Theories of the Firm – Expanding RBV using 3D free-form search Kbases

RBV (Resource-Based View) is a strategy development theory whose roots go back to the 1980s/1990s with antecedents going back to 1959 “Penrose, E. T. (1959). The Theory of the Growth of the Firm. New York: John Wiley”.

RBV makes the point that to be the best you can be, you have to know what your resources (and capabilities) are before trying to make most effective use of these.

The RBV message basically quits there, leaving prospective firms with the task of figuring out how, exactly, to view their resources both initially and on an ongoing basis.

The thing about resources is they are often scarce and must be shared, so the questions that arise are which resources are being used, to what extent, for which initiatives.

The problem is things can change rapidly. Accordingly, firms need a capability to dynamically allocate/re-allocate resources as they are tracking progress toward meeting strategic objectives and as they are pondering launching new initiatives.

It’s not a stretch to say that large and perhaps not-so-large firms need an inventory of the following “resource/capability” classes – capital, access to capital, land, plant, equipment, tools, intellectual property, know-how, staff, suppliers, customers, competitors, plus changing technology and changing legislation.

Best use of a firm’s resources for initiatives requires making decisions relating to low/high investment, low/high risk, and quick/slow return new initiatives and backing out of initiatives that have taken a wrong turn.

It becomes obvious that we need to know when allocating/re-allocating resources which allocations give the biggest bang for the buck. Firms reasonably do not want to tie up a resource on a low potential initiative, when the resource could be used on a high potential initiative.

Decisions of this type require knowledge which flows from information enhanced by wisdom, experience, and intuition.

Donald Rumsfeld identified three categories of knowledge – a fourth (unknown knowns) was later added by others.

“Reports that say that something hasn’t happened are always interesting to me because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones”.

When making decisions re initiatives and the allocation/deployment of resources/ capabilities, we need to take into account known knowns, known unknowns and unknown knowns, the latter posing a real challenge in the absence of ways and means of finding information the firm has but is unable, at the time of a needed major decision, to find.

Enter 3D free-form search Kbases that allow strategists/planners to consolidate thousands or tens of thousands of documents within one space.


The range of documents goes from text, to DOC, PDF, XLS, structured data, unstructured data, images, audio/video files.

Clearly, any environment that hosts many document types needs to be able to call apps that are capable of displaying the data.

You would not be able to do much with the above representation of the content of the “US State Dept Country Profiles”.

Click on the link below, however, and you can see the dramatic change that results from having the same data in a 3D Kbase.

The search mechanisms must be able in the background to find and highlight “hits”, otherwise users of the Kbase have to tag the documents with keywords, which we all know is tedious and unreliable (i.e. user mindsets tend to be different at the time they encode keywords relative to when they later launch searches).

See my “US State Dept Country Profiles” 3D demo Kbase (all countries, business, travel, law enforcement, narcotics, terrorism).


Management consultant and process control engineer (MSc EE) with a focus on bridging the gap between operations and strategy in the areas of critical infrastructure protection, major crimes case management, healthcare services delivery, and b2b/b2c/b2d transactions. (C) 2010-2020 Karl Walter Keirstead, P. Eng. All rights reserved. The opinions expressed here are those of the author, and are not connected with Jay-Kell Technologies Inc, Civerex Systems Inc. (Canada), Civerex Systems Inc. (USA), CvX Productions, Global Initiatives LLC or HNCT LLC Number of accessing countries 2010-2020/2/15 : 154
This entry was posted in Decision Making, Enterprise Content Management, Knowledge Bases. Bookmark the permalink.

5 Responses to Theories of the Firm – Expanding RBV using 3D free-form search Kbases

  1. Luke says:

    Very cool post! I visit your blog fairly often and I always feel more intelligent afterwards.
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    Liked by 1 person

  2. We are poised, it seems, to use RBV in the area of Major Crimes Case Management.

    I doubt that Edith Penrose would have predicted that her research would help improve crime scene investigation outcomes.

    Stay tuned . . .


  3. Pingback: How Low Can You Go? –  Part IV – Essentials for building, sustaining & improving corporate competitive advantage. | KWKeirstead's Blog

  4. Turns out that “unknown knowns” (things the organization knows but decision makers are unable to find at the the time decisions are needed) are pretty important as well.

    Guess what? Decisions get made with information that is available.


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