CA Inter P6 · Chapter 12 · Question 6 of 10
The distinction between a firm's resources and its capabilities is best expressed as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Resources are the assets the firm owns or controls, while capabilities are its ability to combine and use those resources effectively
Explanation
Resources are inputs such as plant, finance, people, brands and technology. Capabilities refer to the firm's capacity to deploy and coordinate these resources through its processes and routines to achieve a desired result. Two firms with similar resources may perform very differently because of differences in capability.
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