Early life and education
Jay Barney was born in Walnut Creek, California on October 8, 1954. He spent his formative years in San Bruno, California and graduated from San Carlos High School in San Carlos, California in 1972. He attended Brigham Young University in Provo, Utah where he majored in Sociology. He graduated from BYU, summa cum laude, in December 1974 and began the Ph.D. program in Sociology at Yale University in New Haven, Connecticut in 1976. By 1978, he had created a special joint Ph.D. degree in Sociology and Administrative Sciences at Yale. He finished this degree in 1982.
Barney joined the faculty at the Anderson Graduate School of Management at UCLA in 1980, moved to the Mays Business School at Texas A&M University in 1986, to the Fisher College of Business at the Ohio State University in 1994—where he held the Chase Chair for Excellence in Corporate Strategy, and to the Eccles School of Business at the University of Utah in 2012—where he held the rank of Presidential Professor and the Lassonde Chair in Social Entrepreneurship.
Barney is best known for his contributions to the resource-based theory of competitive advantage in the field of strategic management Resource-based View. The field of strategic management focuses on explaining why some firms outperform others. Research in this field was changed dramatically with the introduction of concepts from micro-economics by Michael Porter in 1979 and 1908 Building on the work of Joe Bain , Professor Porter developed tools for analyzing the competitive threats in an industry. Operationalized in his famous “five forces framework,” Porter’s Five Forces Professor Porter’s work could be used to explain why firms in some industries outperformed firms in other industries.
However, there is often substantial variance in the performance of firms within the same industry. For example, both Wal-Mart and Kmart operate in the discount retail industry, and yet Wal-Mart became one of the largest firms in the world, while at the same time, Kmart struggled with bankruptcy. A theory that used the structure of competition in an industry—such as Professor Porter’s theory—had little to say about such intra-industry variation in firm performance. Resource-based theory is designed to address this problem.
The main tenets of resource-based theory were developed in a series of articles by Professors Richard Rumelt , Birger Wernerfelt , Jay Barney , and Margie Peteraf . However, the theory grew in popularity and influence when Professor Barney published a paper on the resource-based view in 1991. This paper has become one of the most cited papers in the field of strategic management.
The central assumptions of resource-based theory are (1) that firms can vary in their resources and capabilities, and (2) that these differences can last over time. The reason differences in resources and capabilities can be stable often has to do with the nature of some of these resources and capabilities—their path dependence , their causal ambiguity , their tacitness , and so forth. These characteristics of resources and capabilities may create information asymmetries between firms that possess them and those that do not. These information asymmetries may make it costly for firms without certain resources and capabilities to imitate them. In addition, imitation can be costly—even if information asymmetries do not exit—because of these resource characteristics. For example, a disadvantage firm may know, with certainty, that its competitor’s success is due to its organizational culture—an example of a socially complex resource of capability—and not be able to change its own culture to imitate this successful culture.
Professor Barney’s 1991 paper developed a simple framework for distinguishing among several different types of firm performance—i.e., competitive disadvantage, competitive parity, temporary competitive advantage, and sustained competitive advantage competitive advantage—and identified the attributes of resources and capabilities that would make them costly to imitate. This framework has come to be known as the VRIO (Valuable, Rare, Costly to Imitate, and exploited by Organization). Resources that do not increase a firm’s revenues or decrease its costs as not valuable, and are a source of competitive disadvantage. Resources that are valuable but not rare are a source of competitive parity. Resources that are valuable and rare can be a source of temporary competitive advantage. Resources that are valuable, rare, and costly to imitate can be a source of sustained competitive advantage. Organization acts like an adjustment factor in this theory—enabling firms that should only have competitive parity to gain high level performance from their resources or leading firms with potentially higher levels of performance to lose that performance because they are poorly organized.
Resource-based theory dominated research in the field of strategic management from the early 1990s through 2015. It has also influenced a variety of other fields, including human resource management, information technology ; supply chain management ; and others.
