In answering the essential question of strategic management (why do some firms consistently outperform others?) we know that we need to understand both industry and firm effects.
Industry Effects: What is the theory that helps us to understand industry effects and according to this theory, what is the essential source of competitive advantage? Explain the analytical framework used to assess the source of industry effects.
Firm Effects: What is the theory that helps us to understand firm effects and according to this theory, what is the essential source of competitive advantage? Explain the analytical framework(s) used to assess the source of firm effects.
How do these two theories relate to each other?