654 J. A. Roquebert, R L. Phillips and P. A. Westfall thought to be alike in all strategically important ation-specific'( Porter, 1991: 97). It was respects except for scale, and therefore, the focus implicitly assumed that managers'perceptions or unit of analysis was the industry(Weiss, 1971; and choices largely accounted for the variance in Rumelt, Schendel, and Teece, 1994). The early companies' performance. The emphasis on taking industrial organization economic work was also a general manager's perspective led to a largely concerned with capturing complexity: conse- process-oriented, as opposed to a content-oriented quently, explanations were based upon detailed stream of research( Porter, 1981) and extensive industry studies( Porter, 1991) Investigation of the evolution of organizational It should be pointed out that Mason was not theory models suggests a somewhat in-between the only theorist commenting on the subject. Even view of the world. As in industrial organization at the time, there were theorists arguing what we economics, performance models in organizational might now suggest belongs to the genre of the theory have been largely deterministic(White and resource-based theory of the firm. Nourse and Hammermesh, 1981). However, until recently the Drury(1938)suggested that influences specific theory and measures of environmental(industry) to the firm determined performance; i.e., manage- influence have been distinct from those employed ment basically determined firm advantages and in industrial organization economics. Further, and firms were not simply at the mercy of industry more importantly, the 'determinism' was not only factors. Over 50 years have passed since Mason's from the influence of the external environment ( 1939)proposition with apparently little dampen- but also from the organization structure itself. In ing of the industry elan. Montgomery and Porter essence, the organizing principle was that the (1991: xiv-xv)affirm the importance of indus- structure of the organization and its fit to the environment determine the relative degree of role industry conditions play in the performance h here were major shifts during the decades of Present research continues to affirm the importan of individual firms Seeking to explain perform 1970s and 1980s in the strategic management ance differences across firms recent studies have and industrial organization economics fields, with repeatedly shown that average industry profitabil- respect to the unit of analysis, the reevaluation ity is, by far, the most significant predictor of of assumptions, and the relative focus across firm performance. It is far more important than fields. The reasons for shifting theoretical orien- it is now uncontestable that industry analysi tations appear to have been the inability should play a vital role in strategy formation classical economics to explain intraindustry ( Note: Montgomery and Porter, 1991, used a inductive nature of case studies, and perhaps a single article to support the above quotation- healthy'cross-fertilization between fields Schmalensee, 1985, which will be discussed in Masons deterministic approach implied that detail later ) comparisons across industries would be valid In contrast to the basic theoretical orientation while Nourse's hypothesis supported the notion of IOE, the strategy field seems to have germi- of intraindustry heterogeneity(Bass, Cattin, and nated in the early 1960s out of the case study Wittink, 1977: 194 ) Further, the feedback loops tradition at Harvard(Teece, 1990). Learned of cause-effect-cause relationships regarding al.(1969)and Andrews(1971)constituted for environment, conduct, and performance would the most part the organizing framework that render purely deterministic theories unreconcil Ba 1991). In the classic strategy model, a firms competi- Recently, a 'new'stream of research has tive advantage was gained from a combination of reemerged by the name of resource-based the- external and internal factors, known as oppor- ories, which propose that firm idiosyncrasies in tunities and strengths applied against threats and the accumulation of unique and inimitable weaknesses. The early literature was developed resources create sustained competitive advantage around broad principles, reflecting an orientation (Barney, 1991; Collis, 1991; Conner, 1991; Lipp- toward prescriptions for practitioners and the 'rec- man and rumelt, 1982; Rumelt, 1984). It should ognition, indeed the preoccupation, with the fact be kept in mind that the seeds of this notion that competition was complex and highly situ- were present at the birth of the field (e. g, Nourse