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TEMPORARY COMPETITIVE ADVANTAGE:

AN INVESTIGATION INTO THE CORE OF THE LITERATURE

AND CHALLENGES FOR FUTURE RESEARCH

Giovanni Battista Dagnino University of Catania

Corso Italia, 55 95129 – Catania (Italy) Tel. 39.095.7537-622 Fax 39.095.7537-610

E-mail: dagnino@unict.it

Pasquale Massimo Picone University of Catania

Corso Italia, 55 95129 – Catania (Italy) Tel. 39.095.7537-646 Fax 39.095.7537-610

E-mail: pmpicone@unict.it

Giulio Ferrigno University of Catania

Corso Italia, 55 95129 – Catania (Italy) Tel. 39.095.7537-646 Fax 39.095.7537-610

E-mail: giulio.ferrigno@unict.it

For effective research assistance, we are grateful to Laura Vecchio Ruggeri. For support in coding cross-check, we thank Anna Minà and Rosaria Ferlito. For helpful suggestions on previous versions of this paper, we recognize participants to the BPS Junior Faculty Paper Development Workshop held at the 2015 Academy of Management Meetings in Vancouver, sessions of the 2015 Strategic Management Society Conference in Denver and the 2016 Academy of Management Meeting in Anaheim, and research seminars at Cass Business School, the University of Catania and the University of Minnesota. Last but not least, for offering developmental comments, we acknowledge Richard D’Aveni and David Sirmon. All flaws remain ours.

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TEMPORARY COMPETITIVE ADVANTAGE:

AN INVESTIGATION INTO THE CORE OF THE LITERATURE

AND CHALLENGES FOR FUTURE RESEARCH

Abstract

In today’s evolving competitive landscape, the traditional sources of competitive advantage

tend to evaporate fairly rapidly. Therefore, managers need to continually rethink and

reformulate their firm strategies. As a consequence, strategic management scholars have felt

compellingly to shift the traditional center of attention from sustainable advantage to focus on

how firms compete by achieving a series of temporary advantages. Notwithstanding that shift,

so far the proliferation of attention on temporary competitive advantage has combined with a

fragmented status of studies which call for detecting the state of knowledge in this strategy

realm. Accordingly, we offer a conceptual map of current inquiry on antecedents, management,

and consequences of temporary competitive advantage. By leveraging the present state of

literature on temporary competitive advantage, we identify and discuss the key challenges for

cultivating fertile research in this evolving area of research.

Keywords: temporary competitive advantage, technology turbulence, time compression,

interfirm relationships.

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INTRODUCTION

In the last decade the ability to break away from existing rules has turned out increasingly

important to achieve success and generate innovation in highly uncertain environments.

Actually, since the firm’s competitive environment has progressively become more uncertain,

turbulent, and volatile (Thomas and D’Aveni, 2009), the explanatory power of the traditional

sources of competitive advantage has turned somewhat shallow or rather inconsistent to

explain how firms can sustain competitive advantage (D’Aveni, Dagnino, and Smith, 2010).

As a result, a relevant chunk of strategic management inquiry has felt the compelling drive to

gradually shift its focus away from the traditional sources of competitive advantage, suggesting

that the nature of competitive advantage has turned more temporary rather than sustainable.

While a handful of studies have rejected the existence of TCA in current competitive

landscapes (McNamara, Vaaler and Devers, 2003; Vaaler and McNamara, 2010) and/or argued

for the persistence of firm-specific returns (Geroski and Jacquemin, 1988; Ghemawat, 1991;

Waring 1996), increasing attention on temporary competitive advantage (hereafter TCA) has

come to light, as evidenced by the 226 citations recorded by the eight articles contained in the

Strategic Management Journal (SMJ) special issue on temporary advantage from its

publication in late 2010 to the end of 2015. This proliferation of intellectual attention suggests

that, in recent years, TCA has turned into an emerging research area in strategic management

and is, most likely, going be so in the coming years.

Notwithstanding that, while growing intellectual attention has focused on the conditions

that guide our understanding of the nature of TCA, this body of inquiry has generally

contributed to strategic management debate in a quite fragmented way. In such fashion, the

current literature on TCA shows a lack of systematic appraisal and comprehensive appreciation

of the key issue. For instance, research has largely centered on specific antecedents of TCA

(e.g., technological turbulence, or interindustry convergence), detected the impact of TCA on

firm strategy and volatility of performance, or, alternatively, explored in a disjoint fashion the

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role of dynamic capabilities and the one of interfirm relationships to manage TCA. In more

detail, literature fragmentation germinates from the fact that, while resource-based temporary

advantage research emphasizes firm resources (or dynamic capabilities) as a key driver of TCA

thereby ignoring industry effects, performance-based temporary advantage research

decomposes performances into their industry- and firm-specific effects (D’Aveni et al., 2010).

The proliferation of studies on TCA joint to the fragmented debate on the issue strategic

management has heretofore developed make a call for framing out a comprehensive

understanding of the state of art of TCA. In addition, discussing past accomplishments of TCA

literature is helpful to extract a set of implications that may be relevant for future research

(Faems, Filatotchev, Harley and Siegel, 2016).

By investigating the core of TCA literature, this paper contributes to strategic

management inquiry in two ways. First, we analyze and synthesize the existing literature on

TCA in a consistent fashion. By doing so, we submit a conceptual map that links antecedents,

management, and consequences of TCA. The systematic overview we advance may be

considered as an “extensive introduction” to TCA for students and scholars approaching this

issue. Second, by leveraging the current state of the art of TCA literature, we identify and

discuss the key challenges in the extant literature and suggest fruitful ways to develop further

investigation on the issue.

The remainder of this paper is organized as follows. First, we carefully review the

foundations of sustainable competitive advantage (henceforth SCA) and discuss the shift from

SCA to TCA. Successively, we illustrate the methodological steps we followed in selecting the

articles and provide a description of the papers that inform our literature review. On this

ground, we advance a conceptual map of TCA literature that links the crucial sequence:

antecedents, management, and consequences of TCA. Then, we juxtapose the most significant

features of the core approaches to SCA (i.e., the structure-conduct-performance paradigm and

the resource-based view of the firm) with the key insights of TCA. By elaborating and

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presenting a research agenda on TCA, we hence outline the importance of a comprehensive

appraisal of TCA for developing future inquiry. Finally, we present a few concluding remarks

stemming out from our analysis.

FROM SUSTAINABLE TO TEMPORARY COMPETITIVE ADVANTAGE

Strategic management as field of study was born to probe into the factors underlying firm

success (Andrews, 1971). From this perspective, previous studies have traditionally aimed to

analyze both the historical-retrospective and the forward-looking aspects of firm performance

(Jacobson, 1990). They asked for specific attention, respectively, on Chamberlinian rents of the

industrial economics organization grounded structure-conduct-performance paradigm (Porter,

1981), Ricardian rents of the resource-based view of the firm (Barney, 1991; Peteraf, 1993),

and then Schumpeterian rents of the dynamic capabilities perspective (Teece, 2007).

Essentially, strategic management studies offer two main explanations of the sources of

competitive advantage: (a) the external context and firm positioning; (b) the possession or

access to resources and capabilities that are rare, unique, and not easily imitable (Spanos and

Lioukas, 2001)i. Both IO-based structure-conduct-performance paradigm and the resource-

based view of the firm emphasize the sustainability of competitive advantage, as well as the

creation of long-lasting competitive rents (Rumelt, 1991). In fact, they share “the implicit view

that the origins of competitive advantage lie in the unusual foresight or ability of the firm’s

managers” (Cockburn, Henderson, and Stern, 2000: 1124).

While the structure-conduct-performance paradigm and the resource-based view

pinpoint the importance of achieving SCA, the intrusion of hypercompetition (D’Aveni, 1994),

generated by increasingly fast-paced competitive landscapes, teaches us that, far from being

beneficial, traditional strategy approaches may actually take a negative value in today’s rapidly

changing contexts. Coherently, some scholars have labeled these contexts as “disruptive”,

thereby stressing that strategy can also have a “creative destruction” role of rivals’ advantage

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(D’Aveni et al., 2010; Pacheco-De-Almeida, 2010). In fact, in today’s competitive landscapes

the traditional sources of competitive advantage tend to evaporate very rapidly and seem to

turn progressively more indefensible, as usually occurs in long term equilibriums of perfect

competition (Weber and Tarba, 2014).

In the last few years, the accelerated pace of competitive intensity in many industries

has turned each of the traditional sources of competitive advantage more vulnerable and feeble.

As a consequence, the decision to sustain competitive advantages, rather than rethinking the

current ones, may reveal a strategic move that has an opposite effect to the one expected, as it

may prevent firms from developing new advantages (D’Aveni, 1994). Thus, since the

traditional sources of advantage repeatedly fall short to realize competitive success, they show

to be insufficient to compete effectively in rapidly changing environments. The solution

scholars advanced to this problem is to subvert the status quo by seizing and generating

opportunities and initiatives through the creation of a series of temporary advantages (D’Aveni

et al., 2010) by means of designing and implementing a string of competitive moves (Chen and

Miller, 2012, 2015). Therefore, scholars have shifted the attention from the pursuit of a single

long term advantage to the hunt for a concatenation of temporary advantages (Wiggins and

Ruefli, 2005). Since as mentioned earlier TCA literature has developed in quite a fragmented

way, we feel the need to disentangle a more extensive understanding of TCA research.

DETECTING THE CORE OF THE LITERATURE ON TEMPORARY ADVANTAGE

To provide a systematic review of the relevant TCA research, we started from taking into

account the 8 articles published in the SMJ special issue dedicated to TCA in 2010. For this

reason, the roster of articles published in the special issue represents, to our purpose, the main

core of the literature on TCA. While we acknowledge that these 8 articles are not the only

initial ones on TCA, since they are presented in a single issue of an influential journal we also

claim that they constitute the initial consistent body of research published at the same time on

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TCA. Therefore, they may be deemed as the easily trackable TCA groundwork on which

interested scholars may make reference to.

Moving from the main core of TCA research, we searched for papers citing each article

contained in the SMJ special issue. The result of this straightforward research (i.e., 226 entries

as per December 31st 2015) allows us underscoring the scientific unrest of academic inquiry on

the issue of TCA in this five-year time span. We further refined the results by considering

articles published in journals indexed in the management category of Thompson Reuters

having a high 5-year impact factor greater than 2 in 2012. The choice of this cut-off digit of the

journal impact factor aims to certify that we take into account exactly the ones that are the most

influential journals in management (Garfield, 1979)ii. This process yielded 94 articles. This

sample was then reduced to 76 articles due to the exclusion of eighteen pieces: (a) fifteen

literature review articles were omitted because, as pretty known in the academic community,

reviews are not planned to supply an original contribution; and (b) three articles were ignored

because they fall short to advance a contribution to TCA research.

