Strategic Management Journal. Antecedents of temporary advantage

The age of temporary advantage Richard A. D'Aveni^1,*,  Giovanni Battista Dagnino², Ken G. Smith³

Strategic Management Journal

Special Issue: The Age of Temporary Advantage?

Volume 31, Issue 13, pages 1371–1385, December 2010

Abstract

1.Top of page

2.Abstract

3.Antecedents of temporary advantage

4.The management of temporary advantage

5.Consequences of temporary advantage

6.The field of strategic management without sustainable advantage

7.SUMMARY OF EXTANT WORK ON TEMPORARY ADVANTAGE

8.THIS SPECIAL ISSUE'S UNIQUE CONTRIBUTIONS TO TEMPORARY ADVANTAGE

9.THE FUTURE OF TEMPORARY VERSUS SUSTAINABLE ADVANTAGE: MUTUALLY EXCLUSIVE OR SIMULTANEOUSLY COEXISTENT?

10.REFERENCES

The creation and management of temporary competitive advantages has emerged as an alternative to sustainable models of competitive advantage in the strategy literature. We review the literature and discuss questions related to the antecedents, consequences and the management temporary advantage in the introduction of this special issue. The overall goal is to ask: What would the field of strategic management look like if sustainable advantages did not exist? We summarize the papers published in this special issue and highlight directions for future research. Copyright © 2010 John Wiley & Sons, Ltd.

The goal of this special issue is to develop theory and empirical evidence about how organizations can successfully compete, evolve, and survive when firm-specific advantages are not sustainable or enduring, but more temporary in nature. Such conditions may exist due to fast-paced competitive actions and counter responses among rivals, or where frequent endogenous and exogenous competence destroying disruptions and discontinuities make sustaining one's advantage impossible. The primary goal is to ask what the field of strategy would look like if sustainable competitive advantage did not exist.

Almost since the onset of strategic management scholarship, the field has assumed that sustainable competitive advantage exists (Rumelt, Schendel, and Teece, 1994). Considerable effort has been dedicated to defining and empirically demonstrating the existence of sustainable advantage. However, recent studies have begun to suggest that sustainable competitive advantage is rare and declining in duration (Ruefli and Wiggins, 2002). Other studies have found anecdotal and more rigorous empirical evidence of the concatenation of temporary advantages (D'Aveni, 1994; Wiggins and Ruefli, 2005). And there is growing empirical evidence that the volatility of financial returns is increasing, suggesting that the relative importance of the temporary (volatile) component of competitive advantage is rising when compared to the long run component of sustainable competitive advantage (Thomas and D'Aveni, 2009). Finally, there is increased attention to the ethical consequences of the sustainable advantages derived from monopoly positions and oligopolistic behavior (DeCelles, Donaldson, and Smith, 2007). Considerable thought has also been given to the idea that continuous strategy innovation is necessary in disruptive environments. The core argument of this stream of enquiry is that the unremitting pursuit of strategic change is necessary for success, especially in nascent, emerging, high-tech, or other high velocity environments, where the structure and the rules of the game are unstable or erratic (Christensen, 1997; D'Aveni, 1994; Hamel, 2000; Markides, 1999).

Interestingly, some argue that disruptive environments never reach maturity; they self-reproduce, cannibalize, innovate, and self-perpetuate by incessantly innovating, reviving, and reinitiating the initial stages of different waves of industry and product life cycles (Christensen, 1997). The authors in this research stream implicitly suggest that sustainable advantage does not necessarily exist, except for saying that dynamic capabilities and organization flexibility can occasionally be sources of sustainable advantage. Yet, there is no consistent body of evidence that dynamic capabilities are sustainable over extended periods of time and in different contexts, and there is some evidence that initiative fatigue or complacency and inertia undermine the sustainability of dynamic capabilities. Accordingly, firms can either become exhausted by continuous transformation and innovation or get complacent by success and turn out to be blinded and myopic to requisite environmental change (Audia, Locke, and Smith, 2000).

The analysis of temporary advantage can be partitioned into three main parts: (1) causes or antecedents, (2) management of temporary advantages, and (3) consequences of temporary advantage.

Antecedents of temporary advantage

1.Top of page

2.Abstract

3.Antecedents of temporary advantage

4.The management of temporary advantage

5.Consequences of temporary advantage