A historical comparison of resource-based theory and five schools of thought within industrial organization economics: do we have a new theory of the firm?
A resource-based approach to strategic management focuses on costly-to-copy attributes of the firm as sources of economic rents and, therefore, as the fundamental drivers of performance and competitive advantage. Interest presently exists in whether explicit acknowledgement of the resource-based view may form the kernel of a unifying paradigm/ or strategy research. This article addresses the degree to which a resource-based view represents a fundamentally different approach from theories used in industrial organization (10) economics. The central thesis is that, put in formal terms, the resource-based approach is reaching for a theory of the firm. To determine its distinctiveness in comparison to IQ therefore, an appropriate comparison is with other theories of the firm developed within that tradition. Section I summarizes and analyzes five theories that have been significant in the historical evolution of JQ These are neoclassical theory's perfect c:ompetition mode~ Bain-type IQ the Schumpeterian and Chicago. responses, and transaction cost theory. The first part of Section lldnalyzes the resource- based approach in terms of similarities to ~nd di/fere'nces from these 10-related theories. The conclusion is that resource-b~~ed theory both incorporates and rejects at least one major element from each of them; thus resource-based theory reflects a strong 10 heritage, but at the same time incorporates fundamental differences from any one of these theories. The second part of Section II analyzes resource-based theory as a new theory of the firm.