Competitive advantage: logical and philosophical considerations
Article first published online: 31 JUL 2001
Copyright © 2001 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 22, Issue 9, pages 875–888, September 2001
How to Cite
Powell, T. C. (2001), Competitive advantage: logical and philosophical considerations. Strat. Mgmt. J., 22: 875–888. doi: 10.1002/smj.173
- Issue published online: 31 JUL 2001
- Article first published online: 31 JUL 2001
- Manuscript Accepted: 12 DEC 2000
- Manuscript Received: 27 AUG 1999
- competitive advantage;
- resource-based view
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 justification, particularly in light of its centrality in strategy research and practice. As it happens, the core hypothesis—that competitive advantage produces sustained superior performance—finds little support in formal deductive or inductive inference, and the leading theories of competitive advantage incorporate refutation barriers that preclude meaningful empirical tests. This article explores the logical and philosophical foundations of the competitive advantage hypothesis, locating its philosophical foundations in the epistemologies of Bayesian induction, abductive inference and an instrumentalist, pragmatic philosophy of science. Copyright © 2001 John Wiley & Sons, Ltd.