In order to maximize the authors’ independence and minimize subjective biases, each

author of this study individually assessed the papers. We accurately coded each article’s name

of journal, theoretical perspective, methods, and key points for TCA literature. Additionally,

two young research-active scholars; i.e., a PhD candidate in strategy, who focuses on business

models research, and a post-doctoral fellow, who works in competitive strategy, cross-checked

the coding process. The appendix to this paper shows the results of the analysis of TCA

literature, while Table I displays the temporal distribution of the articles, the methods adopted,

and the journals that published TCA articles. Drawing on Table I, we advance three

preliminary reflections on current TCA literature.

------------------------------------------- INSERT TABLE I ABOUT HERE -------------------------------------------

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First, since 2010 the number of articles on TCA has steadily grown year by year. Focusing the

attention on the left and right truncations of this sample, we observe that the number of papers

on TCA has increased annually by four times (8 papers published in 2011 vs. 25 papers

appearing in 2015). The year with the highest concentration of published works is indeed 2015,

that represents 32.89% of the overall article panel. The distribution of articles shows therefore

a positive exponential trend in the academic research interest on TCA.

Second, as Table I shows, the distribution of the methods used by article authors

features that quantitative studies account for almost two third of the total article panel (i.e.,

64.47% of studies).

Third, the 76 articles in the final sample appear in 24 different journals. This wide

variety of journals shows that the issue has attracted remarkable intellectual attention from

several scholars, spreading out not only from the strategy field, but also from other influential

management areas, such as knowledge management, technology and innovation management,

operations and supply chain management, and strategic entrepreneurship. Additionally, the

wide variety of journals ensures that the article sample is not affected by journal editors’ bias

or topic preferences in selecting articles for publication. Within the initial sample of 94 articles,

we identify four circles in the core of the literature on TCA (as reported in Figure 1).

While, as anticipated, the eight articles published in the special issue compose core 1

(or the main core) of TCA literature; instead, the sample of 94 articles represents core 2. The

sub-panel of 76 articles constitutes core 3 of TCA literature. Finally, within the sub-panel of 76

articles, we identify 54 articles (i.e., core 4 of the literature) that belong to journals with the

highest frequency of citations (see Table I).

-------------------------------------------- INSERT FIGURE 1 ABOUT HERE --------------------------------------------

CONCEPTUAL MAP OF TEMPORARY COMPETITIVE ADVANTAGE

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LITERATURE

In this section, we develop a conceptual map of TCA literature that stems from an in-depth

understanding of the body of work published on the key topic in the last 5 years (2011-2015).

In the footsteps of D’Aveni et al. (2010: 1372), we confirm that “the analysis of temporary

advantage can be partitioned into three main constituent parts: (1) causes or antecedents of

temporary advantages, (2) management of temporary advantages, and (3) consequences of

temporary advantage”. We deem to use this representation not simply because it was the one

adopted by D’Aveni et al. (2010), but also since it describes well the conditions for the

emergence of a new research area in strategy, such as TCA research. Figure 2 offers the

conceptual map that informs our study of the TCA literature.

Drawing on a thorough analysis that recognizes for each article the dependent variables,

independent variables, moderating or mediator variables, and constructs, we allocated articles

in the three main sections of the map. At the left-hand side (first rectangle) of Figure 2, we

propose the set of antecedents that lead to TCA: (i) uncertainty and technology turbulence; (ii)

time compression; and (iii) interindustry convergence.

In the mid-way rectangle of Figure 2, we suggest how to map the literature on

managing TCA. Literature detection indicates that research has explored the management of

TCA in association, respectively, with “resource based” and “action based” features. Resource

based features are observed at three levels of analysis: (i) intrafirm level; (ii) firm level; and (iii)

interfirm level. Action based features are analyzed in terms of (i) moves and countermoves;

and (ii) patterns over time. At the right-hand side (last rectangle) of Figure 2, we discuss the

consequences of TCA concerning: (i) volatility in firm performance; and (ii) crisis of

traditional measures of performance. Interestingly, the way we have built the conceptual map

(antecedents, management, and consequences) of TCA inquiry seems beneficial not only to

elucidate the state of knowledge on TCA, but also to provide the groundwork to generate

inspiring insights for future studies.

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--------------------------------------------- INSERT FIGURE 2 ABOUT HERE ---------------------------------------------

ANTECEDENTS OF TEMPORARY ADVANTAGE

In today’s shifting competitive setting, “rivals must take both the strategies of their competitors

and possible performance-altering changes in the environment into account” (Ross and

Sharapov, 2015, p. 677). This insight is theoretically rooted in the Austrian school of

economics (Kirzner, 1973, 1979; Jacobson, 1992) that locate the antecedents of innovation

processes and entrepreneurial discovery in environmental uncertainty and market disequilibria.

The Austrian school of economics advocates the dynamic interface among managerial and

technological innovations, flexibility, and performance feedback analysis as a process of

constructing strategic windows that generate rents for limited periods of time. From this

perspective, scholars have identified a set of significant environmental grounds underlying the

creation and erosion of competitive advantage (Shepherd and Rudd, 2014): (i) uncertainty and

technology turbulence; (ii) time compression; and (iii) interindustry convergence.

Uncertainty and Technology Turbulence

Literature on the antecedents of TCA supports that uncertainty and technology turbulence

reduce the firm’s aptitude to identify, evaluate, and react to competitors (Tanriverdi, Rai, and

Venkatraman, 2010). However, uncertainty (and the willingness to bear uncertainty) also

involves opportunities for the firm to make some investments (Hitt et al., 2011). Then,

uncertainty plays the role of key contingency that shapes new ventures’ potential gains

(Larrañeta, Zahra and Galan Gonzalez, 2014), as well as established firm performance (Foss

and Lyngsie, 2014).

An important example of uncertainty is the one that arises from the intricacy of

predicting consumers’ demand or from the technological changes tied to the adoption of a

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certain type of product (Chintakananda and McIntire, 2014). Therefore, technological changes

appear to shape the level of uncertainty in the competitive environment (Duncan, 1972).

Accordingly, Wu, Wan and Levinthal (2014) argue that any new technology is the mere

external manifestation of heterogeneity in the demand side of consumer preferences. In this

perspective, new technologies can constitute a reaction to environmental uncertainty.

Technology turbulence relates to the rate of technological change (Johnson, Martin and

Saini, 2012). As such, technology turbulence involves the creation of opportunities to occur at

a relatively fast pace. When firms face technology turbulence, firm strategy will result in

strategic actions designed to win profit or value in such turbulence (Johnson et al., 2012).

Conversely, in markets with lower technology turbulence, firms may not perceive the

immediate need to learn from the market, thereby running the risk to remain anchored to their

existing competitive position.

Uncertainty and the pace of technological changes affect strategic actions that are

implemented to achieve a profitable competitive position. Accordingly, McIver et al. (2013)

show that the desirability and effectiveness of certain activities (e.g., knowledge and

organizational search) depends on the uncertainty, volatility, and pace of change in the firms’

external environment. Consequently, these factors affect the processes underlying the building

of competitive advantage as they strengthen the contention that uncertainty is a market

antecedent leading to the search for competitive advantages that are less durable than

traditional ones.

Time Compression

The rapid downfall of the advantages caused by competitive pressure requires industry leaders

to activate a chain sequence of short term gains to sustain superior performance. According to

TCA literature, the resulting implication is time-based competition activated by the launching

of new products and technologies. For instance, Apple “self-cannibalizes” its market positions

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as a prerequisite to maintain a leading position (Pacheco-de-Almeida, 2010). On the other hand,

time pressure has implications on the creation of new advantages characterized by a temporal

force called time compression diseconomies (Pacheco-de-Almeida, 2010).iii

Bengtsson and Johansson (2012) identify three drivers that explain the time

compression phenomenon: (a) shorter product lifecycles; (b) shorter time to market; and (c)

increased projectification. We proceed to explain the three drivers one by one. Shorter product

lifecycles involve maturity of new products to rapidly approach, therefore the time windows to

walk into the market with new products, as well as the time window for running specific

customer-tailored project, turn out increasingly shorter (Bengtsson and Johansson, 2012).

Shorter time to market involves that the window of opportunity turns, temporally speaking,

very limited and therefore that firms cannot use any more conventional “wait and see”

strategies to outcompete their competitors. Rather, firms need to develop new services and

products and identify, as quickly as possible, ways to match potential customer needs;

accordingly, cooperation with rivals becomes vital (Bengtsson and Johansson, 2012). Finally,

increased projectification refers to the firms’ engagement in short term relations with their

rivals. These relationships are often based on specific customer projects, implying that firms

will be involved in as many relations as the number of their projects. Consequently, the role

firms play in mutual relations turns pretty changeable.

Interindustry Convergence

Antecedent three of TCA is interindustry convergence. In today’s competitive landscape,

partner firms suddenly turn into rivals and potential rivals turn into allies due to industry

convergence processes (e.g., since 2010 Nokia wrestled such unanticipated competitors as

Apple and Google). “Although industry convergence appears to be highly significant and

poised to intensify with further economic development not only in science/technology, but also

in product and service markets, most of the previous studies considered this phenomenon only

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in terms of technology” (Kim et al., 2015, p. 1745). Conversely, the process of industry

convergence impels industry structure to change from a vertically integrated business model

towards models that are much more open and characterized by horizontal cooperation with

specialized firms (Huang et al., 2015). Andrevski, Brass and Ferrier (2013) suggest that firms

with a central position in their interfirm relationships have privileged access to assets,

information, and resources that oversee competitive positions.

MANAGEMENT OF TEMPORARY ADVANTAGE

D’Aveni et al. (2010) propose two explicit ways to assess the management of TCA: (i) a

resource based perspective exploring the relationships between the endowment of firm

resources and firm slack; (ii) an action based perspective connecting actions (and responses) to

firm performance. Accordingly, we posit that extant research on the management of TCA

includes both “imperfect competitive structures of the economic space”, that lead to Ricardian

rents, and “the movement of players through this space from disequilibrium to equilibrium and

vice versa”, that generates in turn Schumpeterian and disequilibrium rents (Keyhani, Lévesque

and Madhok, 2015: 92).

Resource based management of TCA

Conventionally, the resource-based view of the firm posits that firm performance is shaped by

the presence of resources that are valuable, rare, inimitable, imperfectly immobile, and non-

imitable or substitutable (Barney, 1991; Peteraf, 1993). However, other theoretical perspectives

have complemented this line of thought. First, studies on strategic leadership disentangle the

CEO’s contribution to resource configuration and reconfiguration (Finkelstein, Hambrick,

Cannella 2009). Second, dynamic capabilities studies explain heterogeneity of firms having the

same initial endowment of resources with the possession of/access to dynamic capabilities

(Teece, 2007). Finally, drawing on Barnard’s (1938) idea of coalition formation and

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cooperative strategies, research stresses that resource orchestration does not occur necessarily

at the firm level, but involves the use of a web of interfirm relations (Provan, Fish and Sydow,

2007; Gulati, 1998). Taken together, the four abovementioned perspectives marshal the

theoretical nest of the resource based management of TCA.

