Causation, counterfactuals and competitive advantage

R. DURAND, E. Vaara

Strategic Management Journal

décembre 2009, vol. 30, n°12, pp.1245-1264

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : causation, counterfactuals, competitive advantage, epistemology

Causation needs more attention in strategy research. Confusion prevails around the statistical or causal nature of core relationships between resources, competitive advantage, and performance in the strategy corpus. Based on a discussion of alternative epistemological perspectives on causation, we define epistemological conditions that help to both dispel some of this confusion and to provide a basis for a counterfactual approach to causation. In particular, we argue that a counterfactual approach ' that builds on a systematic analysis of 'what-if' questions ' can advance our understanding of key causal mechanisms in strategy research. We offer two concrete methodologies ' counterfactual history and causal modeling ' as methodological solutions for causal strategy research. We show that counterfactual methods can open up new avenues for historical analysis, which has been very limited in our field, but maintain that such studies should take into account the inherent cognitive biases of retrospective constructions. We also illustrate that causal modeling provides opportunities for new conceptualizations and empirical testing of the relationships between resources and performance. In particular, resource properties can be regarded as mediating mechanisms in these causal relationships.