The Resource-Based View of the Firm

In this essay, the authors discuss the link between the new resource-based view of the firm and the old structure-conduct-performance (S-C-P) paradigm. The authors find that the resource-based view of the firm, like the S-C-P paradigm, is based on the assumptions that demand is known and constant and that competition is a state. This limits the applicability and predictability of the model. Therefore, to further the positive and normative research goals of the strategic management discipline, these assumptions must be abandoned. The authors suggest adopting a model based on uncertain, constantly changing demand and competition as a process. The authors show how this will allow us to get inside the "black box" and examine the essential role of the manager in sustaining competitive advantage.