Relevance of resource based view themes for capability evolution

Abstract

RBV implicitly assumes omnipotent nature for certain firms. These are the firms that can create rent generating capabilities anytime and therefore forever. While theoretically, it seems plausible, empirically it may remain a utopian imagery. This paper breaks free of such grandiose assumptions and proposes an evolutionary trajectory for idiosyncratic capabilities wherein capabilities evolve by interactive effects among industry participants. The concept of capability life cycle has been extended to include process dimensions through which change occurs. This paper extends concept of capability life cycle by suggesting dimensions of change under each phase.