Performance


A fundamental aim of strategy research is to increase understanding of the core drivers of organizational performance, broadly construed. The reading lists in the first section of the reader surveys some of the basic building blocks of organizational performance and highlights some continuing debates regarding the source and sustainability of competitive advantage.

In Competition and Performance , Michael Ryall traces the development of ideas in strategy about competition and its effect on firm performance. This reading list highlights recent theoretical contributions in coalitional game theory that expand and refine the traditional conception of competition that underpins many central ideas in strategy. These recent developments provide a precise formal apparatus with which to analyze how strategic decisions at the firm level alter the balance of competitive and super-competitive factors that affect value appropriation and performance.

Peter Zemsky’s reading list on Sustainability reflects on some of the theoretical mechanisms underlying sustainability of competitive advantage, focusing in particular on the threat posed by imitation by rivals. Two broad views on sustainability are presented: the first, coming from the traditional IO literature, explores how mechanisms as diverse as switching costs, learning curves, network externalities and reputations create positive feedback such that a competitive advantage today reinforces itself and hence persists over time. As such, there are clear links between this topic area and topics covered in the lists on Innovation , Industry Evolution , Geography and Agglomeration , and **//Organizational Learning//**. The second view on sustainability shifts attention away from the maintenance of privileged product market positions to superior resource positions. In surveying and critiquing this literature, and highlighting recent developments, the readings here complement those in Competition and Performance and in Industry and Firm Effects.

In Industry and Firm Effects Anita McGahan outlines the contours of a long-standing debate in strategy on the relative importance of industry, corporate, business-unit and year effects on the accounting profitability of firms. Reflecting the significant empirical challenges in this area, this list traces methodological developments aimed at identifying different sources of persistence in performance, and highlights areas of consensus and continued controversy. Recent innovations and extensions that emphasize the role of geography and individuals in shaping institutions that create enduring industry effects are also explored; these recent developments provide links to topics covered in Geography and Agglomeration .

Nick Argyres and Rachelle Sampson explore another fundamental building block of performance in Organization Form: Selection & Consequences . They note that the selection of organizational form and its consequences for firm performance were arguably the very first phenomena to be studied in the strategy field. The list highlights development of the literature, based primarily on organizational economics, but also encompassing challenges to the economic approach from a sociological perspective, as well as readings that seek to reconcile the two approaches. Recent contributions in the areas of inter-firm alliances, internal organization and contract structure are also surveyed, including empirical studies designed to tackle the difficult issues associated with self-selection and endogeneity bias endemic to this area of research.

In the final reading list in this section, Peter Roberts focuses on some important intangible drivers of firm performance in Antecedents and Performance Implications of Reputation and Status. The reading list reflects the broad disciplinary diversity of relevant literature and the commentary discusses both opportunities and challenges faced by researchers in this inter-disciplinary domain. Careful definition of terms and specification of causal mechanisms is highlighted as a crucial issue as we seek to understand the boundary conditions for presumed positive reputation/status-performance relationships.