Moving from the complementarities among these perspectives and considering

dynamism and environmental contingencies (Sirmon, Hitt, and Ireland, 2007), management

scholars are today able to recognize that achieving competitive advantage is pretty challenging,

if not almost unfeasible, by only considering the single firm level. Indeed, extant studies credit

explicit attention to three levels of analysis: (a) intrafirm level, exploring the role of strategic

leadership and top management teams (hereafter TMTs); (b) firm level, mainly focusing on

dynamic capabilities; and (c) interfirm level, mostly investigating the formation and

configuration of strategic alliances.

Resource based management of TCA at the intrafirm level

Extant research on the management of TCA “indicates how critical a firm’s sensory and

analytical mechanisms are when it comes to making good decisions” (Lin and Rababah, 2014,

p. 954). Because strategic leadership and TMT orchestrate other firm resources, they represent

cornerstone resources that enable the firm to strategically pursue TCA. From this perspective,

Finkelstein, Hambrick and Cannella (2009) present the study of strategic leadership and TMT

as an extension of the resource based approach. The discussion of the central role strategic

leadership and TMT play to win TCA occurs at three main respects (i.e., strategic leadership’s

psychological attributes, socio-psychological processes of interaction among TMT members,

and TMT socio-behavioral integration). First, Wang, Libaers and Jiao (2014) argue that

strategic leadership’s psychological attributes affect how executives take strategic choices. For

instance, psychological attributes act through a three-stage filtering process (i.e., information

search, selective perception, and interpretation of information) and, in turn, affect the speed of

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the firm’s decision making process, that is a key aspect to achieve TCA (Reina, Zhang, and

Peterson, 2014).

Second, Wang et al. (2014) extend attention on the socio-psychological processes of

interaction among members of the TMT. They focus on TMT-based socio-psychological

processes that make a firm more adaptable by increasing its strategic flexibility. In this vein,

Andrevski et al. (2014) acknowledge “managerial racial diversity” as a strategic capability that

allows the firm to realize superior operating profits by generating TCAs. Then, Chirico and

Baù (2014, p. 2015) find that “environmental dynamism increases family [TMTs’] awareness

of the need to display entrepreneurial behavior to sustain the family firm competitiveness”.

Finally, Chen et al. (2010) recognize the role of TMT socio-behavioral integration

suggesting that only a dynamic and cohesive team can launch decisive and swift actions against

rivals. Since competitive advantage is temporary, dynamic and cohesive teams turn out to be

requisite in competitive environments that are difficult to interpret.

Resource based management of TCA at the firm level

Rather than staying tightly tied to extant static views, literature on TCA management

increasingly calls for developing dynamic approaches to achieve competitive advantage (Chen

and Miller, 2012; Su, Linderman, Schroederb and Van de Ven, 2014)iv. In this perspective,

extant research shows that dynamic capabilities are helpful means for firms to tackle

environmental turbulence, industry convergence, and time compression diseconomies (i.e., the

antecedents of TCA). Indeed, dynamic capabilities increase effectiveness, speed, and efficiency

of firm responses (Hitt et al., 2011; Chmielewski and Paladino, 2007), that ultimately buttress

TCA performance. Accordingly, we use the taxonomy of dynamic capabilities proposed by

Teece (2007) to interpret the literature on resource based management of TCA at the firm level.

Accordingly, we consider three specific sets of dynamic capabilities: “(1) capabilities to sense

and shape opportunities and threats: (2) capabilities to seize opportunities; and (3) capabilities

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to maintain competitiveness through enhancing, combining, protecting, and, when necessary,

reconfiguring the business enterprise’s intangible and tangible asset” (Teece, 2007, p. 1319).

Set one of dynamic capabilities (i.e., sensing and shaping opportunities and threats)

involves scanning, searching, and exploring activities across markets and technologies, thereby

requiring firms to maintain close relationships with customers, suppliers, and R&D partners, as

well as to implement the best practices in the industry (Danneels, 2016). From this perspective,

Bharadwaj and Dong (2013) find that market learning activities and customer oriented

practices are helpful to the generation of sensing market change.

Set two of dynamic capabilities (i.e., seizing opportunities) embraces the assessment of

extant and emerging capabilities, possible investments in relevant designs and technologies

that are most likely to achieve marketplace recognition (O’Reilly and Tushman, 2008; Teece,

2007). Accordingly, Ben-Oz and Greve (2012) conducted twenty in-depth interviews from

which it is apparent the viewpoint of managers, directors, venture capitalists, entrepreneurs,

and government regulators. The result of this research shows that all firms agree that there are

industries in which changes occur very rapidly, and usually the most significant changes

interest their technology base. In such circumstances, the firms’ executives request to increase

their ecological understanding to explore new knowledge from customers, suppliers, and

competitors by means of the establishment of interfirm relations of strategic value (Ben-Oz and

Greve, 2012).

Finally, set three of dynamic capabilities (i.e., enhancing, combining, protecting, and

reconfiguring the assets) involves the recombination of resources and operational capabilities,

adapting them to firm growth, market, and technology changes (Bingham and Davis, 2012;

Day, 2011; Wilden et al., 2013). To achieve a series of TCAs, firms enhance their intangible

and tangible assets by searching beyond and outside their current existing knowledge body and

capability base. As Katila et al. (2012) observe, the intrusion of environmental dynamism

increases the risk that specific knowledge (linked to the current environment) may become

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obsolete, in such a way that it will drive firms to exploit their common base of knowledge

rather than their specific one. In addition, Clarysse, Bruneel and Wright (2011) submit that, in

unstable competitive environments, firms must implement strategic decisions and combine

their assets in the shortest possible time, thus having a limited period of time to gradually build

a portfolio of resources and knowledgev. Finally, dynamic capabilities related to the protection

and reconfiguration of knowledge lead to developing organizational agility (Chakravarty et al.,

2013). Organizational agility takes two shapes: “adaptive agility” and “entrepreneurial agility”.

Adaptive agility makes the firm more durable and suitable to absorb environmental shocks and

incremental changes; this occurs even though it would be better to respond to market change in

a defensive manner. Conversely, entrepreneurial agility is the ability to preempt market

changes in a proactive manner. In fact, this type of agility is much more flexible and usable

than the former to obtain greater operational effectiveness, in order to modify the firms’

temporary competitive positioning, and to organize new business approaches to win

advantages in rapidly changing conditions.

Resource based management of TCA at the interfirm level

Authors have started to explore the emergence of TCA within the web of cooperative

relationships that firms continuously activate; i.e., interfirm relations (Andrevski et al., 2016;

Baglieri et al., 2012). Interfirm relations increase the firms’ ability to discover, combine, and

recombine resources and knowledge that facilitate or constrain the formation of TCA

(Andrevski et al., 2016), and thus represent a strategic resource (Lavie, 2007). Actually,

interfirm relations allow firms to “walk in the shoes” of other firms, rivals or allies (Peteraf and

Bergen, 2003). From this perspective, firms achieve TCA by managing a portfolio of strategic

alliances (Hashai, Kafouros and Buckley, 2015). For instance, Bengtsson and Johansson (2012)

posit that the establishment of portfolio relationships allows firms to respond more quickly to

uncertainty and technology turbulence, interindustry convergence, and time compression,

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thereby balancing their asymmetric power relationships with competitors. Further, the authors

suggest that firm survival requires the ability to select, establish, maintain, and end

relationships with competitors and partners, depending on whether the interaction contributes

or constrains the creation of opportunities.

Additionally, Andrevski et al. (2016) propose that alliance portfolio may affect the firm’s

ability to achieve TCAs. Indeed, they submit that alliance portfolio configurations affect

competitive actions in three distinct, but interdependent, ways: opportunity recognition,

opportunity development, and action execution. In this vein, Baglieri et al. (2012) posit that an

important firm ability is the capacity to explore new avenues internally by reshaping interfirm

relationships with different actors. This occurs in order to launch new technological trajectories

and to shun lock-in, thereby facilitating firms to manage TCA. However, we also acknowledge

that, due to the characteristics of resources, resource combinations, and the environment, the

firms’ engagement in interfirm relationships may generate adjustment costs that, in turn,

prompt the termination of a strategic alliance (Madhok, Keyhani, and Bossink, 2015).

Action based management of TCA

The bulk of the literature on action based management of TCA is informed by three theoretical

perspectives (D’Aveni et al., 2010). First, the Schumpeterian theory of creative destruction

explicitly appreciate an “evolutionary character of the capitalist process” that “is not merely

due to the fact that economic life goes on in a social and natural environment which changes

and by its change alters the data of economic action” (Schumpeter, 1942). Second, the

Carnegie School view of the theory of the firm, and more specifically Cyert and March (1963),

draw attention on information flow and the critical search of routines to preserve and replace

corroding competitive advantages. Third, Nelson and Winter (1982) propose an original

economic evolutionary perspective that considers the natural selection arising within the firm’s

boundaries. Using this set of conceptual guidelines, extant studies pinpoint two main aspects

19

concerning action based management of TCA: (a) moves and countermoves; and (b) patterns

over time (i.e., competitive sequences and path dependence).

Moves and countermoves

Moves and countermoves refer to the nature of strategic action, the impact of this action on

rivals’ reactions and the reversibility of the actions (Chen and MacMillan, 1992). They include

“attacks and competitive moves and countermoves, competitive signaling, and multipoint

competition” (Giachetti and Dagnino, 2014, p. 1399), by combining nonmarket and market

actions (Wei, Hu, Li, and Peng, 2015). Accordingly, extant inquiry recognizes the importance

of rapidity in providing an effective contribution to the firms’ moves and countermoves in

managing TCA. From this perspective, we emphasize the role of strategic leadership in TCA

management in taking fast and complex decisions (Lin and Rababah, 2014) and the value of

rivalry among firms for spawning resource market spaces. As Jha and Lampel (2014) suggest,

firms can reap an advantage by means of a few selected strategic moves, especially when

customer segments have not yet developed and advantages are highly temporary. Similarly,

Giachetti and Dagnino (2014) investigate the interface between technological knowledge

formation at the industry level and firm level competition, corroborating the occurrence of

repertoire simplicity over a series of competitive moves and countermoves for achieving TCA.

On the other side, Hsieh, Tsai and Chen (2015) encourage managers to pay attention to the risk

of commitment escalation. They illustrate how reference to competitors with varying relative

sizes can provide justifications for further commitment to an underperforming initiative. Ross

and Sharapov (2015, p. 675) explore the imitation process among competitors. They posit that

“imitating follower actions releases information that helps the follower to leverage capability

advantages”. Similarly, Ayyagari, Dau and Spencer (2015) show that managed group affiliate

firms are more likely to respond to multinational firms’ threats.

