Strategic Management Journal. Antecedents of temporary advantage, страница 7

Our review of the literature indicated that research has studied the temporary advantage(s) associated with strategic actions, resources, and performance. In addition, it has focused on a series or sequences of actions, resources, or performance over time. Other studies have focused on the erosion, self-cannibalization, duration, magnitude, and compression of a single action, resource, or superior performance; thus, creating the horizontal and vertical dimensions of Table 1.

Note that many other studies (e.g., population ecology, the literature on organizational decline, organizational flexibility or agility, and blind spots) could have been reinterpreted and placed in this matrix. And a deeper analysis of theories that assumes sustainable advantage might reveal even greater insights about temporary advantage. For example, looking at the loss of value, inimitability, nontradability, nonsubstitutability, or rarity of a resource might flip the static resource-based theory on its head—making it a theory of temporary advantage (D'Aveni, 1994). Similarly, focusing on overcoming entry barriers, strategies for enhancing the power of (or building cooperation with) buyers or suppliers, the use of substitutes, and escalating rivalry might also turn Porter's theory into a theory of temporary advantage (D'Aveni, 1994). However, we chose to include only the research that requires no (or the least) suspension of our beliefs in sustainable advantage for Table 1.

The early roots of action-based temporary advantages

Under the lens of action-based advantages, numerous theories and empirical studies have dealt with temporary advantages. The Schumpeterian theory of creative destruction describes rivalry between and among firms as an ‘incessant race to get or keep ahead of one another’ (Kirzner, 1973: 20)—if only to defend one's own leadership in a market. Especially in hypercompetitive dynamic markets, leading firms are constantly pursued by existing challengers that aggressively find new ways to destroy the competitive advantage of industry leaders (D'Aveni, 1994; Schumpeter, 1942).

The Carnegie School of the theory of the firm, such as Cyert and March (1963), introduced the concept of firms behavior to underline the need to maintain a persistent, but bounded, information flow that informs decision-making rules to achieve optimal outcomes, predict the behavior of rivals, and manage an organization rationally, just to maintain and replace eroding competitive advantages. In this view, firms engage in searches for opportunities, new actions, and new problems that can be solved. This suggests that advantages are temporary and begs the question of whether search routines are sustainable or just lucky in unpredictable environments. The aforementioned work by Smith and Cao (2007) explicitly deals with the role of search in creative actions.

Following this view, Nelson and Winter (1982) draw some intriguing conclusions concerned with the behavioral theory of the firm and connect it to their own evolutionary theory. Based on the idea that natural selection occurs internally within firms, some firms survive in a competitive environment while others perish. In their opinion, natural selection fosters the development of new routines and strategies as well as the discard of obsolete routines and strategies (Winter 2003), suggesting that routines and strategies are only temporary if firms are to adapt and survive. They suggest that organizations are variable in time, as a result of organizational search for new solutions when the old ones fail to work.

Similarly, observing changes, uncertainty and disequilibrium in business environments, the Austrian school of economics (Kirzner, 1973, 1979; Jacobson, 1992) underscores market processes and entrepreneurial discovery. This more dynamic view emphasizes the existence of continuous innovation, flexibility, intertemporal heterogeneity, and unobservable influence of performance feedback as a continuous process of strategic windows that open for limited times.

The Maryland School of competitive dynamics, such as Chen (1996), analyzed the similarity between firms and the likelihood of increased rivalry. Assessing the market commonality and resource similarity between firms, Chen (1996) concluded that competitive tensions between firms are due to interdependence (such as similarities and commonalities) and realized that this interdependence gave rise to the potential for engaging in rivalrous behavior. In other words, firms do not compete unless they share markets and similar resources. Market commonality and resource similarity represent the two most relevant elements that make a firm unique or different from others. In one study, these overlaps in markets and resources caused leading firms to carry out less aggressive, simpler repertoires of action at a slower pace toward each other (Ferrier et al., 1999), perhaps due to mutual forbearance. But in other studies, the Maryland School found that aggressive behavior of challengers leads to better performance and the dethronement of industry leaders who are acting much more complacently (Ferrier et al., 1999). This stream of research adopted the view that the study of rivalry requires the diagnosis of patterns in observable activities, events, or behaviors over time using the chronological order of these events as data. This conceptualization of dynamic competitive strategy emphasizes interdependence among rivals, especially in terms of dyads of initiated actions and competitive responses that provided fleeting advantages (see also D'Aveni, 1994, chapter 1).