When Competitive Advantage Doesn't Lead to Performance: The Resource-Based View and Stakeholder Bargaining Power

Abstract

What if rent from a competitive advantage is appropriated so it cannot be observed in performance measures? The resource-based view was not formulated to examine who will get the rent. Yet, this essay argues that the factors leading to a resource-based advantage also predict who will appropriate rent. Knowledge-based assets are promising because firm-specificity, social complexity, and causal ambiguity make them hard to imitate. However, the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors. This essay integrates the resource-based view with the bargaining power literature by defining the firm as a nexus of contracts. This new lens can help to explain when rent will be generated and, simultaneously, who will appropriate it. In doing so, it provides a more robust theory of firm performance than the resource-based view alone. It is also suggested that this lens might be useful for examining other theories of firm performance.

Firm‐specific knowledge resources and competitive advantage: the roles of economic‐ and relationship‐based employee governance mechanisms

“…In summary, the resource-based view places human resources among the most important resources available to a firm, and central to the debate about how firms achieve sustainable competitive advantage (Coff, 1999;Mahoney, 2005). Thus, the willingness of a firm's key employees to invest in essential firm-specific knowledge should be an important area of study in the evolving science of organization.…”

Interdependencies between People and Information Systems in Organizations

“…Organizations that are able to achieve greater degrees of fit are more likely to be able to generate value from resources (such as via employee contributions; Bandura 1977, 1986, Stajkovic and Luthans 1998) and appropriate value from these resources (Coff 1999;Blyler and Coff 2003, Coff, chapter 14 this volume) and, thereby, perform more effectively.…”

Resources to Form Logistics Capabilities- from the Perspective of a Small- or Medium-Sized Subcontractor

“…Some of the capabilities that the managers of Rimaster and Mekanotjänst emphasize (e.g., a "fleet-footed organization," rapid solutions and flexibility) are of a kind that could be considered cultural-perhaps an effect of having developed from a small firm in the hands of one owner for a long period of time. Barney (1996) and Coff (1999) both point out the importance of identifying competencies or success factors affecting the performance of a company, especially knowledge-based assets that are hard to imitate because of firm specificity, social complexity, and causal ambiguity. Note has managed to clarify the competencies of the company more clearly, in "productified" service offers.…”