Strategy Practices and the Micro-Foundations of Advantage

Resource-based advantages are ‘built’, not bought, and have typically emerged from complex development processes that are, to a significant degree, ‘unmanaged’. Set against this reality are strategy process prescriptions that encourage managers to adopt deliberate, formal, analytical approaches to deriving strategies. Thus, our understanding of what gives a firm unique advantage seems to be at odds with generic strategy practice prescriptions. To address this paradox, we examine the micro-foundations of advantage, showing that it is processual in nature and that it resists disaggregation that would make it amenable to design-led managerial interventions. We then suggest strategy practices that may be more congruent with the fundamental nature of resource-based advantages. Such practices should enable the firm to continually adapt to the unfolding environment.