Tautology, Managerial Relevance, and Predictive Power of the RBV: The Neglected Content Dimension of Organizational Capabilities

This study examines “capabilities” in the conceptual and empirical literatures, to reveal whether indeterminateness of value is a problem within RBV, as suggested by the recent tautology debate. Conceptual studies typically relate to capabilities in terms of the desired ends of their use, whereas empirical studies conceptualize capabilities as composite constructs with desired ends and content-oriented elements. This difference is not coincidental, but reflects lack of clarity in RBV with regards to capability properties. Strikingly, major RBV works provide little input to the methodology of capability conceptualization. We propose that cross-fertilization with content fields enables examination of capabilities independently of performance. A clearer separation between the variables of the RBV equation would improve its predictive power and provide clearer management implications. The conceptualization process is elaborated upon and examplified utilizing e-business as a content field.