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The Ressource-Based Tangle: Towards a Sustainable Explanation of Competitive Advantage

Author

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  • Nicolai J Foss
  • Thorbjørn Knudsen

Abstract

The arguably dominant contemporary approach to the analysis of sustained competitive advantage is the resource-based view. Taking Barney (1991) and Peteraf (1993) as representative summary statements of the view, we argue that much resource-based research rests on partial, implicit and problematic assumptions, and that this has led to conclusions that are much less general than the proponents of the view believe. As an example, the widely cited value-rareness-inimitability or heterogeneity-immobility-ex post and ex ante limits to competition lists do not stand up to scrutiny. In general, the view suffers from a confusion of what are necessary conditions for the expression of sustained competitive advantage and what are additional conditions which only serve to give the expression of sustained competitive advantage a specific form. We argue that there are only two necessary conditions for the expression of sustained competitive advantage, namely uncertainty and immobility, and that all other conditions are additional.

Suggested Citation

  • Nicolai J Foss & Thorbjørn Knudsen, "undated". "The Ressource-Based Tangle: Towards a Sustainable Explanation of Competitive Advantage," IVS/CBS Working Papers 00-1, Department of Industrial Economics and Strategy, Copenhagen Business School.
  • Handle: RePEc:ivs:iivswp:00-1
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. G.C. Archibald & B.C. Eaton & Richard Lipsey, 1982. "Address Models of Value Theory," Working Papers 495, Queen's University, Department of Economics.
    3. Amir, Rabah & Wooders, John, 2000. "One-Way Spillovers, Endogenous Innovator/Imitator Roles, and Research Joint Ventures," Games and Economic Behavior, Elsevier, vol. 31(1), pages 1-25, April.
    4. Demsetz, Harold, 1982. "Barriers to Entry," American Economic Review, American Economic Association, vol. 72(1), pages 47-57, March.
    5. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
    6. Joseph Farrell & Hunter K. Monroe & Garth Saloner, 1998. "The Vertical Organization of Industry: Systems Competition versus Component Competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(2), pages 143-182, June.
    7. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 709-724.
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    Citations

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    Cited by:

    1. Michael Christensen & Thorbjørn Knudsen, 2006. "Organizational Design and Resource Evaluation," DRUID Working Papers 06-05, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. De Castro, Julio O. & Balkin, David B. & Shepherd, Dean A., 2008. "Can entrepreneurial firms benefit from product piracy?," Journal of Business Venturing, Elsevier, vol. 23(1), pages 75-90, January.
    3. repec:spr:manint:v:47:y:2007:i:2:d:10.1007_s11575-007-0016-2 is not listed on IDEAS
    4. Giovanni Bronzetti & Romilda Mazzotta, 2015. "Business succession and Intellectual Capital Management in family firms," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2015(1), pages 45-72.
    5. J. Michael Haynie & Dean A. Shepherd & Jeffery S. McMullen, 2009. "An Opportunity for Me? The Role of Resources in Opportunity Evaluation Decisions," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 337-361, May.
    6. Nicolaï Foss & Nils Stieglitz, 2012. "Modern Resource-based Theory(ies)," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 20 Edward Elgar Publishing.
    7. Lillis, Bob & Sweeney, Mike, 2013. "Managing the fit between the views of competitive strategy and the strategic role of service operations," European Management Journal, Elsevier, vol. 31(6), pages 564-590.
    8. Kraaijenbrink, Jeroen & Spender, JC & Groen, Aard, 2009. "The resource-based view: A review and assessment of its critiques," MPRA Paper 21442, University Library of Munich, Germany.
    9. Latukha, M. & Veselova, A. & Selivanovskikh, L., 2015. "Talent management practices in emerging market firms: Research agenda," Working Papers 6428, Graduate School of Management, St. Petersburg State University.

    More about this item

    Keywords

    firm strategy; competitive advantage; resources;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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