Causations, counterfactuals, and competitive advantage
By: DURAND, Rodolphe
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Contributor(s): VAARA, Eero.
Material type: 
ArticlePublisher: Bognor Regis : Wiley-Blackwell, Decembe 2009Strategic Management Journal 30, 12, p. 1245-1264Abstract: Causation is still poorly understood in strategy research, and confusion prevails around key concepts such as competitive advantage. In this paper, we define epistemological conditions that help dispel some of this confusion and provide a basis for more developed approaches. In particular, we argue that a counterfactual approach - one that builds on a systematic analysis of what-if questions - can advance our understanding of key causal mechanisms in strategy research. We offer two concrete methodologies - counterfactual history and causal modeling - as useful solutions. We also show that these methodologies open up new avenues in research on competitive advantage. Counterfactual history can add to our understanding of the context-specific construction of resource-based competitive advantage and path dependence, and causal modeling can help to reconceptualize the relationships between resources and performance. In particular, resource properties can be regarded as mediating mechanisms in these causal relationships.
Causation is still poorly understood in strategy research, and confusion prevails around key concepts such as competitive advantage. In this paper, we define epistemological conditions that help dispel some of this confusion and provide a basis for more developed approaches. In particular, we argue that a counterfactual approach - one that builds on a systematic analysis of what-if questions - can advance our understanding of key causal mechanisms in strategy research. We offer two concrete methodologies - counterfactual history and causal modeling - as useful solutions. We also show that these methodologies open up new avenues in research on competitive advantage. Counterfactual history can add to our understanding of the context-specific construction of resource-based competitive advantage and path dependence, and causal modeling can help to reconceptualize the relationships between resources and performance. In particular, resource properties can be regarded as mediating mechanisms in these causal relationships.
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