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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
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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)