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Compare and contrast the I/O Model of Above-Average Returns with the Resource-Based Model of Above-Average Returns. Recognize the assumptions of each before answering the discussion question.
Note: These models challenge the manager to seek out the greatest profit potential and then learn how to use the resources to implement value-creating strategies assumed the characteristics of the industry.
But to use these strategies it is assumed that the decision makers (managers and leaders) are rational and committed to acting in the firm’s best interests.
If you were the manager implementing these models how could you use them in the company’s best interests? Could managers use them “against the company’s best interests.” If you saw the models being implemented in an unethical way, what action would you take?
Finally, explain how these models affect the strategic management process of the company.