On the Origins of Competitive Advantage: Strategic Factor Markets and Heterogeneous Resource Complementarity

Strategic factor market theory suggests that, excluding luck, superior expectations are necessary for firms to appropriate gains from valuable resources. I argue that this is only true in the absence of heterogeneous resource complementarity. Extending factor market theory, I show that firms can pro...

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Bibliographic Details
Published in:The Academy of Management review 2009-07, Vol.34 (3), p.463-475
Main Author: Adegbesan, J Adetunji
Format: Article
Language:English
Subjects:
Business management
Business studies
Chance
Competitive advantage
Complementarity
Discriminant analysis
History
Market theory
Markets
Power
Resource management
Simplicity
Strategic management
Theory
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Summary:Strategic factor market theory suggests that, excluding luck, superior expectations are necessary for firms to appropriate gains from valuable resources. I argue that this is only true in the absence of heterogeneous resource complementarity. Extending factor market theory, I show that firms can profit when they exhibit superior complementarity to target resources, and I determine the components of appropriated value in such markets. I thus demonstrate the power and simplicity of coalitional analysis while shedding light on central issues in strategic management.
ISSN:0363-7425
1930-3807
DOI:10.5465/AMR.2009.40632465