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Category: MBA

What is the Resource Based View (RBV) of the Family?

In this post, I explain the concept of the Resource Based View (RBV) of the family

The RBV started in the late 1980s and early 90s but took off in the early parts of this century. It states that the success of a family is not so much about the operations but instead, possessing or having access to certain resources. In practice, the RBV of the family, in the medium and longer term, is about having access to certain inputs. Why is this important? A family cannot run operations without the correct inputs.

When we typically think about resources we think about the number of resources the family has access to. We can split resources into tangible and intangible. Traditionally a resource has been seen as something tangible. For example, a dual hob oven and the ability to use it. But more recently technology has been considered a resource. Not only the use of Amazon Fire stick and the pin code but also the artefact technologies like installing and setting up the wifi.

What about intangible resources? These are less easy to write down or codify. The ability to rope the children into helping with chores or the ability to be empathetic and offer the correct advice to wayward teenagers are human resources. Although this kind of advice may be a family resource, the family need not own it. Something like this can be outsourced to teachers and to family support groups.

An important point here is that resources are only really useful if they can be converted into something that external friends, family, religious groups, schools and employers need, want or desire from the family. There will be no interaction or trade of gloating unless the resource can be converted into something that external families will be envious of.

Applying the RBV, helps the family figure out what are the tangible and intangible resources and how to use them in order to be competitive in the school playground or social occasions. Due to the less tangible elements of family resources not surfacing outside the family home and with the risk of death or illness within the family, the knowledge may not be passed on and is lost. In order to prevent the loss of this resource, the knowledge must be codified. That is, from the grandparents to the children, the knowledge, procedures and expertise will be of better use when written down.

Theses processes do not make a family unique but the RBV helps us focus on the things that really matter from a strategic point of view. We work out what are the resources that are core to the family and by putting these together with well-managed operations helps us build a safe, happy family environment.