Capabilities, business processes, and competitive advantage: choosing the dependent variable in empirical tests of the resource-based view
Article first published online: 3 DEC 2003
Copyright © 2003 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 25, Issue 1, pages 23–37, January 2004
How to Cite
Ray, G., Barney, J. B. and Muhanna, W. A. (2004), Capabilities, business processes, and competitive advantage: choosing the dependent variable in empirical tests of the resource-based view. Strat. Mgmt. J., 25: 23–37. doi: 10.1002/smj.366
- Issue published online: 3 DEC 2003
- Article first published online: 3 DEC 2003
- Manuscript Accepted: 2 JUL 2003
- Manuscript Received: 7 MAY 2001
- resource-based view;
- information technology;
- business processes;
- competitive advantage
A growing body of empirical literature supports key assertions of the resource-based view. However, most of this work examines the impact of firm-specific resources on the overall performance of a firm. In this paper it is argued that, in some circumstances, adopting the effectiveness of business processes as a dependent variable may be more appropriate than adopting overall firm performance as a dependent variable. This idea is tested by examining the determinants of the effectiveness of the customer service business process in a sample of North American insurance companies. Results are consistent with resource-based expectations, and they show that distinctive advantages observable at the process level are not necessarily reflected in firm level performance. The implications of these findings for research and practice are discussed along with a discussion of the relationship between resources and capabilities, on the one hand, and business processes, activities, and routines, on the other. Copyright © 2003 John Wiley & Sons, Ltd.