Additionally, some scholars acknowledge the importance of timing in taking effective

20

moves and countermoves. As Katila, Chen and Piezunka (2012) note, firms should focus on the

timing to locate unexploited opportunities; in such a way firms can take advantage by

exploiting novel customer segments. Interestingly, managerial perceptions may in fact reduce

the timing of competitive actions (Iriyama, Kishore and Talukdar, 2015).

Patterns over time

In addition to considering firm moves and countermoves to achieve TCAs, extant research also

look at their dynamic implications over time; i.e., patterns over time (Rockart and Dutt, 2015).

First, scholars consider the sequences of moves and countermoves. For instance, Chen and

Miller (2012: p. 138) consider the competitive environment as being inherently “dynamic and

interactive”. Consequently, sequences of actions and reactions between rivals, including the

introduction of new products, advertising campaigns, entry into new markets, and changes in

pricing policy, constitute the building blocks of competition.

Second, TCA literature uncovers the dangers of path dependency in organizational

search. For instance, Katila et al. (2012) found that, rather than exploring new competitive

landscapes, firms try to take advantage from already known competitive areas. Consequently,

their long-term performance increases when firms perform some search (further) away from

current knowledge (Katila et al., 2012).

CONSEQUENCES OF TEMPORARY ADVANTAGE

To survive today’s quickly evolving business environment, firms orchestrate resources and

competitive actions to effectively introduce new products and process technologies so as to

rapidly build sequences of TCAs (Wang et al., 2014). From this perspective, scholars have

recognized two main consequences of TCA: (i) the volatility in firm performance related to the

rapidity of TCA erosion; (ii) the crisis of the traditional measures of performance, in that they

have turned increasingly unable to represent the sources of firm success (Murali and Parthiban,

21

2012).

Volatility in firm performance

TCA literature shows evidence of an increase in the volatility of financial performance

(Bharadwaj and Dong, 2013; Huang et al., 2015; Mackelprang et al., 2015). By acknowledging

the existence of environmental destructions and mobility assumptions (Huang et al., 2015),

TCA literature acknowledges the importance of the firm’s ability to timely innovate and

produce new knowledge. “Associated time pressures incentivize firms to accelerate the process

of assessing product reliability in order to shorten new product time to market, but doing so

may also produce more uncertain product reliability levels” (Mackelprang et al., 2015, p. 72)

and, in turn, performance volatility. Also, Bharadwaj and Dong (2013: p. 11) argue that

“marketplaces are characterized by compressed product life cycles”. In the early stages of the

industry life cycle when prices are relatively high, firms witness a race to achieve scale

economies and exploit opportunities swiftly, before prices decrease. In turn, the continuous

pressure to quickly achieve the best results in the shortest possible time and the implementation

of resource based and action based strategies in short time intervals further accelerate the

erosion of competitive advantage and capsize the foot of competitive advantage (Bengtsson

and Johansson, 2012). The continuous succession of changes in competitive setting lead hence

to high volatility in performance.

Crisis of traditional measures of performance

Given the above-mentioned performance volatility, Murali and Parthiban (2012) maintain that

the traditional financial measures of performance, such as ROA and ROE, turn inevitably

unable to fairly represent the cause of firm success or failure. Therefore, Inoue, Lazzarini and

Musacchio (2013) argue that, when subjected to volatility, the analysis of firm financial

performance reveals inadequate to guide future strategic choices on TCA and should be

22

integrated with a strategy perspective. In this vein, Drenevich and Kriaciunas (2011) suggest to

assess the opportunities to reduce costs and increase revenues, thereby strengthening the firm’s

competitive position and hastening rivals’ competitive actions (Lee et al., 2010). While a cost

cutting strategy is usually seen as a good move for firms, firms concurrently need to carefully

assess what types of cost they actually target to trim down. In fact, lessening some specific

kinds of cost may be deemed as a detrimental move for implementing a TCA strategy.

Accordingly, since human capital is a key driver of productivity performance, Shaw, Park and

Kim (2013) contend that a reduction in costs related to human resources may be harmful to

achieve TCA.

DISCUSSION

When environmental transformation is fast (Wiggins and Ruefli, 2005), complex (Lewin, Long

and Carroll, 1999), and disruptive (Ansari, Garud and Kumaraswamy, 2015), the competitive

setting in which firms operate turns the main enabler of their search for continuous

improvement (Josefy et al., 2015). The ability to be profitable requires firms to continuously

search for new solutions that may allow them, not only to stay on the market but also to thrive

and blossom (D’Aveni et al., 2010). Since a strategy targeted to achieve a series of non-durable

competitive advantages may enable firms to perform satisfactorily in such environmental

conditions, consequently TCA lies at the heart of current management studies.

As earlier discussed, the conceptual map we have proposed in this paper shows that the

management of TCA should embrace both a resource based approach and an action based

approach. The purpose of these approaches is ultimately to improve the value of firm products

and services and, consequently, its market position and power. To be sure, the target of

enhancing the firm’s market position and power is also consistent with the traditional

paradigms to explain competitive advantage; i.e., the industrial organization economics-rooted

structure-conduct-performance paradigm, and the resource based theory-driven resources-

23

capabilities-performance paradigm. However, taken by themselves these strategic paradigms

appear increasingly inadequate to explain how firms can sustain competitive advantage under

fast, complex, and disruptive change.

Table II summarizes the recent debate in strategic management on the nature of the

sources of competitive advantage. It shows how the field has progressively moved its focus

away from the conventional sources of competitive advantages funneled by the industry-led

and internal resource-driven approaches to strategy, suggesting that “nothing is sustainable

forever” (D’Aveni, et al., 2010: p. 1373), and that sustainable competitive advantage rather

than sustainable has turned rare and declining in duration (Wiggins and Ruefli, 2002). The

extant industry-driven and resource-based approaches find in fact their intellectual roots,

respectively, in industrial organization and in Penrose and Chicago economics, thereby

focusing on fairly static views of how to pursue competitive advantage (Chen and Miller,

2012). This state of affairs occurs in either the competitive forces that make up the industry

structure or the resource-driven advantage executed on the ground of the VRIO framework

(Foss, Knudsen and Montgomery, 1995; Mocciaro Li Destri and Dagnino, 2003). They hence

do nothing else than featuring the reworked generic types of competitive strategy (cost

leadership vs. differentiation).

Conversely, for it is theoretically established in such unorthodox economics approaches

as Schumpeterian and Austrian economics, according to the TCA emerging paradigm

competition is an inherently dynamic and interactive subject matter, including sequences of

actions and responses (and individual action) that drive firm performance. This condition

suggests that the way to sustain advantages is not any more in a ‘one-shot story’, but should be

shored up by means of designing and implementing a concatenation of competitive advantages.

------------------------------------------- INSERT TABLE II ABOUT HERE -------------------------------------------

Summing up, due to the intricacy of achieving and sustaining advantages in highly uncertain

24

and rapidly mutable contexts, existing approaches enlightening the sources of competitive

advantage seems progressively less applicable in contemporary fast-shifting business

environments in which competitive advantages turn temporary rather than sustainable.

Concurrently, the analysis of the core of TCA literature suggests that, for its potential

explanatory strength of the nature of competitive advantages in current high-velocity settings,

TCA inquiry has turned into a relevant area in strategic management inquiry. Therefore, we ask:

are the three strategy paradigms really mutually exclusive? Or can sustainable and temporary

advantages simultaneously coexist? As suggested by D’Aveni et al. (2010), these approaches

may be compatible to one another if, for instance, “some aspects of industries may be stable

while the firm level dyads are unstable due to temporary advantages.” In addition, since in a

world of temporary advantages a firm may have as many strategies as its competitors, “firm

may have a multiplicity of strategies” (p.1382). On the ground of the TCA arguments

previously examined, in the next section of the paper we shall extract the avenues for future

research.

CHALLENGES FOR FUTURE RESEARCH

By unveiling the state of the art and depicting the conceptual map of TCA literature, we

concurrently lay the groundwork to extract various avenues that are open for future research on

the key issue. In this section, we shall organize the agenda for future research on TCA largely

as a mirror image of the way we have proposed in the previous sections the review of TCA

literature. Furthermore, on this fertile soil we shall be able to pinpoint a few methodological

challenges that are suitable for further scrutiny in incoming TCA inquiry. Table III summarizes

the key points of the research agenda on TCA.

--------------------------------------------- INSERT TABLE III ABOUT HERE ---------------------------------------------

25

Antecedents of TCA

The conceptual map we have proposed encapsulates the accessible empirical evidence on the

widespread perception that organizational environments have become faster, more turbulent,

and more volatile. However, we also recognize that this body of literature overlooks three

relevant issues. First, it uncovers the lack of empirical studies on TCA specifically dealing with

uncertainty. As quite known, there exist various types of uncertainty: primary (or technology)

uncertainty, competitive uncertainty, and supplier uncertainty (Sutcliffe and Zaheer, 1998).

Furthermore, as these types of uncertainty fall short to appear independent to one another, it

would be interesting to appreciate their interrelations as well as to grasp how they jointly affect

the shifting nature of competitive advantage (SCA vs. TCA).

Second, while the conceptual map we have proposed considers the antecedents of TCA

in unconnected fashion (i.e., uncertainty and technological turbulence, time compression, and

interindustry convergence), it seems appropriate to tackle the combined effects of the

codependence among and between TCA antecedents. For instance, it might be appealing to

devote research efforts to appreciate how time compression and interindustry convergence may

jointly shape technological turbulence.

Finally, the systematic review we have supplied unveils a specific gap in our

knowledge concerning, on the one hand, how firms can respond to changes in the regulatory

environment due to government intervention (such as the liberalization of the economy, reform

of fiscal rules, change in labor laws, and so on) and, on the other, the impact of government

intervention on the sustainability of a firm’s competitive advantage. One might suppose that

government intervention is an additional antecedent of TCA. Accordingly, studies on the role

of institutional change and government intervention may advance our knowledge of TCA by

clarifying whether and why competitive advantages are becoming less sustainable, for instance

as concerns the duality between emerging and developed economies (Bamiatzi, et al., 2015;

Hermelo and Vassolo, 2010; Zheng and Mai, 2013).

26

Management of TCA

The conceptual map of TCA literature we propose suggests to analyze the management of TCA

by making a distinction between resource based perspective and action based perspective.

Consistently, we develop the research agenda on the management of TCA in two subsections

devoted respectively to resource based management of TCA and action based management of

TCA.

Resource based management of TCA

Regarding the management of TCA at the intrafirm level, the detection of CEO’s

psychological heuristics and biases might be helpful to understand the antecedents of

repertories of firm actions and responses. Some scholars advocate that CEO’s psychological

heuristics and biases portray a bright side and a dark side (Haynes, Hitt, and Campbell, 2015;

Picone et al., 2014). The conceptual map on TCA reveals that little attention has heretofore

been given to the prospect that these managerial heuristics and biases may be considered as an

effective solution to tackle TCA competitive settings.

