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

Russell W. Coff
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Russell W. Coff: Goizueta Business School, Emory University, 1300 Clifton Road, Atlanta, Georgia 30322

Organization Science, 1999, vol. 10, issue 2, 119-133

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.

Keywords: Rent appropriation; Resource-based view; Bargaining power; Knowledge-based assets (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (227)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:10:y:1999:i:2:p:119-133

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