Sustained Competitive Advantage and Complexity: A Configurational Approach

Abstract

In recent years, Qualitative Comparative Analysis (QCA) has emerged as a research approach to get insight into social science and business complexity. In contrast to the inferential methods that measure the net effect of an independent variable into a dependent variable, the QCA approach uncovers the necessary and sufficient conditions leading to a desired outcome. This paper discusses complexity in social science and business from the QCA perspective. In this regard, there are three streams of literature in strategic management aiming to explain how some firms outperform others: Porter´s competitive advantage approach, Barney´s sustained competitive advantage perspective, and D´Aveni´s temporary advantage. However, the sustained competitive advantage approach suggests that generating economic rents must be understood as a complex phenomenon characterised by three features: i) path dependency (e.g., some resources and capabilities can only be developed over long periods, ii) social complexity (e.g., it may not always be clear how some firms develop some capabilities in short to medium term), and iii) causal ambiguity (e.g., some resources and capabilities cannot be bought and sold in markets). Therefore, this framework draws from a complex (or complexity) process that establishes logical connections between combinations of causal conditions (i.e., resources and capabilities) and a desired outcome (i.e., economic rents). The research methodology for business from the QCA perspective thus may raise some critical questions: How do some firms accumulate and deploy resources and capabilities more efficiently than their competitors to internally (not in markets) acquire and sustain a competitive advantage? And what is the nature of a firm´s economic rents? In short, this paper discusses the nature of sustained competitive advantage (i.e., desired outcome) as a complex process (and not as a linear process) in that some firms outperform others, managing and deploying different resources and capabilities (i.e., conditions).