Similarities and contradictions in the core logic of three strategy research streams

The logical foundations shaping three prominent streams of strategic management thought are summarized and then compared and contrasted. The intent is to determine whether these research streams are restatements of a single core logic using different terms to describe the same phenomena and relationships, or whether they provide alternate, and potentially competing, explanations for effective strategic action. Analysis reveals some concordant assertions, some similarities across pairs of frameworks, and some fundamental contradictions among the various logic sets. Since key elements in the fundamental premises of each research stream present logical contradictions with each of the other two, a strategy derived from an integration of these perspectives creates inconsistencies in a firm’s enacted context, its assumptions about strategy making, and its administrative arrangements. As circumstances change, a firm may be required to undergo a ‘core logic shift’ to maintain consistency between its strategy and its strategic context. When a shift becomes necessary, a firm needs to overcome structural inertia, competitive inertia, organizational momentum, and its current management logic to maintain internal consistency. Additional implications of the comparison of these three logics for both theory and practice are discussed. Copyright © 1999 John Wiley & Sons, Ltd.     

When is human capital a valuable resource? The performance effects of Ivy league selection among celebrated CEOs

We investigate whether and when highly trained human capital constitutes a rent‐sustaining resource. Our study of 444 CEOs celebrated on the covers of major U.S. business magazines found an advantage accruing to graduates of selective universities. Such CEOs led firms with higher and more sustained market valuations. The advantage was strongest for undergraduate programs as these related to the kinds of talent demanded of a CEO. The advantage also was greatest in smaller firms where CEO discretion might be highest and for younger CEOs who may benefit most from college and are less able to appropriate rents. Finally, the advantage accrued to graduates of more recent years, when selective schools had become less socially elitist and increasingly meritocratic, thus favoring human versus social capital. Copyright © 2014 John Wiley & Sons, Ltd.     

A rational‐expectations revision of Makadok's resource/capability synthesis

Makadok has recently developed a mathematical model aimed at synthesizing the resource‐based and dynamic‐capabilities views of the rent creation process. One unstated implicit assumption in that model is that each bidding firm in the resource market is ignorant not only of the content of rival firms' private information, but also of the quality (i.e., the noisiness or reliability) of that information. Consequently, that model does not qualify as a rational‐expectations Bayesian Nash equilibrium—a fact that both generates questionable results (e.g., the possibility of negative expected profits) and impedes any effort to extend the model. The rational‐expectations critique in economics points out that this sort of nonrational assumption becomes increasingly implausible as economic actors learn more about each other's patterns over time through repeated interactions (in this case, as bidders repeatedly compete against each other to buy different resources over time). So, over the long run, the only truly stable, viable, and robust assumption would be rational‐expectations behavior. The primary purpose of this paper is to put Makadok's model on the firmer methodological footing of rational‐expectations Bayesian Nash equilibrium, so that it will no longer generate questionable results, and so that future researchers can more easily extend it. The secondary purpose of this paper is to demonstrate that this shift to rational‐expectations assumptions has little substantive impact on the testable hypotheses generated by Makadok's original model. Copyright © 2002 John Wiley & Sons, Ltd.