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Competitive advantage: what’s luck got to do with it?

Hao Ma (Department of Management, Bryant College, Smithfield, Rhode Island, USA)

Management Decision

ISSN: 0025-1747

Article publication date: 1 August 2002

9315

Abstract

Luck remains an elusive theoretical concept in the business literature yet a fascinating practical phenomenon in business reality. In addition to effective strategic maneuvering and well‐run internal management, luck often plays a non‐trivial role as a determinant of competitive advantage and firm performance. Understanding the various types of luck and the contextual conditions under which luck strikes is therefore expected to help a firm gain competitive advantage. This paper advances a typology of different scenarios of luck – pure luck, prepared luck, useful weeds, and skunk work – and expounds the strategic implications of these scenarios for the firm’s search for competitive advantage. Taking a proactive approach, it untangles the typical environmental sources of luck as well as the intra‐firm mechanisms and processes through which a firm could better induce, recognize, and exploit lucky incidents of innovations from useful weeds or skunk works.

Keywords

Citation

Ma, H. (2002), "Competitive advantage: what’s luck got to do with it?", Management Decision, Vol. 40 No. 6, pp. 525-536. https://doi.org/10.1108/00251740210433927

Publisher

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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