Relating Dynamic Capabilities to Industry Structure: An Integrative Approach to Firm Strategy

Abstract

Debates on the micro-foundations of strategy have reignited discussions about true determinants of performance heterogeneities in firms. According to the “structure-based view” of performance, the way a firm fits into the industry structure is seen as the primary source of competitive advantage. On the other hand, the “strategy-based view” contends that process-based aspects of firms should be accorded far more importance in the study of the determinants of performance than macro, structural indicators. In this paper, we are arguing that linking the research on the strategic variables with structural research can explicate a number of unexplained facets of firm performance.