ssrn-id975767 - The Asset-Attitude Approach for Competitive...

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Electronic copy of this paper is available at: http://ssrn.com/abstract=975767 1 The Asset-Attitude Approach for Competitive Advantage and Value-Added Models Herbert Kimura 1 Leonardo Fernando Cruz Basso Eduardo Kazuo Kayo Working Paper 2006 1 E-mail: herbert.kimura@gmail.com
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Electronic copy of this paper is available at: http://ssrn.com/abstract=975767 2 The Asset-Attitude Approach for Competitive Advantage and Value-Added Models Abstract In the spirit of discussion of theoretical alternatives, we present the Asset-Attitude Approach that aims to bring new concepts to the study of competitive advantage. Although assets, as related to resources and capabilities, do not represent a new concept, the AAA introduces the importance of the individual's behavior in the firm performance. In this sense, a possible investigation could be explored to build a bridge between strategy and finance, since behavioral finance is challenging paradigms of the modern theory of finance. Particularly, two innovations can be emphasized in the Asset-Attitude Approach: (i) the analysis of the origin of assets from the transformation of other, more elemental, assets, through a chemical analogy, in which new substances originate from transformations or reactions of other substances and (ii) the suggestion of existence of an equivalence relationship between assets and attitudes, similar to the existence of a conversion equation between mass and energy, as proposed in Physics. Although the approach raises more questions than answers, one important aspect is the discussion of the relevance of opportunity costs in a context of heterogeneous assets and attitudes. Since the opportunity costs serve as basis for economic rents in strategy and for abnormal returns in finance, the challenge of the relevance of this concept can have great impact in both theories. Keywords: Competitive advantage, Asset-Attitude Approach, Opportunity costs
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3 The Asset-Attitude Approach for Competitive Advantage and Value-Added Models 1. Introduction The field of management strategy has been presenting intense discussion on the sources of creation of competitive advantage, fomented mainly by the confrontation of two approaches: (i) the approach of the competitive forces (Porter, 1980), based on the paradigm of the theory of the industrial organization (Mason, 1949; Bain, 1959) that advocates the critical dependence of the performance of a company to the environmental characteristics of the industry in which it competes (Porter, 1981) and (ii) the resource-based view (Penrose, 1959; Wernerfelt, 1984; Barney, 1991) that emphasizes the relevance of the idiosyncratic characteristics of the companies in the obtaining of above normal rates of return (Oliver, 1997). However, due to the need of more accurate formulations and more solid theories, there is
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This note was uploaded on 10/24/2011 for the course SCIENCE PHY 453 taught by Professor Barnard during the Winter '11 term at BYU.

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ssrn-id975767 - The Asset-Attitude Approach for Competitive...

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