Moving to the management of TCA at the firm level, future research may mingle

studies on strategic leadership and on dynamic capabilities to achieve TCA. For its essential

role and features strategic leadership appears closely connected to the firm’s functional

processes as well as to the renewal of structures necessary to achieve TCAs (Helfat and Martin,

2014). In addition, according to Wilden et al. (2013), it might be the case that dynamic

capabilities influence firm performance by means of TMT capabilities (such as functional

capabilities). We believe that this is a promising area of research for improving our knowledge

at the interface between three significant streams of inquiry: TCA, TMT, and dynamic

capabilities.

Focusing on the role of capabilities in managing TCA, strategic management research

27

argues that the accumulation of experience on rivals allows firms to achieve a series of TCAs;

in fact, firms that develop capabilities at faster rates can fill up a larger capability gap with the

same amount of experience (Rockart and Dutt, 2015). Therefore, the need to close the

capability gap lead entrepreneurs and executives to focus on the reduction of the time needed

to find or create unexploited opportunities. In this vein, we feel that we would profit from

studies exploring further how firms can win a TCA by exploiting customer segments that are

less developed (Katila et al., 2012) or by generating entirely new ones.

Likewise, we suspect that future studies should develop research related to the

management of TCA at the interfirm level. While the kernel of TCA management literature at

the interfirm level acknowledges the use of a portfolio of temporary strategic alliances to

leverage a series of TCAs (Andrevski et al., 2016), alliance studies show that the temporal

condition of permanent disequilibrium in which firms operate might dictate the timing of

alliance entry-exit strategies. Consequently, we encourage the investigation of the cause-effect

relationship between alliance portfolio and TCA management.

Furthermore, while we observe that TCA research has started to inspire inquiry of

strategic alliances temporal conditions, we recognize that other types of interfirm relationships,

such as firm clusters, platform markets, and entrepreneurial ecosystems, call for investigation

in the light of TCA. For instance, Baglieri et al. (2012) pinpoint that the role of interfirm

relations is particularly important within firm clusters, because a cluster can emerge and

develop thanks to their ability of leveraging the right network configuration. In the footsteps of

Baglieri et al., (2012), we propose to explore more dynamic and time-dependent approaches to

manage the cluster in which the firm is actively involved. In addition, we suggest to explore

the role of platform markets in the current competitive contexts. Scholars have argued that the

adoption of a platform depends on two key features (Cenamor, Usero, and Fernández, 2013): (a)

innovation characteristics; and (b) personal attitudes. Accordingly, industry convergence may

encourage platform providers to exploit a new series of opportunities of independent and

28

complex multisided markets. Hence, future research should take into consideration how

platform based markets may drive firms to achieve TCA.

Feature three of TCA management at the interfirm level regards entrepreneurial

ecosystems. Entrepreneurial ecosystems involve multiple relationships between entrepreneurs

and their ventures, universities, potential and actual industrial partners, trading partners,

finance providers, and government support (Wright and Stigliani, 2012). On one hand,

ecosystems promote cooperation among actors and the combination and recombination of

knowledge. On the other hand, the affiliation to an ecosystem makes it easier the imitation of

innovative firms and the erosion of competitive advantage (Wright and Stigliani, 2012).

Therefore, it would be interesting to study how entrepreneurial ecosystems contribute to turn

SCAs into TCAs.

Action based management of TCA

As concerns action based management of TCA, we identify four future lines of research. First,

as Tanriverdi et al. (2010: 832) argue, “we need to move away from static research designs and

toward dynamic research designs that recognize competitive dynamics, interdependencies in

networks of firms, the properties of competitive landscapes, and contextual interactions that

span multiple levels of analysis (e.g., networks, firms, products and services, and the IT-

enabled business platforms).”

Second, real option theory allows to juxtapose specific moves and countermoves and

generic path-dependent approaches to managing (and staging) investments under uncertainty

(Adner and Levinthal, 2004). To date, however, real option theory has fallen short to

operationalize the complexity and duration of cooperative projects and competitive responses

(Rindova, Ferrier and Wiltibank, 2010). The increased need for strategies that combine

competitive and cooperative actions to achieve TCA features the growing conceptual and

managerial importance of this emerging area of inquiry in strategic management.

29

Third, we observed that extant literature considers action based management of TCA

and resource based management of TCA in a separate fashion. However, since competitive

action combines a variety of factors, such as high price competition or high levels of

advertising, firms are prone to react or adapt their resources and capabilities to rivals’

competitive actions in order to achieve a TCA (Tsai and Yang, 2013). In this perspective, an

integration between resource based management and action based management of TCA is

required to fathom how the renewed resources possessed by firms depend on actions

undertaken by competitors, and vice versa, in a mutual cause-effect relationship. Future studies

should investigate the interaction between resource and action based management of TCA with

a focus on this value creation loop.

Four, the conceptual map we have presented shows that resource based management of

TCA is at the interface among strategic leadership, dynamic capabilities, and

interorganizational relationships. Action based management of TCA includes moves,

countermoves, and pattern over time. Interestingly, entrepreneurial mindset morphed into both

management approaches to TCA (i.e., resource and action based management of TCA) plays a

key role in firm transformation and competitiveness. For this reason, roughly 10% of the

articles recorded in our database dialogue within the strategic entrepreneurship research. The

common wisdom in this set of articles is that entrepreneurial mindset is crucial to single out

and exploit opportunities that emerge in a context characterized by uncertainty and technology

turbulence, interindustry convergence, and time compression. In fact, entrepreneurial mindset

is the fuel needed for mobilizing the firm’s vision and orchestrating the firm’s resources

necessary to achieve TCAs (Chirico et al., 2011) in both young and mature firms (Klein,

Chapman and Mondelli, 2013).

Consequences of TCA

Our conceptual map shows that the current debate on the consequences of TCA concerns the

30

volatility in firm performance and the crisis of the traditional measure of performance.

Drawing on the received literature, we are able identify a handful of research challenges. First,

while we recognize that conventional measures of performance have become ineffective in

symbolizing firm success or failure in fast-changing environments, extant research has

heretofore fallen short to provide measures of TCA. Accordingly, future research should seek

to shape a few measures to appropriately capture TCA. For instance, Shinkle, Kriauciunas and

Hundley (2013) emphasize the necessity to increase the range of specific market orientation

measures by taking into account the differences across countries and geographical spaces.

Second, TCA literature has hitherto overlooked to measure the duration of a temporary

advantage using the rate of convergence (persistence) of profits above or below the norm

(Villalonga, 2004). In our opinion, this measure is important in that it may shed light on the

crucial relationship between TCA and firm performance in different institutional contexts,

thereby facilitating the understanding of industry- and country-level effects of TCA.

Third, instead of limiting themselves to simply measure financial and market outcomes,

we encourage scholarly effort to use various alternative metrics to measure the consequences

of TCA. For instance, by entering a new country and developing a product, a firm could gain a

short-term advantage over rivals, though financial metrics may not adequately account for this

condition. Furthermore, while a firm might buyout another firm to walk into a new business,

conventional accounting measures do not capture this relevant condition.

Finally, future research may wish to explore appropriate performance measures to

detect the (changing) nature of TCA in emerging (Hermelo and Vassolo, 2010) and fragile

institutional contexts (Ault and Spicer, 2013). Since we know that the relative sustainability

degree of superior profits varies across countries due to variation in laws and regulations, one

might suppose that, at least in part, the country rules and regulations influence the achievement

of superior financial performance. Actually, regulatory conditions may deeply affect the

features of the capital markets, access to credit, availability of external financing, and other

31

factors, thereby influencing in various ways the firms’ financial performance.

Methodological Challenges

As Table I shows, a nontrivial part of the studies performed heretofore on TCA (64.47%)

displays an explicit quantitative flavor. As widely known, for its methodological reach and the

use of large sample databases, quantitative research is inherently targeted to supply coarse-

grained elucidations of TCA. For the sake of offering more fine-grained explanations of TCA,

it would be therefore beneficial to see an increase in qualitative studies on TCA. For instance,

we suggest to use a range of qualitative methods to explore the following research questions:

when do managers prompt or limit strategic change in the age of TCA? How can firms balance

exploration and exploitation for achieving a series of TCAs? When do psychological attributes

facilitate or hamper to gain TCA? By leveraging fine-grained analyses that are potentially able

to rejoin the above-mentioned quandaries, future qualitative inquiry may come to complement

extant quantitative research on TCA, thereby providing a clearer appreciation of the emergence,

processes, and management of TCA.

Finally, as it is easy to observe the conceptual map proposed offers a linear

interpretation of TCA literature (the sequence antecedents, management, and consequences).

Notwithstanding that, one might suppose that the chain sequence of TCAs may turn into a loop,

in such a way that it would be awkward to discern the boundaries between antecedents and

consequences. In this vein, we encourage scholars to pay attention to the endogeneity problems

among variables that might emerge when they run empirical analyses of TCA.

CONCLUSION

By investigating the core of TCA literature, this paper contributes the current body of work on

competitive advantage. Actually, it advances a threefold contribution. First, we have analyzed

the existing literature on TCA in a systematic and consistent fashion. Thanks to the conceptual

32

map of antecedents, management, and consequences of TCA, encompassing studies on TCA

published in major academic journals in the last five years (2010-2015), the paper reveals the

content of a truly fragmented landscape relevant for scholars interested to approach this topic

to into more .

Second, drawing on the literature review, we show that the search for competitive

advantage based on static industry positioning (according to the structure-conduct performance

paradigm), or on rare and valuable resources (according to the resources-capabilities-

performance paradigm) has increasingly turned insufficient, while the core of TCA literature

suggests that this are of inquiry has turned into an emergent and promising research area.

Finally, on the ground of the conceptual map we advanced, we have managed to

pinpoint at a handful of open challenges that may turn into opportunities for future research to

scholars interested in stretching the contours of current TCA literature.

33

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Table I. Distribution of articles on TCA per journals, methods, and years

Journals with the highest frequency Method

Number of articles % of articles

Number of articles

% of articles

AMJ 8 10.53% Multi-Method 3 3.95%

AMP 2 2.63% Qualitative Research 10 13.16%

ISBJ 1 1.32% Quantitative Research 46 60.53%

ISR 3 3.95% Theoretical discussion 9 11.86%

JOM 7 9.21% Others 15 10,53%

JOPM 3 3.95%

JPIM 3 3.95% Year

MD 4 5.26% 2010 - 2011 9 11.84%

SEJ 5 6.58% 2012 10 13.16%

SMJ 18 23.68% 2013 20 26.32%

Others 22 28.95% 2014 12 15.79%

2015 25 32.89%

Note: AMJ = Academy of Management Journal; AMP = Academy of Management Perspectives; ISBJ = International Small Business Journal; ISR = Information systems research; JOM = Journal of Management; JOPM = Journal of Operations Management; JPIM = Journal Product and Innovation Management; MD = Management Decision; SEJ = Strategic Entrepreneurship Journal; SMJ = Strategic Management Journal.

