What is a resource?

• A. The capacity of a firm to perform some internal activity competently
• B. A cross-functional capability
• C. A competitive asset that is owned or controlled by a company
• D. A social relationship network

Answer: (A)

Resources are the things a firm can draw on to carry out its activities. The best answer captures the essence by describing a resource as the capacity of the firm to perform an internal activity competently. That means a resource is the internal capability—the tool, skill, or system—that lets the firm execute tasks effectively. This capacity can be tangible or intangible and is what underpins the firm’s ability to organize, operate, and compete. The other ideas are related but not the general definition: a cross-functional capability is a specific ability built from resources; a competitive asset owned or controlled emphasizes value and ownership rather than the basic notion of the resource itself; a social relationship network is a particular type of resource but is more narrow than the overall concept.