Norman T. Sheehan

Enhancing the prescriptiveness of the resource‐based view through Porterian activity analysis

Purpose – Almost since the inception of the resource‐based view (RBV), critics have complained that the view is weak in the prescriptive dimension. A recent statement of this critique is by Priem and Butler, who argue that the RBV does not address value creation. One aspect of this is that the link between resources and value creation is black‐boxed. The paper aims to argue that a Porterian activity analysis with a focus on activity drivers can remedy this weakness, and how it brings into focus important implementation issues that are neglected in the RBV.Design/methodology/approach – The study extends Priem and Butlers critique of the RBV by examining the RBV literature in light of Porters activity‐based framework.Findings – The resource‐based logic has been gainfully applied in many fields other than strategy. However, because it lacks the concept of activities, the paper argues that it has not reached its full potential in the field of strategy. Formally including the concept of activities and activi...

Why old tools won't work in the “new” knowledge economy

Purpose – Knowledge‐intensive firms are growing in importance yet there are few tools to help managers to analyze and improve their performance, which this paper aims to describe.Design/methodology/approach – This paper builds on Michael Porters strategic frameworks for industrial firms. It outlines how his frameworks, in particular the five forces and value chain, need to be modified if they are to be effectively applied to knowledge‐intensive firms.Findings – Managers of knowledge‐intensive firms need to use the old tools in new ways, if they are to improve their business models and ultimately increase their profitability.Practical implications – The paper outlines ways for managers of knowledge‐intensive firms to improve their firms performance. First, managers using a revised five forces can improve their value capture by reducing bargaining power of its experts, making outsourcing of expert services more attractive, or improving their reputational status. Second, the paper outlines a continuum of b...

Discovering new business models for knowledge intensive organizations

Purpose – Assists senior managers with generating new business models by mapping the competitive space occupied by knowledge intensive organizations and outlining strategic positioning options.Design/methodology/approach – Provides a conceptual paper based on studies of knowledge intensive organizations.Findings – Based on four strategic positioning characteristics, the authors identify three types of knowledge intensive organizations; diagnosis, search, and design shops. All knowledge intensive organizations are either pure types or combinations of these types.Practical implications – While mapping the competitive space lets managers of knowledge intensive organizations pinpoint where they are relative to their rivals, strategy involves finding unique, profitable business models. To help managers detect potential opportunities, the paper outlines a full menu of competitive positioning options. Generating new business models in this manner should allow managers to enter existing, profitable niches or esta...

Value creation logics and resource management: a review

Purpose – The purpose of this paper is to locate different value creation logic contingencies within the resource management framework. While Sirmon et al. discuss how external environmental contingencies, such as environmental munificence, impact resource management, this paper aims to discuss a second key contingency; that is how the firms choice of value creation logics impacts its resource management choices. This paper seeks to argue that management of the firms resources and capabilities is contingent on the value creation logic employed by the firm.Design/methodology/approach – This paper reviews three value creation logics: value shop, value network, and value chain and then integrates them within the resource management framework.Findings – A review of extant literature indicates that value shop firms, value network firms, and value chain firms enact very different environments and thus require very different resources and capabilities to support their value creation approaches. It is argued th...

Understanding How Resources and Capabilities Affect Performance: Actively Applying the Resource-Based View in the Classroom

The resource-based view is a strategic framework for understanding why some firms outperform others. Its importance is reflected in its wide inclusion in strategy texts as a tool for assessing a firm’s internal strengths and weaknesses. This article outlines an experiential exercise that demonstrates how different bundles of resources and capabilities may explain differences in value created across firms. The primary benefit of this in-class exercise is that students actively apply Barney’s VRIO ( v aluable, r are, i nimitable, and o rganized) framework to understand why their team won or lost. The debrief can also focus on issues such as the impact of imitability on sustainability, why strategies emerge, and elements of a good strategy. Preliminary data from 18 undergraduate and graduate sections indicates that learning objectives have been consistently met.

