Law as a Source of Value Creation in Firms

Abstract

This chapter highlights how law can directly affect all parts of a firm’s value chain, from human resource management to marketing and sales. Legal resources such as intellectual property rights, competition law, and contracts play a crucial role in creating and protecting value. Thus, this chapter explores how law contributes to value creation and capture in firms, drawing from various theoretical frameworks, including the resource-based view and dynamic capabilities approach. This study demonstrates how legal resources permeate throughout Porter’s value chain, influencing operational effectiveness from human resource management to marketing and sales activities. Particular attention is given to three key legal mechanisms: intellectual property rights, which protect innovation and creative assets; competition law, which regulates market dynamics and foster competitive positioning; and contractual frameworks, which facilitate value capture and strengthen stakeholder relationships. By conceptualizing law as a strategic resource rather than merely a compliance requirement, this analysis reveals how legal astuteness can enhance firm performance and sustainable competitive advantage in global markets. Ultimately, this chapter contributes to both management and legal literature by bridging the gap between legal theory and strategic management, while offering practical insights for executives seeking to leverage legal resources for value creation.