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  • Essay / The Evolutionary Theory of a Firm - 779

    Focusing on firm-level analysis, RBV suggests that differences in firm capabilities are primarily the result of resource heterogeneity across firms (Peteraf, 2006). Firms that can accumulate rare, valuable, non-substitutable, and imperfectly imitable resources and capabilities will gain an advantage over their competitors (Barney, 1996). A distinction is normally made between resources and capabilities, as "resources are stocks of available factors that are owned or controlled by the organization and capabilities are the ability of an organization to deploy resources" ( Freiling, 2008). Resources tend to be tradable in markets and can be divided into tangible assets, such as financial and physical capital, and intangible assets, such as human and organizational capital (Barney, 1986). In contrast, capabilities reside in routines that are intrinsically intangible and embedded in the firm and therefore cannot be traded in factor markets (Kogut and Zander, 1992). Building on the evolutionary theory of a firm, the innovation capabilities approach of a firm has emerged. as an extension of RBV. Specifically, the processes of integrating, reconfiguring, acquiring and releasing resources, using resources to match and even create market change (Eisenhardt and Martin, 2000). Furthermore, they are essential for gaining and maintaining a competitive advantage in sectors where technology and the market are evolving (Verona & Ravasi, 2003). As such, they are considered prior organizational and strategic routines that allow managers to acquire resources, which they then modify, integrate, and recombine to generate new value-creating strategies. Eisenhardt and Martin (2000), as well as Zahra and George (2002), argue that a firm's routines or processes, its organizational culture, and advances in information technology can form unique innovation capabilities that enable the organization to make strategic changes that give it the flexibility to operate in innovation. markets. Lawson and Samson (2001) applied an innovative capabilities approach to the study of innovation. Many authors have highlighted the differences between an organization's well-established or dominant activities and its innovative or new activities (Badawy, 1993). Lawson and Samson (2001) proposed a model that operationalizes this global innovation capacity into seven elements: vision and strategy; leverage the skills base; organizational intelligence; creativity and idea management; organizational structure and systems; culture and climate; and technology management. The concept of innovation capabilities has proven useful in some other areas of marketing. Previous studies have considered their use in the analysis of a firm's international expansion (Griffith & Michael, 2001; Grant, 1996), while Hart and Sharma (2004) analyzed the capabilities required to meet the challenges of globalized and rapidly evolving markets..