The Psychology of Competitive Advantage: An Adjacent Possibility

Abstract

This article argues that the field of industrial–organizational (I–O) psychology should expand its focus from studying individual and small-group behavior to also studying how psychology contributes to organizational strategy and sustained competitive advantage. The field of strategy has recently sought to understand the microfoundations of competitive advantage, and I–O psychology brings much expertise to inform the study of such microfoundations. However, most I–O research pays little attention to strategic issues. In this article, I provide an introduction to strategic management, focusing primarily on the resource-based determinants of competitive advantage. I then discuss the potential benefits of I–O science and practice tackling important strategic issues yet also note the challenges and likely evolutions that will be necessary in our theory and research. The field of personnel selection is used as an illustration, but other areas of I–O are also considered.