Human Capital in the Resource-Based View

AbstractThe resource-based view (RBV) is one of the most influential theories for explaining a firm's sustained competitive advantage (SCA). Its basic idea is that firms can attain an SCA when they possess and control valuable, rare, and inimitable assets and have an organization in place that is equipped to handle them. This article examines how human capital (HC) relates to the RBV. It deals critically with the RBV's evident weaknesses – especially its vague notions of resource and value. The article notes that there is no analysis of how HC might be differentiated from other types of resource, for the RBV treats all resources as conceptually equivalent. It distinguishes eight types of critique to the RBV. Three of these threaten the RBV's status as a core theory: the indeterminate nature of two concepts fundamental to the RBV – resource and value – plus the RBV's narrow explanation of a firm's SCA.