Chapter Overview

What determines the success or failure a firm? According to the institution-based view, success and failure is determined by the rules of the game. There is much evidence, however, that this perspective needs to be supplemented. Within any industry, there are a number of firms that operate under the same rules. And yet, some are wildly successful, while others struggle for profit and eventually fail.

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How can we explain this disparity in results among firms that operate in the same institutional framework? The resource-based view answers the question by suggesting that the success of a firm is also determined by its unique resources and capabilities, and so, complements the institution-based view. After defining resources and capabilities, this section discusses the creation of value from resources/capabilities, the issue of outsourcing, and the VRIO framework. Please answer the following three questions.

  1. Pick any pair of rivals (such as Samsung/Sony, Nokia/Motorola, and Boeing/ Airbus, Coca-Cola/PepsiCo, McDonald’s/Burger King, Nike/Adidas, Carrefour/Wal-Mart, Heineken/Molson Coors, Toyota/Volkswagen or others of interest to you and possibly from different countries). Explain, in detail, why one outperforms the other. Refer to the text, specifically Chapter 4, to apply the theory and support your answer. Include your personal comments/experiences and data from the corporate websites of the two firms in question. 10 marks

  2. What are the components of VRIO as outlined in chapter 4? Outline and explain the terms. In addition, provide an example other than the one listed in the text and different from the firms selected for Question 1 to demonstrate your understanding of the concept.                                                                     10 marks


  1. Offshoring & outsourcing.

    In your opinion, do multinational corporations have a duty to maintain a strong presence in their home countries?
    Provide three reasons to support your position. Provide an example of a company and country to demonstrate your position. 10 marks


N.B. Please review the rubric provided to understand the importance of research, quality content and writing. The effort to gather appropriate data from quality sources is more important than the length of the document. However, your submission should likely be minimum 3 – 5 pages. Use APA citations and try to provide quotes or paraphrased information from a minimum of six respected sources. 


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