Paradoxes in the RBV?
| Nicolai Foss |
One of the hallmarks of pomo (postmodernist) "discourse" (or "conversation") is the indiscriminate use of the word "paradox." In management, organizational scholars are particularly prone to use the p word. I have sat in countless seminars and witnessed several conference presentations where the presenters declared some paradox to exist, in theory, in practice or in both. I have never been successful in my attempts to argue that upon closer inspection (better analysis) the postulated paradoxes usually vanish.
In terms of management journals, one of the pomo strongholds is unfortunately one of our leading journals, the Academy of Management Review. I am pretty much behind in my reading of AMR. But this morning I opened the January 2006 issue, and performed my usual vain search for articles that cited my works. I quickly found Lado, Boyd, Wright and Kroll's "Paradox and Theorizing Within the Resource-based View."
The authors claim to use "paradox in the logical sense to address epistemological issues surrounding RBV logic, such as unfalsifiability, tautology, and infinite regress" (p.117). They argue that they embed their understanding in a non-traditional view of science (in contrast to those — such as Foss (1996; "Knowledge-based Approaches to the Theory of the Firm," Org Science) — who allegedly holds "… that the presence of paradox within a theory undermines its scientific utility" (Foss 1996 says no such thing)).
Their non-traditional view, however, turns out to be Imre Lakatos' methodology of scientific research programmes, a now largely defunct methodology that was very popular with economic methodologists in the 1980s and the beginning of the 1990s.
So, what are the asserted paradoxes and "logical conundrums" in the RBV (which "reflect the paradoxes of RBV epistemology" and which has "worried" Foss (1996) (no, there was no such worry in this paper))?
One concerns causal ambiguity. The alleged paradox is that in theory causal ambiguity may help sustain competitive advantage, but in practice it may hinder leveraging the sources of competitive advantage. A paradox? Not at all. There is nothing paradoxical about saying that there are simply certain sources of sustainability that are difficult to manage.
Here is another alleged paradox, according to Lado et al. The RBV, it is argued, argues that there are no rules for riches; yet, it is asserted by RBV theorists that the RBV can be used to gain competitive advantage. A paradox? Not at all, provided one understands a little about asymmetric information and its implications.
I shall not bore the reader by more examples. The above should suffice to indicate that when writers (at least in management) talk about "paradox," one's first reaction should be that they are really just talking about insufficiently deep or sophisticated analysis, but trying to be hip by using fashionable pomo lingo. Lado et al. argue that "paradox" prompts scientific development. However, there is really nothing strange in this, as the alleged "paradoxes" are recognized by scholars to simply represent unfinished analysis.