We present an ordinal method for studying persistence in firm profitability. The method is based on the degree of stability in a ranked performance distribution over time. The method gives a numerical index of rank friction (Rf) that can be applied to any ranked data over any period of time. Rf...

This chapter explores the origins of the theme of competitive advantage in 19th and early 20th century economics. This theme, which forms the core of modern Strategic Management, was a battleground for debates about the value of abstract theory versus observations about real-life events....

Firms sometimes fail to capture opportunities, fail to imitate perfectly-imitable resources, and do not solve their solvable problems. The persistence of errors creates intra-industry performance variation that is usually attributed to the competitive advantages of successful firms. However,...

We integrate and extend research on causal ambiguity, indicating the principal causal paths from ambiguity to performance and discussing the connections between empirical findings and resource-based expectations. We then develop the linkage between causal ambiguity and management perception....

In a recent paper, Powell (2003) studied 20-year performance in 21 industries, using an ordinal performance measure (‘wins’), and the Gini coefficient as a measure of competitive dominance. The findings suggest that firm performance is statistically indistinguishable from performance in...

Professor Arend's critique raises fundamental epistemological issues for strategy research, particularly the concern that pragmatist philosophy forecloses access to objective truth and scientific progress. This response discusses the empiricist underpinnings of pragmatism, and addresses...

Strategy research explains why some firms outperform others, typically using profit rates, shareholder returns, and other continuous dependent variables. This paper investigates winning as the dependent variable, as measured by distributions of annual industry leadership in profits and returns...

The recent increase in philosophy of science articles in strategic management reflects researchers' rising concerns with understanding and securing the field's intellectual foundations. This article argues for a proactive approach to the philosophy of strategy, and for the rejection of...

Strategic management theories invoke the concept of competitive advantage to explain firm performance, and empirical research investigates competitive advantage and describes how it operates. But as a performance hypothesis, competitive advantage has received surprisingly little formal...

Epistemology is the study of knowledge - of what is known and how we know it. Organizational epistemology is dominated by the dualist opposition of objectivist and subjectivist philosophies of science. Objectivists accept knowledge claims as potentially true and warranted on objective evidence,...