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Human Resource Management and Performance: Adding value through people/managment en prestaties - The VRIO framework

4 important questions on Human Resource Management and Performance: Adding value through people/managment en prestaties - The VRIO framework

What's the difference between outside in and inside out approach?

Outside-in thinking (Porter-like and Mintzberg-like) is based on external industry-based competitive issues.

Inside-oud approach (Barney) is based on internal resources constitute the starting point of organizational success.

What is the resource-based view (RBV) of Barney?

The resource based view is a dominant theory on the added value of HRM. It states that there can be a long-term competitive advantage from the resources a company owns using the inside out approach. Barney distinguishes four different internal resources:

1. Valuable - economic condition
2. Rare - scarcity
3. Inimitable - hard to copy
4. Non-substitutable - no other resources that will meet the same ends

What is the VRIO framework?

The VRIO framework is a framework build op on the RBV theory of Barney. The model shows us we can gain sustained competitive advantage through value, rare and inimitable internal resources.The model builds up on four stages:
- Competitive disadvantage (valuable = no) = below average
- Competitive partly (valuable = yes) = average
- Temporary competitive advantage (valuable = yes, rare = yes) = above average
- Sustained competitive advantage (valuable = yes, rare = yes, difficult to intimitate = yes) = above average

Support by the organization is in all four stages necessary.