Most pre-1990 literature on businesses' use of information technology (IT)-defined as any form of computer based information system-focused on spectacular IT successes and reflected a general optimism concerning IT's potential as a resource for creating competitive advantage. But toward the end of the 1980's, some economists spoke of a"productivity paradox"; despite huge IT investments, most notably in the service sectors, productivity stagnated. In the retail industry, for example, in which IT had been widely adopted during the 1980's, productivity (average output per hour) rose at an average annual rate of 1.1 percent between 1973 and 1989, compared with 2.4 percent in the preceding 25-year period. Proponents of IT argued that it takes both time and a critical mass of investment for IT to yield benefits, and some suggested that growth figures for the 1990's proved these benefits were finally being realized. They also argued that measures of productivity ignore what would have happened without investments in IT productivity gains might have been even lower. There were even claims that IT had improved the performance of the service sector significantly, although macroeconomic measures of productivity did not reflect the improvement.

    But some observers questioned why, if IT had conferred economic value, it did not produce direct competitive advantages for individual firms. Resource-based theory offers an answer, asserting that, in general, firms gain competitive advantages by accumulating resources that are economically valuable, relatively scarce, and not easily replicated. According to a recent study of retail firms, which confirmed that IT has become pervasive and relatively easy to acquire, IT by itself appeared to have conferred little advantage. In fact, though little evidence of any direct effect was found, the frequent negative correlations between IT and performance suggested that IT had probably weakened some firms' competitive positions. However, firms' human resources, in and of themselves, did explain improved performance, and some firms gained IT-related advantages by merging IT with complementary resources, particularly human resources. The findings support the notion, founded in resource-based theory, that competitive advantages do not arise from easily replicated resources, no matter how impressive or economically valuable they may be, but from complex, intangible resources.

    Among the myths taken as fact by the environmental managers of most corporations is the belief that environmental regulations affect all competitors in a given industry uniformly. In reality, regulatory costs—and therefore compliance—fall unevenly, economically disadvantaging some companies and benefiting others. For example, a plant situated near a number of larger noncompliant competi tors is less likely to attract the attention of local regulators than is an isolated plant, and less attention means lower costs. Additionally, large plants can spread compliance costs such as waste treatment across a larger revenue base; on the other hand, some smaller plants may not even be subject to certain provisions such as permit or reporting requirements by virtue of their size. Finally, older production technologies often continue to generate toxic wastes that were not regulated when the technology was first adopted. New regulations have imposed extensive compliance costs on companies still using older industrial coal-fired burners that generate high sulfur dioxide and nitrogen oxide outputs, for example, whereas new facilities generally avoid processes that would create such waste products. By realizing that they have discretion and that not all industries are affected equally by environmental regulation, environmental managers can help their companies to achieve a competitive edge by anticipating regulatory pressure and exploring all possibilities for addressing how changing regulations will affect their companies specifically.