Strategic Management Journal. Antecedents of temporary advantage, страница 8

The early roots of resource-based temporary advantages

At the same time, various strategy researchers (D'Aveni, 1994; Eisenhardt and Martin, 2000) argued that, at the firm level, achieving and sustaining competitive advantage using resources in today's highly dynamic (or hypercompetitive) environments is difficult, if not impossible. For example, technological resources are easily imitated or replaced in many high tech industries. Diffusion of resources throughout an industry is often rapid (Brown and Eisenhardt, 1998). Because resources are quickly copied, substituted, or made obsolete, firms can look forward to a series of temporary advantages only as existing resources lose their value and new ones are needed to replace the old ones (MacMillan, 1989; D'Aveni, 1994).

Looking at resources over time, Helfat and Peteraf (2003) discussed how resources and capabilities have a life cycle, and, of course, the product life cycle literature suggests that firms must change resources over time as their products grow, mature, rejuvenate, or phase out. Even the static resource-based view of the firm questions the sustainability of resources. The mantra calling for the leveraging of core competencies (Prahalad and Hamel, 1990) makes one wonder: if the resource can be imitated, transferred, and become less rare by diffusion throughout an organization, then how is the resource sustainable due to rarity, nontransferability, and inimitability within the industry? Additionally, Audia et al. (2000), discussing the internal success cycle of firms, introduced the pattern called the paradox of success. The paradox lies in the fact that the very success that organizations strive to achieve plants the seed of their possible future decline. Once a firm achieves success, its natural tendency is to continue to exploit the resources that worked in the past. Such success-persistence-success cycles, however, become self-destructive when radical external changes impose the need to use new resources. After a period of positive performances, organizations may lose the ability to recognize when it is time to abandon previously effective resources. In sum, numerous explanations are emerging for the temporary nature of resource- and capability-based advantages.

Moreover, resource management is critical to value creation because using resources is, at least, as important as possessing them (Penrose, 1959). After criticizing the RBV for its oversight of dynamism, environmental contingencies, and the role of managers, Sirmon, Hitt, and Ireland (2007) point out the strengths and weaknesses of firms' dynamic capabilities. Heterogeneity in firm outcomes under similar initial conditions may result from managerial errors in the structuring, bundling, and leveraging of resources. This view suggests that resource-based advantages may be unsustainable, and it undermines one of the core assumptions of the RBV. In other words, there are several alternative explanations for heterogeneity among performance outcomes across firms other than heterogeneity in the distribution of resources that are valuable, rare, inimitable, imperfectly immobile, and nonsubstitutable (Barney, 1991; Peteraf, 1993). And these explanations suggest the difficulty in sustaining resource- and dynamic capability-based advantages.

Eisenhardt and Martin (2000) pointed out that multiple firms possess effective dynamic capabilities that have common features. Effective dynamic capabilities as resources are internal and external (Zahra and Nielsen, 2002) sources of competitive advantage. This stance suggests that firms are more homogeneous, fungible, equifinal, and substitutable than usually assumed (Eisenhardt and Martin 2000). In dynamic markets, dynamic capabilities are a necessity to survive; so many firms must acquire or develop them. These capabilities resemble the concept of routines (Winter, 2003)—that is, they are detailed processes with predictable outcomes and an evolutionary emphasis on creating new resources or resource combinations. It is often the role of high-level executives to create dynamic capabilities to implement high-level internal routines (Winter, 2003). Thus, compared to the traditional RBV, the dynamic capabilities literature suggests that dynamic capabilities can and do diffuse throughout industries, otherwise firms would decline and disappear due to their inability to adapt to changing environments. This suggests that the uniqueness of dynamic capabilities erodes over time, forcing firms to learn new capabilities to stay ahead. When such capabilities are improved by several parties in the market, what happens? Perhaps, the level of rivalry and innovativeness in the market continues to escalate, making dynamic capabilities the instrument of ever greater chaos. Or perhaps the dynamic capabilities get diffused and become necessities for survival. Either way, dynamic capabilities are not necessarily focused on building sustainable advantages. They may create sequences of temporary advantages or their ability to create sequences of advantages may fade over time.