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Here I examine each of the major issues raised by Priem and Butler (this issue) about my 1991 article and subsequent resource-based research. While it turns out that Priem and Butler's direct criticisms of the 1991 article are unfounded, they do remind resource-based researchers of some important requirements of this kind of research. I also discuss some important issues not raised by Priem and Butler-the resolutions of which will be necessary if a more complete resource-based theory of strategic advantage is to be developed.
Priem and Butler's (this issue) critique of my 1991 Journal of Management article raises several important issues, about both the article and subsequent developments in the resource-based view (RBV) of the firm. While I disagree with most of these authors' criticisms, they clearly provide a service by creating a forum within which the creation, development, and future of resource-based models of competition can be discussed and debated.
Priem and Butler's criticisms fall into four broad categories: (1) that the resource-based theory I develop in the 1991 paper is tautological, (2) that my argument fails to acknowledge that many different resource configurations could generate the same value for firms and, thus, would not be sources of competitive advantage, (3) that the role of product markets is underdeveloped in the argument, and (4) that the theory developed in the article has limited prescriptive implications. I discuss each of these criticisms in turn. At the end of this response, I also discuss several important issues in the field of strategic management that are addressed neither in the 1991 paper nor in subsequent resource-based work. These issues, I think, constitute part of the research agenda that resource-based and other theorists must address if the field of strategic management is to continue to progress.
THE TAUTOLOGY CRITIQUE
Priem and Butler's first and, in many ways, most important critique of the 1991 article is that the RBV presented is tautological-that its primary assertions are true by definition and, thus, not subject to empirical test (Williamson, 1999). Following Bacharach (1989), the authors attempt to demonstrate the tautological nature of the 1991 argument by substituting the definitions of value, rarity, and strategic advantage given there into what they characterize as one of the central empirical assertions of the...