In the mid-2000s, Professor[when?] Barney worked with Dr. Sharon Alvarez to develop a new theoretical approach to the study of entrepreneurship. Rather than assuming that entrepreneurial opportunities are formed by exogenous shocks to established markets or industries, this approach suggests that opportunities can also be endogenous to entrepreneurial action . By 2015, this “creation view” of entrepreneurship was beginning to gain traction among entrepreneurship scholars.
Research topics that build directly on resource-based theory include The Knowledge based Theory of the Firm, Relational View, Dynamic Capabilities, theories of core competence, and competitive heterogeneity.
Awards and honors
- Academy of Management Scholarly Contributions Award (2010)
- Irwin Outstanding Educator Award, Business Policy and Strategy Division of the Academy of Management (2005)
- Fellow, Academy of Management (2001)
- Fellow, Strategic Management Society (2007)
- Ph.D. (Honorary) Universidad Pontificia Comillas, Madrid, Spain (2011)
- Ph.D. (Honorary) Copenhagen Business School, Copenhagen, Denmark (2008)
- Ph.D. (Honorary) Lund University, Lund, Sweden (1997)
- Jay B. Barney (1986) “Organizational Culture: Can It Be a Source of Sustained Competitive Advantage?” Academy of Management Review. 11: 656-665.
- Jay B. Barney (1986) “Strategic Factor Markets: Expectations, Luck, and Business Strategy,” Management Science, 32(10): 1231-1241.
- Jay B. Barney (1988) “Returns to Bidding Firms in Mergers and Acquisitions: Reconsidering the Relatedness Hypothesis,” Strategic Management Journal, 9, Special Issue: 71-78.
- Jay B. Barney (1991) “Firm Resources and Sustained Competitive Advantage,” Journal of Management, 17(1): 99-120.
- Jay B. Barney and Mark Hansen (1994) “Trustworthiness as a Source of Competitive Advantage,” Strategic Management Journal, Vol. 15: 175-190.
- Jay B. Barney (1995) “Looking Inside for Competitive Advantage,” Academy of Management Executive, 9(4): 49-61.
- Bill Fuerst, Jay B. Barney, and F. Mata (1996) “Information Technology and Sustained Competitive Advantage: A Resource-Based Analysis,” MIS Quarterly, 19: 487-505.
- Jay B. Barney and Patrick Wright (1998) “On Becoming a Strategic Partner: The Role of Human Resources in Gaining Competitive Advantage,” Human Resource Management, 37: 31-46.
- Sharon A. Alvarez and Jay B. Barney (2007) “Discovery and creation: alternative theories of entrepreneurial action.” Strategic Entrepreneurship Journal 1(1–2): 11–26.
- Sharon A. Alvarez, Jay B. Barney, and Phillip Anderson (2012) “Forming and Exploiting Opportunities: The Implications of Discovery and Creation Processes for Entrepreneurial and Organizational Research,” Organization Science, 24(1): 301 -317.
- Jay B. Barney and William G. Ouchi. (1986) Organizational Economics: Toward a New Paradigm for Studying and Understanding Organizations. San Francisco: Jossey-Bass.
- Jay B. Barney and Ricky Griffin (1992) Managing Organizations: Strategy, Structure, and Behavior. Boston: Houghton-Mifflin.
- Jay B. Barney (2010) Gaining and Sustaining Competitive Advantage, currently in 4th edition, Upper Saddle River, NJ: Pearson/Prentice Hall. (Translated into Japanese, Chinese, Italian)
- Jay B. Barney and William Hesterly. (2014) Strategic Management and Competitive Advantage. Currently in 5th edition. Upper Saddle River, NJ: Prentice Hall. (Translated into Chinese, Korean)
- Jay B. Barney and Delwyn Clark (2007) Resource-based Theory: Creating and Sustaining Competitive Advantage. London: Oxford University Press, 2007. (Translated into Chinese)
- Jay B. Barney and Trish Clifford (2010) What I Didn’t Learn in Business School: Making Strategy Work in the Real World. Cambridge: Harvard Business Review Press. (Translated into Korean, Hungarian, Chinese, Polish)