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Table II: Main features of the key approaches in strategic management inquiry

Sustainable Competitive Advantage Temporary Competitive

Advantage Approach

Structure-Conduct- Performance

Resource-Capability- Performance

Configuration Static: comparison

between two points in time

Static/dynamic Dynamic: exchange of actions and

responses between two firms

Rents Chamberlinian Rents Ricardian Rents

Schumpeterian Rents

Competitive advantage is time-dependent and ephemeral; only

relative advantages exist Temporary rents Kirznerian Rents

Competitive advantage

Products Resource/factor heterogeneity

Products and/or resources

Basic principle Industry structure drives

competition and profitability

Firm resources are the basis for profitability

Competition is dynamic and interactive; actions/responses drive

firm performance

Intellectual root Mason-Bain Industrial

Organization Economics

Penrose, managerialism, Chicago Industrial

Organization Economics

Theoretical and empirical work in strategic management extended

from Schumpeterian and Austrian economics

Focus (Five) competitive

forces that make up the industry structure

VRIO framework Action/response patterns and/or

individual action

Analytical level Industry level Firm level Intra firm, firm and interfirm level Balance weight market-resource

(or firm external-internal) Power Relations between Firms

Symmetrical Asymmetrical Tendentially asymmetrical

Competitive strategy

Generic types Generic types Sequences of actions and responses

Concatenation of competitive advantages

Sources: Chen and Miller (2012), Foss, Knudsen and Montgomery (1995), and Mocciaro Li Destri and Dagnino (2003), with adaptations

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Table III. Opportunities for future research on temporary competitive advantage

Research Challenges

Antecedents of TCA

To explore the interrelations among primary, competitive, and supplier uncertainty and how they jointly affect the nature of competitive advantage To investigate the aggregate effects of the codependence among technological turbulence and interindustry convergence To inspect how timing compression and interindustry convergence shape the technological turbulence To examine how firms respond to changes in regulatory environment leading TCA

Resource based management of TCA

To identify what CEO’s psychological heuristics and biases may be considered as an effective solution to face TCA competitive setting To detect the relation between dynamic capabilities and performance and the moderating role of TMT competencies To explore how firms reap a TCA by exploiting less developed customer segments To investigate the cause-effect relationship between TCA and alliance portfolio management To inspect a dynamic approach to manage the cluster in which the firm is involved To examine how various sides within platform-based markets helpful for achieving TCA via complementary products To identify how entrepreneurial ecosystems contribute to make temporary the competitive advantage

Action based management of TCA

To move toward dynamic research designs that recognize competitive dynamics, interfirm cooperation and their interplay on performance To take advantage from real option theory to juxtapose specific moves and countermoves and more generic path-dependent approaches to managing investment on a series of TCAs under uncertainty To integrate resource based management and action based management for understanding the competition in the age of TCA To examine the interactions between resource and action based management of TCA with a focus on value creation

Consequences of TCA

To increase the range of specific market orientation measures taking into account the difference across countries To use measures of the duration of an advantage using the rate of convergence (persistence) of profits above or below the norm To use a variety of metrics to measure the consequences of TCA instead of just limiting it to financial or market outcomes To explore appropriate performance measures to analyze the nature of TCA in emerging institutional contexts

Methodological Challenges

To investigate the processes underlying TCA via qualitative research To discern causal dynamics among key variables along various levels of analysis

To reduce the endogeneity problems due to the circular sequence of TCA antecedents, management and consequences that might occur in empirical analyses

Figure 1. A snapshot of the core of temporary competitive advantage literature

Core 1: 8 articles published in SMJ

special issue

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Figure 1. A snapshot of the core of temporary competitive advantage literature

Core 4: Citations from 10 journals with the highest frequency (54 articles)

Core 3: Citations identifiedby the analysis of TCAarticles after removing those that supply literature reviews (76 articles)

Core 2: Total citations collected by the articles of the special issue in ISI Journals with 5-years impact factor greater than 2 in 2012 (94 articles)

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Figure 2. Conceptual map of temporary competitive advantage literature

ANTECEDENTS CONSEQUENCES MANAGEMENT

Resource based management

Interindustry convergence

Time compression

Uncertainty and technology turbulence

Interfirm level

Intrafirm level

Firm level a) Sensing and shaping opportunities and threats b) Seizing opportunities c) Enhancing, combining, protecting, and reconfiguring the assets

Action based management

Firm moves and countermoves

a) Timing

b) Rapidity

Patterns over time

a) Competitive sequences

b) Path dependence

Volatility in performance

Crisis of traditional measures of performance

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Appendix. Articles on temporary competitive advantage

Author Year Journal Conceptual Approach

Methods Key points related to TCA

Andrevski, Brass and Ferrier

2013 JoM Competitive dynamics

Quantitative research

Authors contribute to competitive dynamics by introducing alliance portfolio configuration as an important antecedent of competitive action frequency. Specifically, alliance portfolio configurations enhance: (a) opportunity recognition capacity as evidenced by the portfolio attribute of structural holes; (b) opportunity development capacity as indicated by R&D alliance scope, and (c) action execution capacity as exhibited by equity alliances with trusted partners.

Andrevski, Richard, Shaw and Ferrier

2014 JoM Knowledge-based view and competitive dynamics

Quantitative research

Managerial racial diversity increases a firm’s ability to recognize and exploit opportunities for developing competitive actions and thus to concatenate numerous TCAs that lead to superior performance. Then, authors specify that competitive intensity is an important mediator of the relationship between managerial racial diversity and firm performance.

Ault and Spicer 2013 SMJ Institutional contingency perspective

Quantitative research

Managers need to carefully analyze variance in institutional contexts around the world when they evaluate the potential ability of a specific business practice. Actually, authors show that the growth of commercial microfinance is greatest in those countries with high levels of poverty but low levels of state fragility.

Ayyagari, Dau and Spencer

2015 AMJ FDI spillovers and business groups literature

Quantitative research

Authors show that (a) although business group affiliates are less likely to announce expansions overall, they may be more sensitive to international firm investment announcements than stand-alone firms; (b) firms that are core to the group are more likely than peripheral group members to make investment announcements in the wake of foreign direct investment. From this perspective, some implications of business groups’ affiliation for TCAs are recognizable.

Baglieri, Cinici and Mangematin

2012 TC Technology life cycle theories

Qualitative research

Interfirm relations own themselves inner forces to sustain their rejuvenation by leveraging prior knowledge base.

Bamiatzi, Bozos, Cavusgil and Hult

2015 SMJ Institutional theory, Resource based view, Industrial Organization theory

Quantitative research

Authors find that: 1) firm and industry effects in recessionary periods are respectively higher and lower than those in expansionary periods; 2) country effects in emerging economies are weaker during recessionary economic periods as compared to expansionary periods. As antecedents of TCAs, authors advocate that it is not the industry effects that solely affect firm performance, but rather the combined country-industry effect.

Bengtsson and Johansson

2012 ISBJ Coopetition theory

Qualitative research

Authors suggest the importance of flexibility and agility in TCA competitive arena. The role of flexibility is related to the mindset needed to meet different sets of expectations and the capability to uphold different roles, sometimes with conflicting role expectations.

48

Author Year Journal Conceptual Approach

Methods Key points related to TCA

Agility is needed for entrepreneurial activeness, alertness and rapid responsiveness are crucial abilities for SMEs to create and sustain opportunities. Authors also discuss how coopetition is helpful to increase flexibility and agility.

Ben-Oz and Greve

2012 JoM Behavioral theory, prospect theory, and organizational learning theory

Quantitative research

Absorptive capacity is important because dynamic environments and high competition put a premium on the organizational ability to update its knowledge stocks. In highly dynamic environments, organizations focus on the type of learning that produces general knowledge that can be used across a wide range of future environmental states.

Berends, Jelinek, Reymen and Stultiens

2014 JPIM Effectuation theory

Multimethod study

Small firms seldom adhere to formalized new product development approaches, engage in little planning, and omit activities often advocated as best practice in large firms. However, as authors show, product innovation in small firms cannot be dismissed as merely unplanned, chaotic, improvisational, or ad hoc.

Bharadwaj and Dong

2014 JPIM Resource based view, dynamic capabilities view

Quantitative research

Market sensing can serve as a core competence that provides the basis for TCAs. Marketplaces are characterized by compressed product life cycles, increased global competition, and slower growth. This implies that firms must learn to compete successfully in an age of temporary advantage.

Bingham and Davis

2012 AMJ Organizational learning

Qualitative research

Authors explore the consequences of learning sequences in their shorter-term versus longer-term performance impacts. Soloing sequences appear better than seeding sequences in the shorter term.

Bridoux, Smith and Grimm

2011 JoM Competitive dynamics and resource based view

Quantitative research

Authors discuss competitive dynamic actions: (a) leveraging actions in product markets, they have the most immediate effect on firm performance, but that their total impact over time is not significant (b) leveraging actions in the regulatory arena, they improve performance in the medium to long term; (c) bundling actions, that positively affect firm performance. However, this impact appears to be more long lasting.

Brush, Dangol and O'Brien

2012 SMJ Switching cost theory and customer capabilities

Quantitative research

Authors show that customer capability-based switching costs can increase temporary revenues, albeit switching costs are associated with profits only when interacted with banks’ cross-selling capabilities. Authors find that only those banks that can successfully combine the firm’s internal cross-selling capabilities with the customers switching costs can increase firm performance.

Campbell, Campbell, Sirmon, Bierman and Tuggle

2012 SMJ Agency theory Quantitative research

When CEO has higher discretion and firm has greater level of intangible resources, it is more critical to nominate CEO. These conditions typically in TCA contexts allow managers to pursue their benefits at expenses of shareholders.

Castellaneta and Gottschalg

2014 SMJ Corporate effect and private equity

Quantitative research

Authors show that private equity firm effect grows over time and becomes stronger under the three contingencies: value addition vs. selection, developed vs. emerging economies,

49

Author Year Journal Conceptual Approach

Methods Key points related to TCA

literature and economic downturns. Implications for TCA are traceable. Cenamor, Usero and Fernandez

2013 TC Technology adoption and network effects

Quantitative research

Authors maintain that platform providers managing both a platform and a complementary product portfolio face several difficulties that may reduce the incentives to adopt platform strategy for achieving TCAs.

Chakravarty et al.

