Relational View

Four Prerequisites of Competitive Advantage

Abstract

Dyer and Singh (1998) use the dyad or network, rather than the single firm, as their unit of analysis, and suggest a relational view (RV), which considers interfirm competitive advantage. However, when discussing competitive advantage from the perspective of RV, one must be aware that the special case of Toyota and its suppliers is the assumption. Even in comparison with other Japanese automakers, Toyota and its suppliers have certain characteristics, such as: a) they are geographically close to each other; b) they have substantive special assets; and c) they proactively share knowledge via human interaction, and have a systematic inter-organizational learning system to support this knowledge sharing. Thus, firms trying to acquire competitive advantage of RV need to meet the above prerequisites. Further, RV discussions advocating an increase in special assets for long-term transactional advantage rely on d) product features. If one assumes a less-complex product such as a personal computer, with frequently changing transaction partners where short-term transactions are insignificant, the effectiveness of RV cannot be guaranteed. Given these considerations, this paper summarizes the characteristics a) through d) as prerequisites that generate competitive advantage, from the perspective of RV.