Enhancing strategic management using a “quantified VRIO”: Adding value with the MCDA approach

Abstract

• A quantified VRIO is presented. • The proposed approach overcomes some limitations of the traditional VRIO framework. • MCDA improves understanding of causal relationships between resources and capabilities. • The Choquet integral adds value to the Resource-based View. Strategic management has been popularized since the 1960s as a useful tool in the search for success factors in organizations’ internal and external environments. Strategic management researchers have observed and created strategies now considered to be essential pillars of contemporary management operations. This approach relies on managers’ ability to understand and evaluate contextual trends, but a variety of questions have been left unanswered, especially regarding analyses of combinations of quantitative and qualitative decision criteria. This study sought to enhance strategic management by developing a quantified valuable, rare, inimitable, and organized (VRIO) framework using the multiple-criteria decision analysis (MCDA) approach. To accomplish this objective, the proposed VRIO model was combined with the Choquet integral, and a real-life application was conducted to test this approach’s adequacy to support strategic management. The integrated methodology developed was shown to offer an innovative business improvement process. The perceived benefits and limitations are also presented and analyzed.