This view really took off in the 1990s when a number

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2003). This view really took off in the 1990s when a number of conceptual papers were published (e.g. Barney 1991; Conner 1991; Mohoney and Pandian 1992; Peteraf 1993). The principles were popularised by Prahalad and Hamel (1990, 1994), who proposed that firms should develop unique resources and thus achieve the core competence to sustain growth. According to Dunning (1988), Dierickx and Cool (1989) and Douma and Schreuder (1998), firm-specific internal resources include: financial resources, tangible resources (such as plant, equipment and buildings), and intangible resources (such as patents, brands, reputation, experience, technologies, and organisational routines). Similarly, Barney (1991) classifies firm‘s resources into three categories: physical capital resources (i.e. plant, equipment), human capital resources (i.e. training, experience, judgment, intelligence, relationships, and insight of individual managers and workers in a firm), and organisational capital resources (i.e. formal and informal planning, and the controlling and coordinating systems of a firm). According to Haan et al. (2002), RBV only focuses on critical or strategic resources those resources that are critical for a firm‘s superior economic performance and constitute organisational routines or core competences (Hamel and Prahalad 1994;
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38 Hamel 1996; Cool and Schendel 1988; Rangone 1999). Haan et al. (2002) and Teece et al. (1997) defined capabilities as the firm‘s capacity to develop and reconfigure its internal and external resources and competences to promptly respond to changing environments. In the analysis of strategy of small medium size enterprises using the RBV approach, Rangone (1999) argues that a firm‘s superior economic performance is based on three core capabilities: i) innovation capability; ii) market management capability; and, iii) production capability to satisfy customers. A major contribution of the RBV approach is that it provides valuable guidance for a company to focus on its firm-specific internal resources. It largely complements the limitations that are inherent in Porter‘s theory (Miller and Shamsie 1996). However, the concept of resources remains an amorphous one that is rarely operationally defined and tested in different competitive environments (Miller and Shamsie 1996). Critics also pointed out that its inward focus may risk ignoring the nature of market conditions (Hooley et al. 1997). It appears that the strengths of the RBV are the aspects where Porter‘s theory presents limitations. The third school of corporate competitiveness theory focuses on strategic management (Flanagan et al. 2007). The discipline originated in the 1950s and 60s, with its heyday in the 1970s. It had Alfred Chandler, Philip Selznick and Igor Ansoff as its most influential pioneers. Mintzberg (1990) located 10 ―schools‖ of strategy research that have developed from the emergence of strategic management as a field of study. As defined by Wheelen and Hunger (2002), strategic management refers to a set of managerial decisions and actions that
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39 determines the long-run performance of a corporation. It comprises some generic
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