Abstract for: System Dynamics, RBV and Behavioural Theories of Firm Performance: Lessons from People Express

In recent years several scholars and practitioners have proposed that a combination of system dynamics and the resource-based view of the firm (RBV) can help to explain anomalies in firms’ competitive performance over time. For example why do some firms, despite initial success, subsequently falter and even fail spectacularly. This article provides a practical example based on the well-known rise and fall of People Express in the highly competitive US airline industry of the mid-1980s. The contribution of RBV and system dynamics to understanding the changing fortunes of the firm is discussed and also critiqued.