Sustained Competitive Advantage and the Modern Labour Theory of Value

S. Toms

Sustained Competitive Advantage and the Modern Labour Theory of Value

Management

Research output: Working paper

Abstract

The paper argues that the principal components of the Resource- Based View (R-BV) as a theory of sustained competitive advantage (SCA) are not a sufficient basis for a complete and consistent theory of firm behaviour. Two important missing elements are governance arrangements and value theory. Specifically the paper proposes a link between governance and value theory through a ‘modern labour theory of value’ (MLTV). The link operates first from the labour process, where value is created but is imperfectly observable by firm governance mechanisms and imposes monitoring costs. Second it operates through contractual arrangements which impose fixed cost structures on activities with variable revenues. The paper thereby explains how value originates in risky and difficult to monitor productive processes and is transmitted as rents to organizational and capital market constituents. It then reviews other recent contributions to the R-BV arguing that the SCA-MLTV approach overcomes some of the gaps inherent in the alternatives, and thus offers a more complete and integrated view of firm behaviour.

Original language	English
Place of Publication	York Management School
Publisher	University of York
Number of pages	46
Publication status	Published - 2006

Keywords

Resource-based view
labour process theory
theory of value
governance
competitive advantage

Access to Document

wp20toms.pdf

Cite this

@techreport{704a6accc20c4d11a450b3987f8fd694,

title = "Sustained Competitive Advantage and the Modern Labour Theory of Value",

abstract = "The paper argues that the principal components of the Resource- Based View (R-BV) as a theory of sustained competitive advantage (SCA) are not a sufficient basis for a complete and consistent theory of firm behaviour. Two important missing elements are governance arrangements and value theory. Specifically the paper proposes a link between governance and value theory through a {\textquoteleft}modern labour theory of value{\textquoteright} (MLTV). The link operates first from the labour process, where value is created but is imperfectly observable by firm governance mechanisms and imposes monitoring costs. Second it operates through contractual arrangements which impose fixed cost structures on activities with variable revenues. The paper thereby explains how value originates in risky and difficult to monitor productive processes and is transmitted as rents to organizational and capital market constituents. It then reviews other recent contributions to the R-BV arguing that the SCA-MLTV approach overcomes some of the gaps inherent in the alternatives, and thus offers a more complete and integrated view of firm behaviour.",

keywords = "Resource-based view, labour process theory, theory of value, governance, competitive advantage",

author = "S. Toms",

year = "2006",

language = "English",

publisher = "University of York",

address = "United Kingdom",

type = "WorkingPaper",

institution = "University of York",

}

TY - UNPB

T1 - Sustained Competitive Advantage and the Modern Labour Theory of Value

AU - Toms, S.

PY - 2006

Y1 - 2006

N2 - The paper argues that the principal components of the Resource- Based View (R-BV) as a theory of sustained competitive advantage (SCA) are not a sufficient basis for a complete and consistent theory of firm behaviour. Two important missing elements are governance arrangements and value theory. Specifically the paper proposes a link between governance and value theory through a ‘modern labour theory of value’ (MLTV). The link operates first from the labour process, where value is created but is imperfectly observable by firm governance mechanisms and imposes monitoring costs. Second it operates through contractual arrangements which impose fixed cost structures on activities with variable revenues. The paper thereby explains how value originates in risky and difficult to monitor productive processes and is transmitted as rents to organizational and capital market constituents. It then reviews other recent contributions to the R-BV arguing that the SCA-MLTV approach overcomes some of the gaps inherent in the alternatives, and thus offers a more complete and integrated view of firm behaviour.

AB - The paper argues that the principal components of the Resource- Based View (R-BV) as a theory of sustained competitive advantage (SCA) are not a sufficient basis for a complete and consistent theory of firm behaviour. Two important missing elements are governance arrangements and value theory. Specifically the paper proposes a link between governance and value theory through a ‘modern labour theory of value’ (MLTV). The link operates first from the labour process, where value is created but is imperfectly observable by firm governance mechanisms and imposes monitoring costs. Second it operates through contractual arrangements which impose fixed cost structures on activities with variable revenues. The paper thereby explains how value originates in risky and difficult to monitor productive processes and is transmitted as rents to organizational and capital market constituents. It then reviews other recent contributions to the R-BV arguing that the SCA-MLTV approach overcomes some of the gaps inherent in the alternatives, and thus offers a more complete and integrated view of firm behaviour.

KW - Resource-based view

KW - labour process theory

KW - theory of value

KW - governance

KW - competitive advantage

M3 - Working paper

BT - Sustained Competitive Advantage and the Modern Labour Theory of Value

PB - University of York

CY - York Management School

ER -