Resource-Based View, Knowledge-Based View and the Performance of Software Development Companies: A Study of Brazilian SMEs

Software development companies face a globalized, highly competitive and turbulent environment, where efficiency, efficacy and innovation capacity are critical for survival. In this context, small and medium enterprises (SMEs) tend to suffer the most due to the scarcity of resources to which they are usually subjected and their dependence on a few more powerful customers. This paper describes the elaboration and test of a model that draws on the resource-based view and knowledge-based view to explain the differences in performance of software SMEs. The analysis of data collected from 265 Brazilian companies suggests that: absorptive capacity contributes significantly to the development of a company’s stock of technological knowledge; the flexibility of the IT infrastructure, managerial capacity, and IT technological knowledge are strong predictors of software development performance; and organizational performance is positively influenced by software development performance and managerial capacity. The implications of these findings are then discussed.