2013 ISR Dynamic capability view

Quantitative research

Authors suggest that information technology competencies build organizational agility, whether the agile capabilities are entrepreneurial or adaptive in nature. They are unique, because they not only create dynamic capabilities directly (e.g., entrepreneurial agility) but also help activate those capabilities for TCAs.

Chen and Miller 2015 SMJ Competitive dynamics

Theoretical approach

Authors develop a conceptual framework that expands competitive dynamics along five dimensions aims of competition, mode of competing, roster of actors, action toolkit, and time horizon of interaction.

Chesbrough and Chen

2013 CMR Intellectual property

Not applicable

Authors propose that firm should consider strategic alternatives and they have also been encouraged to see a number of new public-private partnerships announced. Those firms that become pro-active licensors and licensees of internal and external IP will develop the ability to profit from their IP in multiple business models, potentially improving the lives of patients around the world in the process.

Chintakananda and McIntire

2014 JoM Real option and network theory

Theoretical approach

Authors argue that when entering high network intensity markets with a dominant design under TCA conditions, the amount of investments needed to develop a presence may be extremely high. Firms entering low network intensity markets with a dominant design take advantage in developing a small niche market. Without a dominant design and with low network intensity, firms have to consider the trade-offs between growth opportunities and costs.

Chirico and Bau 2014 JSBM Stewardship perspective and agency theory

Quantitative research

Family firms are heterogeneous entities based on the percentage of family members on the TMT and that family firms perform differently depending on the dynamism of the environment in which they operate.

Chirico et al. 2011 SEJ Resource orchestration and entrepreneurial orientation

Quantitative research

Authors show that both resources endowment and their utilization are important to seize entrepreneurial opportunities. In this perspective, family firms to benefit from entrepreneurship in the age of TCA require the synchronization of entrepreneurial orientation, generational involvement, and participative strategy.

Clarysse, Bruneel and Wright

2011 SEJ Resource based view

Case study Authors find that resource acquisition is associated with acquisitive growth to build a resource portfolio if the environment is relatively instable. In addition, resource accumulation is typically financed by external capital from specialized venture capitalists.

Danneels 2012 SEJ Dynamic capability view

Quantitative research

The effect of the competences on firm performance is contingent on competitive turbulence in opposite ways: the effect of marketing competence on performance is positive under stable and moderate competitive conditions, whereas the effect of R&D competence on performance is positive under volatile competitive conditions.

50

Author Year Journal Conceptual Approach

Methods Key points related to TCA

Danneels 2015 SMJ Dynamic capability

Quantitative research

Authors find that R&D competence predicts later technological accumulations, while marketing competence does not predict market related resource accumulation. Different attitude of resources to be accumulated may affect the emergence of TCA.

Duran et al. 2015 AMJ Family firms and innovation literature

Quantitative research (meta-analysis)

Family firms are particularly well-suited to deploying resources in an efficacious way and to turning innovation input into innovation output. This effect depends on the institutional context, and it is particularly strong when the CEO is from the family, but turns to the opposite when the founder remains the CEO.

Giacchetti and Dagnino

2014 SMJ Competitive dynamics

Quantitative research

Firm’s competitive responses in terms of product line extension are different when faced with different levels of competitive patterns over time: high level of competitive intensity encourages firms to reduce the length of their line. Low and moderate levels of competitive intensity relate positively to product line length, but high levels of competitive intensity are likely to encourage firms to reduce the lengths of their product lines in favor of better product line coherence.

Hashai, Kafouros and Buckley

2015 JoM Strategic alliances

Quantitative research

Authors advance the literature on the speed of strategic moves by explaining how the profitability consequences of such speed are influenced by the moderating effects of expansion regularity and the duration of existing strategic engagement. The profitability implications of alliances depend not only on the attributes of alliance portfolios but also on differences in the alliance portfolio expansion process.

Hitt et al. 2011 AMP Strategic entrepreneurship

Theoretical approach

The antecedents of TCA lead multiple challenges for firms seeking to create value and wealth. Strategic entrepreneurship allows the firm to apply its knowledge and capabilities in the current environmental context while exploring for opportunities to exploit in the future by applying new knowledge and new and/or enhanced capabilities.

Hsieh, Tsai and Chen

2015 AMJ Escalation behavior perspective and competitive dynamics

Quantitative research

Authors indicate how reference to competitors with varying relative sizes can provide justifications for further commitment to an underperforming initiative in the era of TCA.

Huang, Dyerson, Wu and Harindranath

2015 BJM Industrial Organization and Resource based view

Quantitative research

Authors find that a firm’s market position in an industry is positively associated with a TCA. They also argue that technological resource and capability position can sustain the emergence of a series of TCAs.

Innoue, Lazzarini and Musacchio

2013 AMJ Institutional theory, agency theory and transaction cost

Quantitative research

Authors advance the literature on institutional voids by proposing ways in which local policies may be promoting instead of limiting. Minority state capital allows resource-constrained firms to invest in productive assets and profitable projects, interacting with private strategies to foster TCA.

Iriyama, 2015 SMJ Competitive Quantitative Authors connect specific competitor threats and specific actions in non-market and

51

Author Year Journal Conceptual Approach

Methods Key points related to TCA

Kishore and Talukdar

dynamics research resource market arenas, and show that firms take different competitive actions in systematic ways depending upon varying levels of perceived threats from multiple competitor groups simultaneously.

Jha and Lampel 2014 RP Competitive dynamics theory and technological evolution

Qualitative research

Authors examine the link between technological knowledge formation at the industry level and firm level competition, thus demonstrating the emergence of repertoire simplicity over a series of competitive episodes. They show that simplicity is the product of interaction between individual level learning and population level. This study makes a clear distinction between convergence and simplicity, but what it is more important is that it examines their interaction with specific attention to how competition rivalry links convergence with the simplicity.

Johnson, Martin and Saini

2012 IMM Strategic orientations

Quantitative research

Various elements in the firm's strategic orientation influence market orientation. These elements particularly relevant in TCA age are: aggressiveness, future orientation, marketing formalization, and risk proclivity.

Kastalli and Van Looy

2013 JOPM Servitization theory

Quantitative research

Authors suggest that an integrated product-service business model creates opportunities for growth beyond the installed product base by relying on related services. The presence of the reciprocal, positive revenue relationship between products and services may be seen as an indicator of complementarities on the customer side indispensable for achieving TCA.

Katila, Chen and Piezunka

2012 SEJ Competitive dynamics and evolutionary theory

Quantitative research

In new markets while high-performing large firms focus on the quantity of moves, entrepreneurs focus on their timing to emphasize different aspects of moves, in order to search for opportunities that are left unexploited by large firms. In these markets, customer segments have not developed, rivals are often fewer, and advantages are likely to be highly temporary.

Keyhani, Lévesque, and Madhok

2015 SMJ Theory of disequilibrium

Analytical approach

“Creation and discovery are highly synergistic and complementary and of limited value in isolation” (p. 90). Authors posit the importance of simultaneously creation and discovery for achieving TCA.

Kim et al. 2015 RP Industry convergence

Quantitative research

Authors argue that the degree of industry convergence originates downstream. The resource based implications are linked with the absorptive capacity, while the action based implication are related to the inter-organizational diversification and path dependence over strategic actions.

Kownatzki et al. 2013 AMJ Strategic decisions making

Multimethod approach

This study focuses on decision speed in established, large, and diversified firms. Speed is a key characteristic to gain TCAs. Authors show that goal setting, extrinsic incentives, and decision process control positively influence business unit level decision speed, while strategy imposition slows down business units’ decision making.

Larreneta, Zahra and Gonzalez

2014 SMJ Competitive dynamics

Quantitative research

While firms may follow a few simple rules in their decision making, they still need to choose between varied and simple competitive actions; these actions may also have a

52

Author Year Journal Conceptual Approach

Methods Key points related to TCA

more tactical than strategic character in hypercompetitive industries. Firms could follow a sequence of simple strategic actions by employing simple and varied strategic repertoires at different points in time, building up a sequence of strategic actions.

Lee, Sambamurthy, Lim, and Wei

2015 ISR Organizational adaptation

Theoretical approach

Authors show that information technology capability is a driver of ambidexterity. Specifically, it supports the operational ambidexterity and the importance of this effect is related to the environmental dynamism.

Lejeune 2011 MD Capability based view

Qualitative research

Authors discuss the role that different types of pressures play on improving product quality: (a) external pressures from improving competitors, thus rising the benchmarking in the accredited group; and (b) internal pressures to keep on innovating and advancing in both quantity and quality.

Lin and Rababah

2014 LQ Upper echelon theory

Quantitative research

Authors suggest that “the interpersonal interactions that occur within a TMT should be considered as a key strategic issue, rather than a trivial matter of personal relations” (p. 952). Specifically, they affect the level of openness, agreeableness, conscientiousness, and extraversion of TMT.

Mackelprang, Habermann, and Swink.

2015 JOPM Organizational information processing theory

Quantitative research

Authors test the effectiveness of the organizational information processing theory. They find that innovative firms also suffer from high level of unexpected product failure costs. Additionally, they argue that “such cost effects extend well beyond the simple direct impacts of processing warranty claims, producing significant increases in SGA costs, and also augments in inventories and fixed assets required to support sales” (p.82).

Madhok, Keyhani, and Bossink

2015 SO Resource based view

Theoretical approach

Authors observe that the competitive context is dynamic and unstable; as a consequence firm should learn to manage relational rents. They address the issues related to frequent adjustments in alliance evolution as well as the risks of alliance termination.

Magitti, Smith and Katila

2013 RP Complexity theory

Qualitative research

Authors find that the search and discovery process of technological invention is inherently complex: nonlinear and disjointed rather than linear and cumulative. Implications for TCA might be considered.

Markman, Waldron and Panagopoulos

2015 AMP Institutional theory

Theoretical approach and analytical approach

Authors show how nonmarket players (activists, environmentalists, social entrepreneurs) as posing a remarkable threat to firms, affect the firm’s vulnerability as well as the competitive dynamics.

Mciver et al. 2013 AMR Knowledge management

Theoretical approach

By distinguishing knowledge in practice types associated with different work contexts, authors discuss under which conditions some activities effectively support the creation, understanding, and application of relevant knowledge, which in turn affect TCA.

Murali and Parthiban

2012 SMJ Institutional theory

Quantitative research

Authors show that sustainability of superior profits differs across country contexts and varies with cross-country differences in laws and regulations that promote competition. Investment in R&D, and greater investments in marketing and advertising provide a measure of protection against the negative effect of reforms on the sustainability of

53

Author Year Journal Conceptual Approach

Methods Key points related to TCA

superior profits, while business groups’ affiliation and foreign firms’ affiliation do not. Murmann 2013 OS Coevolutionary

perspective Historical case study

Organizational environments are becoming faster, more competitive, and more turbulent, creating a greater opportunity for influencing features of the macro environment. In this context, author advances the theory of coevolution by identifying inductively how specific causal mechanisms connect to the fundamental variation, selection, retention processes that drive the evolution of populations.

