Academic journal article Management Revue

Inter-Firm Resources and Sustained Competitive Advantage

Academic journal article Management Revue

Inter-Firm Resources and Sustained Competitive Advantage

Article excerpt

Inter-Firm Resources and Sustained Competitive Advantage**

Resource-oriented perspectives of strategic management are on the way to discovering a topic to which little attention has been paid so far within their own ranks: inter-firm networks. In this article, it is argued that the resource- and competence-based view despite its new facet of analysis - falls back on a traditional firm-focused explanation. Conversely, the relational view, the youngest branch of strategic management, follows completely new explanatory paths. Here, an inter-firm focus is established. Overall, there are two related, but diametrically opposed strategic management approaches, each assigning a different kind of importance to the meaning of competition in the context of analysing cooperative inter-firm relations.

Key words: Resource-based view, relational view, networks, network resources, social network theory

1. Introduction

For a long time, industrial organisation economics-driven research dominated in strategic management, and thus a market-oriented and externally aligned explanation of the achievement of sustained competitive advantage of firms. However, since the early 1990s, there has been an essential change in the literature on strategic management. Today we can see a dominance of resource-oriented approaches in strategic management. Moreover, at present we not only find a new era of resourcebased strategic analysis, but also the birth and first steps of another resource perspective: the relational view. Whereas the traditional, resource-based view deals with supernormal earnings resulting from resources controlled by a single firm (Wernerfelt 1984; Dierickx/Cool 1989; Prahalad/Hamel 1990; Barney 1991; Teece et al. 1997), the relational view explains that long-term profits are essentially based on network relations, or more precisely on resources that are deeply embedded in interfirm relations (Dyer/Singh 1998). However, both resource perspectives understand exchange relations between firms as a relevant strategic medium for achieving superior resource-based performance (Ireland et al. 2002; Duschek 2002). Admittedly, the understanding of inter-firm cooperation within the resource- and competence-based view is under-explored to date, and the relational view is at an early stage of development. In the following, both resource perspectives are discussed with reference to their idiosyncratic contribution towards understanding cooperative relations between organisations. It will be shown that the relational view goes beyond the value appropriation focus of traditional resource-based view analysis of inter-firm cooperation and offers a distinct strategic focus on how firms create resource-based rents. Furthermore, the essential implications of both approaches for the strategic management of resources in collaborations are also shown. All things considered, the prime objective of this article is to discuss the crucial, but hitherto underexposed differences between a firm- and a network-focused localisation of above normal firm-- profit creation within the scope of inter-firm relations. By contrast to the resourceand competence based view, it will also show that the relational view proposes not only a novel unit, but also a novel object of analysis with which to explain sustained competitive advantage within strategic management theory: network resources. Last but not least, insights of social network theory (Burt 1992; Coleman 1990) are used to explain the main differences between firm- and network-oriented rent types.

2. Inter-Firm Cooperation in the Light of Resource-Based Approaches: Firm-Specific Resources and Self-Interest Oriented Learning Alliances

The resource-based view of the firm (RBV) and its less formal and more management-oriented derivative, the concept of core competencies, have become the leading research paradigms in the field of strategic management (Bresser et al. 2000). Contrary to the '(industry)structure-conduct-performance paradigm' of industrial organisation economics (Bain 1968; Porter 1985, 1991), these strategic concepts explain the competitive advantage of firms primarily by their internal resources and capabilities, i. …

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