Explaining corporate success: Britain’s best performing firms, 1949-1985 D.M. Higgins, S. Toms The York Management School Abstract The paper synthesises theories of competitive advantage in a dynamic framework to explain the determinants of corporate success. A model is presented linking the firm’s resource audit and dynamic capabilities with the rate of market growth. For the purposes of testing the model, an examination of the performance of all British quoted companies during the period is conducted with reference to achieved long run average rates of return on capital employed. The best performing firms are analysed in more detail and their strategies mapped according to the model criteria. Conclusions are then drawn on the possible strategies for achieving long run corporate success in terms of above average financial returns. Correspondence Steven Toms Joint Editor: Business History Professor of Accounting and Finance and Head of School The York Management School Sally Baldwin Buildings University of York York YO10 5DD Tel: (44) 1904-434122 Fax: (44) 1904-433 431 Email:
[email protected] http://www.york.ac.uk/management/staff/StaffProfiles/SToms.htm 1 Explaining corporate success: Britain’s best performing firms, 1949-1985 1. Introduction Competitive advantage and more specifically sustained competitive advantage and its determinants, has become an important research topic in the business and management and industrial organisation literatures. Sustained competitive advantage (SCA) implies not just achieving superior returns, but achieving them over a protracted period of time. It is therefore surprising that the overwhelming majority of this literature has not explored the notion of sustained competitive advantage from a historical perspective.