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The following "Perspective" article by Wiggins and Ruefli poses a deceptively simple question relevant to the strategy, economics, and macroapproach to organizations literature: Is there evidence that firms actually obtain persistently superior economic performance as a consequence of attaining sustained competitive advantage? While many have investigated the impact of sustained competitive advantage on economic performance, most studies have examined only limited time frames, and few have addressed the temporal dynamics of sustained economic performance over long periods of time. The authors ask whether superior economic performance actually persists over time. If so, is this a rare event, or is it readily observed across a large number of firms and industries? This paper departs from the typical Perspective article because the authors have assembled substantial data to investigate their question: a sample of 6771 public firms in 40 industries over 25 years. The authors find that only a very small percentage of firms exhibits superior economic performance, and the phenomenon rarely persists for long time frames. Why should these findings capture our attention? Reviewers of this paper have noted that it addresses an important problem in economic and strategic literature, using unusual and appropriate analyses, which bear on a number of theoretical perspectives. Because achieving the outcomes associated with sustained competitive advantage are found to be limited to only a handful of firms, and for most firms this is limited to relatively short periods of time, the reviewers believe that it may be time to reexamine several theories of the firm. The reviewers recommend this paper to you and suggest that we reflect on our favorite theories or worldviews of competitive advantage in strategic management-i.e., industrial organization economics, the resource-based view of the firm, neoclassical economics, the Austrian school of economics, the hyper-competitive model, and the edge of chaos approach-in light of these findings.

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A growing number of articles in the area of strategic management employ a mean-variance approach to risk-return relationships. Some researchers investigating risk-return relationships in this fashion claim to have found negative associations between the levels of return and risk. The analysis reported here demonstrates that the mean-variance approach to return and risk carries with it the consequence that statements about the relationship are inherently unverifiable in the context of the system being examined. This further implies that results obtained by using mean and variance of return are specific to the data and period examined and are not necessarily generalizable. Additionally, since mean and variance are arithmetically linked, augmenting the system with additional equations will not provide the information necessary to establish the validity or generalizability of statements involving the mean-variance relation. The analytic proofs are supplemented by examples drawn from an empirical study of the U.S. airline industry.risk, risk/return relation, strategy