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In praise of the Resource Based View - a final word 2014's World Cup

Dr Marco Arraya

Posted: July 19, 2014

What a World Cup!!!  What superb matches for someone who loves the adrenaline induced by sport, and for those with an interest in the game’s “back office”.

After Brazil shocked the world of football with their performances against Germany and the Netherlands, Argentina and Germany played an exciting, physical, tactical and stressful match that neither team really deserved to lose.

After the hundreds of World Cup articles that have been written about the Brazil team’s performances and Germany’s efficiency and team spirit, I have asked myself: if Brazil was the most value squad (£407m) – almost 2.44 times Germany team (£167m) – how was it possible that there was such a marked difference in the performances of Brazil and Germany?

The football tribe that follows their teams and players, and just cares about the emotional spirit of the game, would probably answer this question by saying something like, ‘Brazil? That’s football, these things happen, and the coach cannot control the players´ emotions’ and ‘Germany? They have started to play like Latin’s; they have art and rigour.”

For the more rational among us, we are likely to believe that behind every action there is a profound reason that justifies the outcome, the answer could be: “Brazil?? Germany?? My friend, who properly manages and leverages resources has a better chance to win, and the mannschaft did such thing”. I totally agree with the rational view, because the management theory supports this approach.

The resource base view (RBV) theory states that the foundations for the competitive advantage of an organization/team is found first and foremost in the application of a bundle of valuable, rare, inimitable and non-substitutable (VRIN) tangible or intangible resources at the organization/team’s disposal. In the case of football, at least at this level, the teams have three distinctive intangible resources (stemming from the human capital): management, coach and players.

What I am going to write may seem like common sense, however the evidence shows: 1) when these three resources are competent and are aligned, their sum is greater than the sum of the parts; 2) when one of them is incompetent or misaligned the chain will clearly break at the weakest link; 3) for a while the coach’s knowledge and experience can disguise the shortcomings of management and players.

On the other hand these three resources need capabilities to engage them within the team, such as the processes to transfer knowledge on the pitch (match strategy and tactics; physical, technical, emotional training, all of them coach’s work). If the training and logistics infrastructure are functional, if the players are free of injuries and emotional problems, but on the pitch the team is playing badly and the players look out of shape, who is responsible for this? Who is the weakest link?

These two relevant questions lead us back to the RBV, because the human and sports capital should be properly and ably managed for the coach and the organization leader should choose a coach that guarantees leadership, competence, innovation, hard work, and no desperate need for personal recognition. If the resource “players” are VRIN and if the resource “coach” does not leverage them, this means the resource “management” did not take the best decision about the chosen coach because he/she is not VRIN for those players. The conclusion is that management should hire a VRIN coach, not coaches approved by the media or fans; and as Soriano (2011) states “the ball doesn’t go in by chance”.

How wonderful it is to be a steady and rational sport fan with the support of the RBV!!!!

PS – In sports small things can make all the difference, and dozens of variables can change the performance direction. However, this post just makes a consideration of one possible cause of the Brazil team’s performance during the world Cup.

About Dr Marco Arraya

Marco Arraya is a manager and consultant in the sports and health equipment industry. He holds a PhD in strategic management from the Universidade Aberta (Portugal) and an MSc in sports management from FMH/Universidade Técnica de Lisboa (Portugal). His research interests are in business management practices, dynamic capabilities, resource based view, business models and learning organisation. He writes for several Portuguese sports and economics magazines/journals and can be contacted at: marco.arraya@marcoarraya.com