Theories of the Firm – Expanding RBV using 3D free-form search Kbases
Blog: KWKeirstead's Blog
RBV (Resource-Based View) is a strategy development theory whose roots go back to the 1980s/1990s with antecedents going back to 1959 “Penrose, E. T. (1959). The Theory of the Growth of the Firm. New York: John Wiley”.
RBV makes the point that to be the best you can be, you have to know what your resources (and capabilities) are before trying to make most effective use of these.
The RBV message basically quits there, leaving prospective firms with the task of figuring out how, exactly, to view their resources both initially and on an ongoing basis.
The thing about resources is they are often scarce and must be shared, so the questions that arise are which resources are being used, to what extent, for which initiatives.
The problem is things can change rapidly. Accordingly, firms need a capability to dynamically allocate/re-allocate resources as they are tracking progress toward meeting strategic objectives and as they are pondering launching new initiatives.
It’s not a stretch to say that large and perhaps not-so-large firms need an inventory of the following “resource/capability” classes – capital, access to capital, land, plant, equipment, tools, intellectual property, knowhow, staff, suppliers, customers, competitors, plus changing technology and changing legislation.
Best use of a firm’s resources for initiatives requires making decisions relating to low/high investment, low/high risk, and quick/slow return new initiatives and backing out of initiatives that have taken a wrong term.
It becomes obvious that we need to know when allocating/re-allocating resources which allocations give the biggest bang for the buck. Firms reasonably do not want to tie up a resource on a low potential initiative, when the resource could be used on a high potential initiative.
Decisions of this type require knowledge which flows from information enhanced by wisdom, experience and intuition.
Donald Rumsfeld identified three categories of knowledge – a fourth (unknown knowns) was later added by others.
“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones”.
When making decisions re initiatives and the allocation/deployment of resources/capabilities, we need to take into account known knowns, known unknowns and unknown knowns, the latter posing a real challenge in the absence of ways and means of finding information the firm has but is unable (at the time of a major decision), to find.
Enter 3D free-form search Kbases that allow strategists/planners to consolidate thousands or tens of thousands of documents within one space.
The range of documents goes from text, to DOC, PDF, XLS, structured data, unstructured data, images, audio/video files.
Clearly any environment that hosts document types needs to be able to call apps that are capable of displaying the data.
The search mechanisms have to be able in the background to find and highlight any “hits” otherwise users of the Kbase have to tag the documents with key words, which we all know is tedious and unreliable (i.e. user mindsets tend to be different at the time they encode key words relative to when they later launch searches).
See my US State Dept Country Profiles 3D demo Kbase (all countries, business, travel, law enforcement, narcotics, terrorism).