Reputation and value creation in search shops

We look at reputation effects in firms which create value by finding valuable objects, which we label search shops. The paper examines and validates different measures of value creation and reputation in search shops and finds partial support for our hypothesis that higher reputation is associated with higher value creation. The negative findings are instructive as they suggest that future studies of search shops, such as petroleum exploration units, must take care when using simple counts of success to measure value created. The paper provides empirical data on three key success factors in search shops and concludes with tactics for increasing a search shops reputation.

Value creation logics and the choice of management control systems

Most, if not all, management control tools were formulated for firms employing an industrial value creation logic (i.e., Ford, McDonald’s, and Wal-Mart). We argue that given the growth, both in number and importance, of firms employing a knowledge value creation logic (i.e., Accenture, Goldman Sachs, and Clifford Chance) and firms employing a network logic (i.e., Verizon, eBay, and Expedia) that these control tools should be revisited in light of this potentially critical contingency. This paper outlines the key characteristics of knowledge intensive firms and network service firms and then examines how these contingencies impact Simons’ (1995) Levers of Control and Kaplan and Norton’s (1996) Balanced Scorecard. We find that whilst each lever/perspective is still relevant for each value creation logic, the relative importance and thus intensity of use should vary between logics.

Jetfighter: An Experiential Value Chain Exercise

Value chain analysis is widely taught in business schools and applied by practitioners to improve business performance. Despite its ubiquity, many students struggle to understand and apply value chain concepts in practice. JetFighter uses a complex manufacturing process (making intricate paper planes) to provide students an opportunity to enhance their value chain competencies. Teams of students are asked to use value chain concepts to develop innovative business strategies that will enable them to fulfill customer requirements and outperform rival teams. The exercise involves two production periods with a brief value chain lecture occurring after the first production period. Given that teams of students typically lose money in the first production period, their motivation to learn about the value chain concepts is enhanced as they are immediately provided an opportunity to apply this knowledge in the second production period. The award-winning exercise was developed over a 9-year period with the help of undergraduate and masters’ students. Student feedback suggests that they found the exercise an engaging and enlightening way to learn about value chain analysis as 99% of students (n = 244) recommend that instructors at other universities use the exercise.

Using Design Thinking to Write and Publish Novel Teaching Cases: Tips from Experienced Case Authors.

With increasing calls for a greater connection between management education and practice, teaching cases play a vital role in the business curriculum. Cases not only allow instructors to expose students to practical problems but also let educators contribute to the scholarship of teaching and learning. An important reason why faculty members may refrain from writing cases is they perceive it is difficult to develop publishable cases that are also novel. Reviewers of the journals that publish teaching cases are increasingly asking authors to place the case in the extant literature and explain what makes their case unique. To overcome some of the challenges encountered when attempting to write and publish novel teaching cases, this article presents a useful framework—Design Thinking—for tackling the “wicked problem” of developing novel cases and provides experience-based tips to implement the framework. By introducing the concepts and language of design thinking, we provide case writers with an iterative approach that leads to the development of novel cases by identifying and innovatively addressing instructors’, students’, and editors’ demands. We argue that by applying a design-thinking approach, case writers can produce novel and publishable instructional cases.

Principles operationalize corporate values so they matter

Purpose – The authors show how organizations can best ensure that employees act in accordance with the corporation’s values. The key action is to develop a set of principles that amplify and fully define the values so leaders can communicate them more effectively. Principles that supply operational guidance help employees internalize the corporation’s values. Design/methodology/approach – The article supports its conceptual approach with a case. Findings – The case shows how principles helped one organization explicate the it’s values and turn them into a set of positively worded, unambiguous statements that guide employees in their daily work. When employees routinely apply the principles in their work, senior management can confidently delegate decision-making authority to the lowest appropriate level in the organization, having confidence that the outcomes of employee actions will be consistent with the organization’s vision, mission and strategic goals. Practical implications – By describing the organization’s values in operational terms, the principles, taken together, provide each employee with a clear framework to use when making decisions. Originality/value – The article shows senior leaders and boards that a key benefit of devolving power and using principles to guide employees’ actions is that it not only improves corporate performance in the short term, it also makes the firm more attractive to talented candidates for employment in the longer term.