examining the predictive power of the VRIO-framework
Powalla, Christian; Bresser, Rudi K. F.
Year of publication:
Strategy tools are widely used in the practice of strategic management to
yield a good solution with an acceptable problem-solving effort. This paper
presents results of an experimental research project that assesses the
practical effectiveness of a theory-based decision-making tool, the VRIO-
Framework, in predicting the stock-market performance of different companies.
The VRIO’s predictive power is compared to the predictions derived from
Analyst Ratings that are a widespread and commonly used tool in the decision-
making context of this study. Our results suggest that the VRIO-Framework is a
particularly effective forecasting tool whereas the power of Analyst Ratings
is disputable. The results also provide support for the practical usefulness
of resource-based theory.