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Conventional Resource-Based Theory and its Radical Alternative: A Less Materialist-Individualist Approach to Strategy

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Abstract

Management scholars, practitioners, and policy makers alike have sought to develop a deeper understanding of recent business crises—including corporate scandals, the collapse of financial institutions, and deep recession—in order to prevent their recurrence. Among the “culprits” that have been identified is Conventional management theory based upon a moral-point-of-view founded on assumptions of materialism and individualism. There have been calls to move beyond the dominant profit maximization paradigm and think about other, potentially more compelling, corporate objectives (Hamel, 2009). In this article, we respond to those calls, and seek to develop what we call Radical resource-based theory (RBT), which draws from and contrasts with the highly-influential Conventional RBT. Radical RBT defines the value of resources more broadly than profit maximization, rarity as an occasion for stewardship, inimitability as an opportunity for teaching, and non-substitutability as an opportunity to meet a panoply of human needs. This augmentation of RBT promises to help managers and scholars address a myriad of problems that are insoluble under Conventional assumptions. More generally, it shows the value of broadening management theory to a radical perspective by relaxing assumptions of self-interest and materialism.

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Notes

  1. This summary draws from both recent reviews of RBT (Barney and Hesterley 2006) and classic treatises on the subject (Barney 1991a; Barney 1991b, 2001; Barney et al. 2001; Conner 1991; Wernerfeld 1984, 1995). It also draws on a review of RBT in Dyck and Neubert (2010) and their ideas toward developing what they call Multistream management.

  2. In terms of the Weberian framework, a Radical variation stakeholder theory actively considers the interests of other stakeholders alongside the firm’s, not for some self-serving instrumental goal, but rather because others are valuable in their own right (i.e., because they are ends and not means, Kant 1990). Moreover, while current stakeholder theory may implicitly regard non-material forms of well-being as important (e.g., it may acknowledge that one of the interests of employees may be having a safe work environment) or is silent on the matter (e.g., Jones and Wicks 1999, p. 215), Radical stakeholder theory explicitly considers multiple forms of well-being (financial, ecological, social, physical, intellectual, and spiritual). This is consistent with and builds on the arguments that all of these forms of well-being are important, that measures of well-being correlate only marginally with material wealth, and that causality, such as there is, likely runs from well-being to wealth (Diener and Seligman 2004).

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Acknowledgments

We thank the participants of the Ethics Conference and Dr. Reg Litz for their encouragement and helpful comments.

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Correspondence to Geoffrey G. Bell.

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Bell, G.G., Dyck, B. Conventional Resource-Based Theory and its Radical Alternative: A Less Materialist-Individualist Approach to Strategy. J Bus Ethics 99 (Suppl 1), 121–130 (2011). https://doi.org/10.1007/s10551-011-1159-4

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