competitive advantage in SMEs, they must be supported by an infrastructure of lower-order VRIO resources. Sixth, value creation and capture are separate entities that cannot always be defined in simple monetary terms. However, the findings show that they are related entities, although distinct. The research concludes that value capture back to the firm in higher profits, or long-term loyal customers is supported through the correctly configured VRIO resources. Seventh, from a theoretical perspective, this study is the first to merge constructs of KM, KAM and boundary-spanning with the RBV (and a lesser extent, dynamic capability theory). Eighth, the study shows that the RBV can be practically grounded if a clear and precise identification of ‘value’ and ‘resources’ are available. Finally, the research brings the focus back on SMEs and shows the need for a much higher level of empirical engagement in this area.

Item Type: Thesis (Doctoral)
5 July 2021Submitted
21 March 2022Accepted
Uncontrolled Keywords: VRIO, SME, Competitive Advantage, Science Education
Subjects: CAH17 - business and management > CAH17-01 - business and management > CAH17-01-02 - business studies
Divisions: Doctoral Research College > Doctoral Theses Collection
Faculty of Business, Law and Social Sciences > College of Accountancy, Finance and Economics
Faculty of Business, Law and Social Sciences > College of Business, Digital Transformation & Entrepreneurship
Depositing User: Jaycie Carter
Date Deposited: 15 Nov 2023 09:38
Last Modified: 20 Jun 2024 12:05

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