THEORETICAL FRAMEWORK FOR USING RESOURCE BASED VIEW IN THE ANALYSIS OF SME INNOVATIONS

European Scientific Journal, Jan 2014

The objective of this paper is to present a Resource based view of a firm as a valid conceptual framework for the analysis of SME innovativeness. This paper may serve future studies aiming at devising a methodology for estimation of the connection between resource categories of various enterprises and the implementation of innovation and growth in small and medium enterprises. Authors provide a thorough literature analysis and propose their own categorization of firm’s resources. Morover, a critical review of innovation indicators and their congruency with research aims is provided within the paper.

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THEORETICAL FRAMEWORK FOR USING RESOURCE BASED VIEW IN THE ANALYSIS OF SME INNOVATIONS

European Scientific Journal December 2013 /SPECIAL/ edition vol.1 ISSN: 1857 - 7881 (Print) e THEORETICAL FRAMEWORK FOR USING RESOURCE BASED VIEW IN THE ANALYSIS OF SME INNOVATIONS Dr. Ilona Baumane-Vitolina 0 docent Mg. oec. Igo Cals 0 Candidate 0 0 University of Latvia , Latvia The objective of this paper is to present a Resource based view of a firm as a valid conceptual framework for the analysis of SME innovativeness. This paper may serve future studies aiming at devising a methodology for estimation of the connection between resource categories of various enterprises and the implementation of innovation and growth in small and medium enterprises. Authors provide a thorough literature analysis and propose their own categorization of firm's resources. Morover, a critical review of innovation indicators and their congruency with research aims is provided within the paper. Resource based view; SME; innovations - Introduction: Alongside with the changes taking place in world economics, that may be regarded as the end of industrial era and the rise of knowledge economics, a prominent place in business administration literature of USA and Europe is hold by Knowledge-Based Approach as a part of the Theory of the Firm. By this approach the role of an enterprise is clarified, in the ability to decrease the costs for information accumulation and knowledge procurement that would be much higher if incurred to an individual. Enterprises are figuratively compared to living bodies that grow and learn by the Knowledge-Based Approach as well as Knowledge Management related literatury sources. Such approach is in fact a logical continuation of Resource-Based View, by which an enterprise is conceptualized as a unique packet of resources where the most important short-term competitive strength factors are its knowledge and capability or competence summation. Knowledge-Based Approach is used by literatury sources in order to understand and estimate innovation implementation processes and their consequences in entrepreneurship. Although Resource-Based View and a derivative Knowledge-Based Approach were emerged from management studies referred to corporate management and large multinational organizations, some authors used later the theoretical conclusions of these concepts also in connection with management issues in small and medium-sized enterprises in the context of innovation implementation processes in these companies. It is supposed also by the authors of this paper that both Resource-Based View and a derivative Knowledge-Based Approach are utilizable in innovation analysis of small and medium-sized enterprises, but notable restrictions must be concerned proceeding from the transferal of the approach to an essentially distinctive research object. Enterprise resources are analysed by the authors within a conceptual framework of Resource-Based View, by which the most important enterprise resources are considered to be those that ensure enterprise innovative activities contributing consequently to long-term competitive strength. In such a manner not the material resources and their availability are under the focus, but enterprise special competences, that are defined by scientific literatury sources as the ability to produce innovations, observe commercial opportunities, produce new knowledge on the basis of the existing database etc. Enterprise resources as the factor affecting growth and innovation In recent years an increasing criticism of neoclassic economic theory based on inability of a traditional model to clarify the complicated economic processes and enterprise development lines and different tempo rates within the frame of one field is revealed by foreign business administration literatury sources. In the last couple of decades an observable progress is noted in the development of the Theory of the Firm. The paradigm of neoclassic economics under which an enterprise is considered as a black box and its processes are not conceived to be worthy of respect, is substituted by new, inter-disciplinary approaches trying to obtain a response to questions on enterprise existence targets, to explain the diversities in enterprise behavior as well as considers enterprises as living bodies that can learn and grow (Foss, 2006; Casson, 2005). This new approach suggests a different way of investigation of entrepreneurship system as opposed to entrepreneurship systems reviewed by traditional economic publications - those are focused on material goods and money flows between production enterprises while the new approach pays attention to information and knowledge flows. Under the Theory of the Firm the Resource-Based View was produced in which an enterprise is defined as the summation of strategically important resources assisting in determination of advantages of long-term competitive strength and executed work of different enterprises in one field, owing to unicity and irreplaceability of these resources. Initially th (...truncated)


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Baumane-Vitolina Ilona, Cals Igo. THEORETICAL FRAMEWORK FOR USING RESOURCE BASED VIEW IN THE ANALYSIS OF SME INNOVATIONS, European Scientific Journal, 2014,