Exploring the roots of Porter's activity-based view

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Abstract:

Purpose ‐ Porter's activity-based view of the firm is a comprehensive strategic framework which analyzes firm-level competitive advantage. Although Porter's activity-based view is widely cited by academics, taught to students, and applied by practitioners, little is known about its intellectual roots. Given that a framework's intellectual antecedents not only determine its current content, but also its future development, this paper aims to examine the intellectual roots of Porter's activity-based view and the value chain. Design/methodology/approach ‐ The paper examines Porter's writings in an effort to document his influences while developing the activity-based view and value chain. Porter's and other scholars' explanations are found to be lacking, so the paper ventures further down paths first suggested by Porter and others. Findings ‐ Whereas Porter's five forces framework built on the existing industrial organization paradigm, the activity-based view is not derived from any existing paradigms. While consultants of the 1970s impacted Porter's development of the value chain and the activity-based view, its deeper roots lay in operations research, particularly activity analysis; and the work of Arch Shaw, who was the first to teach a business policy course at Harvard Business School. Porter's contribution is to bring the diverse threads together into a coherent whole which managers can apply to analyze and improve their competitive positions. Practical implications ‐ Following Porter, the authors argue that activities are a key link between resource holdings and strategic positions. Therefore, it is only when the activity-based and resource-based views are integrated that they provide a comprehensive explanation of firm value creation. Originality/value ‐ The paper is the first to critically examine the intellectual antecedents of the activity-based view.

Keywords: Activity based management; Strategic management; Value chain

Document Type: Research Article

DOI: http://dx.doi.org/10.1108/17554250910982480

Publication date: August 7, 2009

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