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Performance Persistence: A Literature Review and Insights for Sustained Competitive Advantage
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Author: Stav Fainshmidt, Florida International U.
Author: Aya S. Chacar, Florida International U.
Author: Yue Zhao, Florida International U.
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Performance persistence captures the temporal dynamics of organizational performance vis-a-vis competitors. As such, performance persistence research speaks to the loss or maintenance of a competitive advantage or disadvantage and is therefore uniquely positioned to help evaluate and refine theories of sustained competitive advantage. In this paper, we take stock of the extensive yet fragmented performance persistence literature by reviewing and synthesizing 131 relevant articles published over the last 38 years. We first summarize the theoretical logic underlying research on performance persistence, highlighting its relevance to theories of sustained competitive advantage. We then review the institutional, industry, organizational, and managerial drivers of performance persistence, as well as research examining the temporal dynamic of firm performance over time. Within each of these areas, we use our review and strategic management research to formulate a theory-based road-map for future performance persistence research. We also engage in a comparative discussion of the drivers of performance versus performance persistence, highlighting potential similarities and differences. In doing so, we provide an organized and cumulative account of the theoretical insights performance persistence research offers to strategy scholars interested in the sustainability of competitive advantage.
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Search Terms: Literature Review | Performance Presistence | Sustained Competitive Advantage
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Paper is No Longer Available Online: Please contact the author(s).
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Temporary Competitive Advantage: An Investigation into the Core of the Literature
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Author: Giovanni Battista Dagnino, U. of Catania
Author: Pasquale Massimo Picone, U. of Catania
Author: Giulio Ferrigno, U. of Catania
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Evidence of over 350 citations recorded by the articles published in the 2010 special issue on “The Age of Temporary Advantage” of the Strategic Management Journal shows that the inquiry on temporary nature of competitive advantage is an emergent research area in strategic management. They also exhibit that, most likely, it is going to be a significant research area for the coming years. To assess the current status of the literature as well as to fathom the directions and challenges of future research on temporary advantage, we review prior empirical research on temporary advantage so as to offer a conceptual map that provides a comprehensive appreciation of antecedents, processes, and consequences of temporary advantage. We then advance a research agenda on temporary competitive advantage.
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Search Terms: Temporary competitive advantage | technology turbulence | time compression
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Paper is No Longer Available Online: Please contact the author(s).
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The Cost of Accelerating Technology Transfer: An Empirical Analysis of Time Compression Diseconomies
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Author: Ashton Hawk, U. of Colorado, Boulder
Author: Goncalo Pacheco-de-Almeida, HEC Paris
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We empirically investigate acceleration costs in technology transfer via a replication of Teece’s (1977) early work on time-cost elasticities. Our dataset on the development of oil production facilities worldwide between 1997 and 2010 is similar to Teece (1977), but over 20 times larger. Our results contrast with previous studies. On average, the cost of accelerating technology transfer is negative: firms could have cut $7.2 million in costs by developing projects one month faster. For 87% of our projects, time compression diseconomies are not binding. Industry-average technology transfer inefficiencies are significant: over 36% of project time and costs are unnecessary delays and overspending. Finally, we estimate the determinants of time-cost elasticities. Our findings reassess firms’ capital allocation decisions and the role of time in Strategy theories.
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Search Terms: technology transfer | time compression diseconomies | time based competition
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Paper is No Longer Available Online: Please contact the author(s).
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Resource Allocation, Real Options, and Competitive Advantage: A Behavioral Approach
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Author: Michael J. Leiblein, The Ohio State U.
Author: John S. Chen, U. of Florida
Author: Hart E. Posen, U. of Wisconsin, Madison
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This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. We build on extant financial and managerial theories, real option theories of decision-making under uncertainty, and strategic factor market theories of competitive advantage. We observe that canonical real options theory assumes that markets are complete. Consequently, the decision-making challenges facing managers are trivial because spot markets provide objective information on which to base the option execution decision. Our theory, which relaxes the complete market assumption, emphasizes the importance of differences in information processing and belief updating across firms. Leveraging these insights, we argue that performance heterogeneity may arise because firms are differentially effective at executing real options in factor markets.
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Search Terms: competitive advantage, | real options, | strategic factor markets.
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Paper is No Longer Available Online: Please contact the author(s).
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