Nadkarni, Chen, and Chen

2015 SMJ Austrian view of market

Quantitative research

Authors disentangle the role of executive temporal depth in shaping competitive aggressiveness is contingent on industry velocity.

Ndofor et al. 2011 SMJ Resource-based view and competitive dynamics

Quantitative research

Authors show that competitive actions partially mediate the relationship between technological resources and performance. Specifically, the breadth of a firm’s patent portfolio affects the complexity and deviance of the firm’s competitive behavior in the context of technology-intensive firms.

Paeleman and Vanacker

2015 JMS Resource constraints literature and resource slack literature

Quantitative research

“Firms with selective constraints that combine slack in financial resources with constraints in human resources exhibit superior performance without decreased survival prospects” (p. 1).

Pahnke, McDonald, Wang, and Hallen

2015 AMJ Strategic entrepreneurship

Quantitative research

Authors recognize a set of contingencies that weak the impact of early relationships on innovation at entrepreneurial firms.

Park and Patel 2015 JMS Signaling theory Quantitative research

Authors explore the impact of industry instability on the variance of valuation of IPO firms by considering both an internal point of view and external perspective.

Reina, Zhang and Peterson

2014 LQ Executive personality literature and upper echelons research

Quantitative research

Authors recognize bright and dark sides of CEO narcissism. They introduce the organizational identification as moderator in the relation between CEO narcissism and TMT behavioral integration. The implications for performance are discussed.

Ritala 2013 MD Knowledge based view and capability approaches

Theoretical approach

Authors discuss, in terms of the dynamic capabilities view, how organizations achieve TCA. Firms should overcome “rigidity trap” of routines, which are no useful in situations where unfamiliar changes are requested.

Rockart and Dutt

2015 SMJ Knowledge based view

Quantitative research

Authors focus on the impact of project size on firms’ capability development trajectories. They argue that differences in firms’ activities affect both the transient and the equilibrium emergence of capability development trajectories. Clearly, capability development trajectories in turn affect the achievement of TCAs.

54

Author Year Journal Conceptual Approach

Methods Key points related to TCA

Ross and Sharapov

2015 AMJ Competitive dynamics

Quantitative research

The technology turbulence and the time compression that characterize today competitive context are challenging for firms “because rivals must take both the strategies of their competitors and possible performance-altering changes in the environment” (p. 677).

Ruckman, Saraf and Sambamurthy

2015 ISR Imitation theory Quantitative research

Drawing on the insight that the sustainability of competitive advantage is eroded by imitation, authors explore the conditions that facilitate imitation. They show that “the imitation of similar firms is widespread, whereas the imitation of largest firms or offering popular service-lines, which indicates bandwagon effects, are at play only selectively” (p.100).

Shaw, Park and Kim

2013 SMJ Resource based view

Quantitative research

Authors supports that when human resource management investments are high (as the achieving of TCA requires), an increase of the connectedness creates path-dependence, time-compression diseconomies, and social complexity. Once the superior, advantage-granting human capital has sustained initial losses, further depletions should be less damaging to performance.

Shinkle, Kriauciunas and Hundley

2013 SMJ Institution-based view of strategy

Quantitative research

Authors discuss the importance of pure versus mixed business strategies (high differentiation or high cost leadership) across institutional environments. They find that positive slopes of the high pure strategy performance outcomes are consistent with arguments that pure strategies work best in more market oriented environments. The outcomes of a high mixed strategy decline markedly with increasing market orientation.

Sirmon et al. 2011 JoM Resource-based view and resource orchestration

Theoretical approach

Authors argue that breadth, depth, and life cycle affect how managers manage their firm’s resources to maximize the likelihood of achieving TCAs.

Su et al. 2014 JOPM Dynamic capability-based view

Qualitative research

Meta-learning, sensing weak signals, and resilience to quality disruptions are helpful to sustain competitive advantage. Authors advocate the importance of strategic actions rather than static endowment of resources for achieving TCA.

Tanriverdi, Rai and Venkatraman

2010 ISR Information system strategy

Research commentary

Authors reframe three quests of research on information systems: the strategic alignment quest, the integration quest, and the sustained competitive advantage quest. The three quests have become less relevant in increasingly complex adaptive business systems, where the competitive performance landscapes of products and services are highly dynamic and co-evolve. The importance of firm’s agility is discussed.

Trkman, Budler, and Groznik

2015 SCM Business model Theoretical approach and qualitative research

Authors extend the domain of supply chain management. They suggest that business model also includes the relevance of knowledge transfer and dynamic capabilities for gaining TCAs.

Tsai and Yang 2013 IMM Contingency theory and Resource based

Quantitative research

The performance effect of firm innovativeness becomes increasingly positive as market turbulence and competitive intensity simultaneously increase. Under conditions of high market turbulence and high competitive intensity, firm innovativeness maximizes

55

Author Year Journal Conceptual Approach

Methods Key points related to TCA

view business performance. Conversely, the positive effect of firm innovativeness on performance is limited when market turbulence and competitive intensity are both low. This positive relationship is neutralized by stable customer preferences coupled with radical competitor attacks.

Vassolo, De Castro and Gomez-Mejia

2011 AMP Institutional perspective

Not applicable

The institutional context, the macroeconomic environment, the consumer profile, and the availability of natural resources are important antecedents of managerial actions and have important implications for maintaining the sources of competitive advantages. Authors also argue that, while weak institutional contexts inhibit firm’s asset reconfiguration, firms face the worst institutional context for asset reconfiguration but, simultaneously, higher arbitrage opportunities due to the volatile context.

Wang, Libaers and Jiao

2015 JPIM Echelon theory and information-processing perspective

Quantitative research

Since strategic flexibility enables firm’s capacity to innovate and rapidly to achieve TCAs, authors explore how firms may enrich their strategic flexibility. Authors investigate how TMT cohesiveness (defined by TMTs’ shared vision and TMTs’ social integration) affects decision-making and, in turn, the strategic flexibility.

Warnier, Weppe and Lecocq

2013 MD Resource based theory

Theoretical approach

In turbulent environments where seems difficult a priori to generate a sustainable competitive advantage with ordinary and junk resources, it is perhaps possible to use the combination of ordinary and junk resources to develop a temporary advantage.

Wei, Hu, Li, and Peng

2015 MD Competitive dynamics

Quantitative research

Authors “advance the understanding of competitive interaction framework based on competitive dynamics theory that investigates how nonmarket and market factors concurrently affect the relationships among action and response, their integration, and initiating firm performance” (p. 512).

Wilden et al. 2013 LRP Contingency theory and dynamic capabilities

Quantitative research

Dynamic capabilities provide a basis for adapting to competitive pressures and for survival. Their potential to achieve superior performance outcomes is contingent upon their fit to the internal organizational structure and the external environment. So in environments within which their firms face little or no significant competition, investment in dynamic capabilities may be considered to be lower priority. When ample dynamic capabilities are present, it is better an organic organizational structure.

Woodard et al. 2013 MIS Competitive dynamics

Qualitative research

Design moves can be viewed as traces of sense-making in dynamic and turbulent environments where competitive advantages are often short-lived. Design options and the corresponding penalties of incurred technical debt can link the complexity of an uncertain future with a firm’s decision to manage its design capital for temporary and sustainable competitive advantage.

Wu et al. 2013 SMJ Technology strategies

Qualitative research

Authors explore why incumbent firms often invest significant amounts in radical innovations, but develop inferior versions of the new technology. When complementary assets are specific to a less promising technological trajectory, the incumbent deals with a trade-off between fully leveraging its complementary assets and choosing a more

56

Author Year Journal Conceptual Approach

Methods Key points related to TCA

promising technological trajectory. Indeed, if the incumbent has amassed a sufficiently large stock of complementary assets, these assets may create an incentive to invest significantly more than the entrant.

Zheng and Mai 2013 SEJ Strategic Entrepreneurship

Quantitative research

Authors find that in emerging economies, where market supporting institutions are deficient, founding teams with strong transactive memory systems are less inclined to acquire external knowledge but are more prone to improvise in response to surprises.

Note: We exclude literature reviews (Bruton, Filatotchen, Steven and Wright, 2013; Chen and Miller, 2012; Foss and Lyngsie, 2014; Friesl and Larty, 2013; Garud, Teortscher and Van de Ven, 2013; Grant and Verona, 2015; Helfat and Martin, 2014; Hitt, Xu and Carnes, 2015; Josefy, Kuban, Ireland, and Hitt, 2015; Klein, Chapman and Mondelli, 2013; Mukherjee, Gaur and Datta, 2013; Weber and Tarba, 2014; Wright and Stigliani, 2012; Zachary, Gianiodis, Payne, and Markman, 2014; Zahra, Wright and Abdelgawad, 2014) and three papers that give credit to special issue articles for aspects unrelated to TCA (Jung, Vissa, and Pich, 2015; McGrath, 2015; Campbell, Sirmon and Schijven, 2015). AMA = Academy of Management Annals; AMJ = Academy of Management Journal; AMP = Academy of Management Perspectives; AMR = Academy of Management Review; BJM = British Journal of Management; CMR = California Management Review; IJMR = International Journal of Management Reviews; IMM = Industrial Marketing Management; ISBJ = International Small Business Journal; ISR = Information Systems Research; JIM = Journal of International Management; JMS = Journal of Management Studies; JOM = Journal of Management; JOPM = Journal of Operations Management; JPIM = Journal Product and Innovation Management; JSBM = Journal of Small Business Management; LQ = Leadership Quarterly; LRP = Long Range Planning; MD = Management Decision; MIS = MIS Quarterly; OS = Organization Science; RP = Research Policy; SEJ = Strategic Entrepreneurship Journal; SMJ = Strategic Management Journal; SO = Strategic Organization; SCM = Supply Chain Management: An International Journal; TC = Technovation (TC).

i Some scholars repeatedly advocated the integration in strategy analysis of exogenous and endogenous features of the firm, deemed as non-contradictory and essentially complementary traits (Barney and Zajac, 1994; Cockburn et al., 2000; Grant, 1991). ii An alternative method for selecting the articles might be the number of citations. Since the conceptualization of TCA is relatively recent, taking this approach may fall short to be fully consistent. iii We acknowledge that Dierickx and Cool (1989) pioneering proposed the conceptualization of time compression diseconomies. iv Scholars suggest that the mere safekeeping of dynamic capabilities is not enough: the activation and the exercise of capability are necessary to sense and seize the opportunities and to circumvent the threats that urge firms to undertake adaptive actions. Firms need to deploy the necessary resource endowments to launch appropriate competitive actions (Chakravarty, Grewal and Sambamurthy, 2013) in addition to keeping their dynamic capabilities. v Interestingly, this combination of knowledge has been defined as an improvisation “on the fly” (Ritala, 2013).