Relative resource strengths, relative resource weaknesses and strategy: Exploring the performance effects of resource portfolios

The resource-based view (RBV) has become a cornerstone of strategic management research because it identifies the criteria (i.e., value and rarity) required for resources to be sources of competitive advantage. However, despite its important contributions, the RBV requires further advancement. This dissertation attempts to theoretically and empirically extend the RBV through the examination of two important concepts: the resource portfolio and relative resource holdings.; Although strategists commonly conceptualize firms as integrated bundles of resources, the majority of research on resource effects has investigated one or a few firm controlled resources at a time. Thus, little is known about the interactions or interdependence of resources within the firm. Additionally, competitive advantage by its very nature is relative. That is, an advantage is only an advantage when it provides a firm positive differentiation from competitors. Therefore, competitive advantage is not accurately specified without relative comparisons of competitors' resources' value and rarity.; This research addressed both issues by integrating the concepts of the resource portfolio and relativity. Through this integration, the constructs, accumulative relative resource strength and accumulative relative resource weakness are developed. An accumulative relative resource strength is the sum of the firm's individual resources that are capable of producing more value for stakeholders than the firm's average competitor's functionally similar resource. Conversely, an accumulative relative resource weakness is the sum of the firm's individual resources that are capable of producing less value for stakeholders than the firm's average competitor's functionally similar resource.; Accumulative relative resource strength and weakness are hypothesized to directly and interactively affect firm performance, while additionally moderating the corporate strategy/performance relationship.; The empirical results from a sample of regional U.S. banks showed that an accumulative relative resource strength has a curvilinear relationship with performance (inverted U-shape), while an accumulative relative resource weakness has a negative relationship with performance. Additionally, an accumulative relative resource weakness negatively moderated the accumulative relative resource strength/performance relationship. Furthermore, service diversification/performance relationship is curvilinear (inverted U-shape), and this relationship is moderated by both accumulative relative resource strength and weakness.