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Received 17 February 2002
Key words: philosophy; logic; competitive advantage; pragmatism
The recent increase in philosophy of science articles in strategic management reflects researchers' rising concerns with understanding and securing the field's intellectual foundations. This article argues for a proactive approach to the philosophy of strategy, and for the rejection of conventional, 'off-the-shelf' philosophies that neither contemplated, nor can assimilate, the epistemological messiness and action-connectedness of strategic management. The article responds to Rodolphe Durand's critique, revisits the logic of competitive advantage, and makes the case for a pragmatist philosophy of strategy. Copyright (c) 2002 John Wiley &Sons, Ltd.
My earlier article (Powell, 2001) explored the epistemological and ontological foundations of strategy research. The task was necessarily analytical and critical, but the message was redemptive. The philosophical foundations of strategy research are not, in my view, either radical or conventional -they are neither objectivist nor subjectivist, rationalist nor empiricist, positivist nor postmodern. The paper told two stories: one of why strategy research cannot rely on conventional logical and philosophical justifications, and another showing the redemptive promise of pragmatist epistemology.
The article elicited a number of responses. Some of them, like Durand's, did not agree with its conclusions, but they agreed unanimously on the importance of understanding the field's intellectual foundations. The recent upsurge of philosophy articles is encouraging, and attests to the willingness of strategy researchers to engage in this debate (e.g., Priem and Butler, 2001a, 2001b; Barney, 2001; Mir and Watson, 2000, 2001; Spanos and Lioukas, 2001; Bronn, 1998; Kwan and Tsang, 2001).
Durand raises four objections, and I thank the Strategic Management Journal editors for this opportunity to respond. The objections are:
1. Logic and competitive advantage-that it is possible to show that competitive advantages cause sustained superior performance by using the 'INUS' logic of non-deterministic necessary and sufficient conditions.
2. Competitive disadvantage-that competitive disadvantage is not a useful construct when reframed using non-negative propositions.
3. Firm heterogeneity and tautology-that, under Kantian reasoning, the assumption of firm heterogeneity is not tautologous.
4. Strategy and pragmatist philosophy-that pragmatism is relativistic and postmodern, reducing strategy research to semantic debates and subjectivity.
The following sections address these objections in order, and the final section adds further observations on philosophy and strategy research.
LOGIC AND...