Untangling the origins of competitive advantage

This paper begins to reconcile competing perspectives on the origins of com petitive advantage by examining the adoption of 'science-driven' drug disco very, a performance-enhancing organizational practice. Science-driven drug discovery diffused slowly, allowing us to disentangle alternative theories of organizational heterogeneity. Adoption is driven by initial conditions, time-varying internal and external environmental conditions, and convergenc e (firms positioned least favorably adopt most aggressively). While account ing for initial conditions is critical, managers are sensitive to idiosyncr atic environmental cues. The origins of competitive advantage may therefore lie in the ability to identify and respond to environmental cues well in a dvance of observing performance-oriented pay-offs. Copyright (C) 2000 John Wiley & Sons, Ltd.