Strategies do not affect firm performance directly, but affect performance through the development of firm-specific resources and capabilities that can lead to both competitive advantage and high performance.

Question

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Strategies guide firms in building and utilizing resources and capabilities that can enable them to achieve a competitive advantage and high performance. These resources and capabilities are developed over time through the implementation of strategic initiatives and are a key determinant of a firm's ability to create value and achieve sustainable competitive advantage. Therefore, while strategies do not directly impact firm performance, they play a critical role in shaping the firm's resource and capability profile that drives performance outcomes.

Strategies Do Not Affect Firm Performance Directly, but Affect Performance