Performance forecasts in uncertain environments: Examining the predictive power of the VRIO-framework

Christian Powalla and Rudi K. F. Bresser

No 2010/22, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: 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.

Date: 2010
New Economics Papers: this item is included in nep-cse, nep-exp and nep-for
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:201022

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