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Resource-Based Theory of the Firm

The central proposition of resource-based theory of the firm is that a resource leads to sustained competitive advantage over competitors. The resource-based theory of the firm explicates what a resource is and the basic characteristics that a resource has. Managers, consultants, and researchers of corporate reputation seek to demonstrate that corporate reputation improves corporate performance. The resource-based theory of the firm is frequently drawn on as an explanation for why a good reputation helps improve performance. This entry first provides an overview of the resource-based theory of the firm and discusses the resource properties of corporate reputation. It then describes how to test whether corporate reputation is indeed a resource for an organization.


Resources are the assets, capabilities, skills, knowledge, and so on that a ...

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