Resource-based theory views heterogeneity among
firms in resources—assets tied semipermanently
to the firm that allow its managers to conceive
and execute value-creating strategies—as fundamental
in explaining firm performance (Barney,
1991). However, resource-based theory has been
criticized for its inability to explain how resources
are developed and deployed to achieve competitive
advantage (e.g., Priem and Butler, 2001), and
its failure to consider the impact of dynamic market
environments (e.g., Lengnick-Hall and Wolff,
1999). Theorists have made a number of recent
developments, collectively labeled ‘dynamic capabilities’
theory, addressing these limitations in
traditional resource-based theory (Newbert, 2007;
Zott, 2003).