Sustainable development and sustainability of competitive advantage: A dynamic and sustainable view of the firm

Joan E. Ricart (), Miguel A. Rodríguez () and Pablo Sanchez ()
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Joan E. Ricart: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Miguel A. Rodríguez: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Pablo Sanchez: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

No D/462, IESE Research Papers from IESE Business School

Abstract: Does the need for sustainable development hinder businesses' ability to create value? Is firms' competitiveness negatively affected by considering that need? Evidence that many of today's economic development practices are causing negative environmental and social side-effects continues to pile up. Yet to change the belief that markets and prices by themselves can, must and will take care of any negative impact that companies have on society is a tough objective. To prove that it is possible to do well by doing right, and that, in the long term, the only way to do well is by doing right, is a Herculean task. The purpose of this paper is to contribute to this task. Since the core idea of the paper relates to the role of business in society at large, first of all the authors quickly review the literature concerning this issue. Then, drawing on the resource-based view of the firm and sustainable development literature, the paper presents a proposal for a dynamic and sustainable view of the firm, explaining the normative and instrumental character of its foundations. It shows how sustainable development changes the competitive landscape and in so doing influences the way in which companies develop their resources, capabilities and activities, fostering the persistence of competitive advantages based on knowledge and innovation. The authors conclude by highlighting the changes in corporate governance which inherently come with this new view of the firm.

Keywords: Sustainable development; corporate governance; knowledge management (search for similar items in EconPapers)
JEL-codes: M10 M14 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2002-04-15
New Economics Papers: this item is included in nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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