There is some irony to be found in the observation
that the very qualities of resources and capabilities
that confer competitive advantage-inimitability and
organization-may be the very ones that instill organizations
with inertia and consequently limit their adaptability.
Commitmento an expensive, dedicated production
facility (Ghemawhat 1991) or a specific technology
regime (Christensen 1997) can lock a firm into a competitive
position from which it may be very difficult to
deviate. The nature of isolating mechanisms may imbue
a firm with core rigidities that subsequently constrain the
options and paths available to it (Leonard-Barton 1992).
Resource and capability development can confer survival
advantage when firms are young, and yet expose the
same firms to threats of obsolescence in when they are
more mature. The commonly observed pattern of exit
rates as a function of firm age is presented in Figure 1.
The high mortality rate among young firms, and the
lower exit rates among older firms, is consistent with a
model of resource deficiencies early in life and rigidity
later. This interpretation extends both the resource-based
view and the population ecology perspective on firmfailure
dynamic