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Article
Causal Ambiguity as a Source of Sustained Capability-Based Advantages
Management Science (2009)
  • Michael D Ryall, University of Toronto
Abstract

This paper presents the first formal examination of role of causal ambiguity as a barrier to imitation. Here, the aspiring imitator faces a knowledge (i.e., icapabilities-based) barrier to imitation that is both causal and ambiguous in a precise sense of both words. Imitation conforms to a well-explicated process of learning-by-observing. I provide a precise distinction between the intrinsic causal ambiguity associated with a particular strategy and the subjective ambiguity perceived by a challenger. I find that intrinsic ambiguity is a necessary but insufficient condition for a sustained capability-based advantage. I also demonstrate that combinatorial complexity, a phenomenon that has attracted the recent attention of strategy theorists, and causal ambiguity are distinct barriers to imitation. The former acts as a barrier to explorative/active learning and the latter as one to absorptive/passive learning. One implication of this is that learning-by-doing and learning-by-observing are complementary strategic activities, not substitutes --̃ in most cases, we should expect firm strategies to seek performance enhancement using efforts of both types.

Keywords
  • Causal ambiguity,
  • competitive advantage,
  • bayesian networks
Disciplines
Publication Date
March, 2009
Citation Information
Michael D Ryall. "Causal Ambiguity as a Source of Sustained Capability-Based Advantages" Management Science Vol. 55 Iss. 3 (2009)
Available at: http://works.bepress.com/michael_ryall/10/