Mobius’ edge: Infinite regress in the resource-based and dynamic capabilities views

Abstract

The study of strategic organization involves many delicious ironies, one of which is the goal to prescribe general paths to sustainable competitive advantage. Twenty years after Collis and a few good men and women originally exposed and confronted the infinite regress problem in the resource-/capabilities-based theories, we revisit this problem to resolve it. We consider the linkages between the infinite hierarchical levels that form the paths to the origins of sustainable competitive advantages in both the resource-based view and the dynamic capabilities view. We find that there are logical factors that limit the number of levels that need to be traversed to reach the origins. We discuss the implications to academics, managers and policy-makers from our resolution to the infinite regress problem to provide a more crystal clear understanding of the strenuous objective that continues to challenge all strategic theory.