T H E O R I E S O F S T R AT E GY · M S C B A S T R AT E GY · U VA
Meeting 5.1
The Resource-Based View II
The Low Church: Knowledge & Capabilities
Dierickx & Cool (1989) Grant (1996) Prahalad & Hamel (1990) Case: PTT Post
Contents
1. The big picture: why a "Low Church"?
2. Dierickx & Cool (1989): asset stock accumulation
3. Grant (1996): the knowledge-based view
4. Prahalad & Hamel (1990): core competencies
5. The main theme: complementarities (Principle 5)
6. Case: PTT Post
7. High vs. Low Church — study question 9
8. Definition list
Sources: Lecture 9 slides (ToS 5.1 recap), ToS slides "Knowledge and capabilities" & "Core
competencies", Dierickx & Cool (1989), Grant (1996), Notes on lectures (Lecture 9), Reading guide,
Study guide 2026-27, Case PTT Post. Exam: 12 October 2026.
ToS 5.1 · Low Church RBV · 1/16
, 1. The big picture: why a "Low Church"?
Up to this point the course discussed positional views (Porter, High Church RBV, added value view). Their
managerial message: build a position of competitive bargaining power — higher willingness-to-pay and/or lower
economic costs — through a favourable resource position. But how do firms get into these favourable (resource)
positions? That is the question of the Low Church. (Lecture 9 slides 7–8)
Factor market Product market
imperfections imperfections
FIRM
Resources Products
= black box
costly-to-copy resources superior economic value
Resource-based view Positioning view
Figure 1 — The view of the firm in neoclassically grounded theories (Lecture 9, slide 13). The firm itself stays a black box.
Limitations of the neoclassical model Three (partial) solutions
Firm as black box – productive knowledge is outside Limitation Solution
the analysis
Static equilibrium logic – preferences and Black box Knowledge & capabilities views (Dierickx
productive knowledge are treated as given & Cool 1989; Grant 1996) — this meeting
Firm as unitary agent – value appropriation inside Static Dynamic capabilities view (Teece et al.
the firm is ignored 1997) — meeting 5.2
The High Church RBV (and the added value view) Unitary Bargaining view (Coff 1999) — meeting
import these limitations. agent 3.2
The RBV family
Branch Strands & key authors Logic
High Church Factor market competition (Barney 1986) Neoclassical, equilibrium; resources
Core RBV (Barney 1991; Peteraf 1993; Peteraf & bought in (imperfect) factor markets;
Barney 2003) Ricardian rent
Low Church Capabilities view (Dierickx & Cool 1989) Opens the black box, dynamic,
Knowledge-based view (Grant 1996) process-based; resources must be
Dynamic capabilities view (Teece et al. 1997) built
Popular versions Prahalad & Hamel (1990) core competencies; Managerial "translations" of the Low
Stalk, Evans & Shulman (1992) organizational Church ideas
capabilities
The High/Low Church terminology comes from Gavetti & Levinthal (2004) (Reading guide, meeting 2.1).
Three shifts in the Low Church (1) From "resource picking" to "capability building" — flows (asset accumulation)
rather than stocks (Dierickx & Cool); "resources that must be built because they cannot be bought" (Teece et al.
1997).
(2) Opening the black box & from static to dynamic arguments — incorporating managerial and organizational
processes.
(3) From a theoretical anchor to metaphors — the Low Church gains relevance but loses rigor: it relies on
metaphors (bathtub, tree) instead of a shared economic logic. This is the familiar rigor vs. relevance trade-off.
ToS 5.1 · Low Church RBV · 2/16
, HOW DOES THE LOW CHURCH EXPLAIN PERFORMANCE DIFFERENCES?
In terms of dynamics at the collective level: (investment in building) collective knowledge and the (process
of) organizational learning. (Lecture 9, slide 24)
ToS 5.1 · Low Church RBV · 3/16
Meeting 5.1
The Resource-Based View II
The Low Church: Knowledge & Capabilities
Dierickx & Cool (1989) Grant (1996) Prahalad & Hamel (1990) Case: PTT Post
Contents
1. The big picture: why a "Low Church"?
2. Dierickx & Cool (1989): asset stock accumulation
3. Grant (1996): the knowledge-based view
4. Prahalad & Hamel (1990): core competencies
5. The main theme: complementarities (Principle 5)
6. Case: PTT Post
7. High vs. Low Church — study question 9
8. Definition list
Sources: Lecture 9 slides (ToS 5.1 recap), ToS slides "Knowledge and capabilities" & "Core
competencies", Dierickx & Cool (1989), Grant (1996), Notes on lectures (Lecture 9), Reading guide,
Study guide 2026-27, Case PTT Post. Exam: 12 October 2026.
ToS 5.1 · Low Church RBV · 1/16
, 1. The big picture: why a "Low Church"?
Up to this point the course discussed positional views (Porter, High Church RBV, added value view). Their
managerial message: build a position of competitive bargaining power — higher willingness-to-pay and/or lower
economic costs — through a favourable resource position. But how do firms get into these favourable (resource)
positions? That is the question of the Low Church. (Lecture 9 slides 7–8)
Factor market Product market
imperfections imperfections
FIRM
Resources Products
= black box
costly-to-copy resources superior economic value
Resource-based view Positioning view
Figure 1 — The view of the firm in neoclassically grounded theories (Lecture 9, slide 13). The firm itself stays a black box.
Limitations of the neoclassical model Three (partial) solutions
Firm as black box – productive knowledge is outside Limitation Solution
the analysis
Static equilibrium logic – preferences and Black box Knowledge & capabilities views (Dierickx
productive knowledge are treated as given & Cool 1989; Grant 1996) — this meeting
Firm as unitary agent – value appropriation inside Static Dynamic capabilities view (Teece et al.
the firm is ignored 1997) — meeting 5.2
The High Church RBV (and the added value view) Unitary Bargaining view (Coff 1999) — meeting
import these limitations. agent 3.2
The RBV family
Branch Strands & key authors Logic
High Church Factor market competition (Barney 1986) Neoclassical, equilibrium; resources
Core RBV (Barney 1991; Peteraf 1993; Peteraf & bought in (imperfect) factor markets;
Barney 2003) Ricardian rent
Low Church Capabilities view (Dierickx & Cool 1989) Opens the black box, dynamic,
Knowledge-based view (Grant 1996) process-based; resources must be
Dynamic capabilities view (Teece et al. 1997) built
Popular versions Prahalad & Hamel (1990) core competencies; Managerial "translations" of the Low
Stalk, Evans & Shulman (1992) organizational Church ideas
capabilities
The High/Low Church terminology comes from Gavetti & Levinthal (2004) (Reading guide, meeting 2.1).
Three shifts in the Low Church (1) From "resource picking" to "capability building" — flows (asset accumulation)
rather than stocks (Dierickx & Cool); "resources that must be built because they cannot be bought" (Teece et al.
1997).
(2) Opening the black box & from static to dynamic arguments — incorporating managerial and organizational
processes.
(3) From a theoretical anchor to metaphors — the Low Church gains relevance but loses rigor: it relies on
metaphors (bathtub, tree) instead of a shared economic logic. This is the familiar rigor vs. relevance trade-off.
ToS 5.1 · Low Church RBV · 2/16
, HOW DOES THE LOW CHURCH EXPLAIN PERFORMANCE DIFFERENCES?
In terms of dynamics at the collective level: (investment in building) collective knowledge and the (process
of) organizational learning. (Lecture 9, slide 24)
ToS 5.1 · Low Church RBV · 3/16
