Candidate cases How to design and conduct a theory-building case study

If no concept is known at the beginning of the study as depicted in Figures 8.4 and 8.5, cases cannot be selected on the basis of the varia- tion of these concepts and must, therefore, be selected more or less randomly. Box 12 Michael Porter’s case selection Michael Porter’s theory on The competitive advantage of nations 1990 is based on case study research. Porter and his team wanted to find conditions for a nation’s industries that could explain the success of a nation’s global competitiveness. The theory focused on the strategies of firms rather than the strategies of nations, as “firms, not nations, compete in international markets”. The team selected, from ten important trading nations, the companies that were internationally successful the dependent concept. Then they identified the determinants that could explain the nation’s success the independent concepts. Porter and his team found four determinants four points of a “diamond” of a nation’s success: 1 the nation’s position in factors of production such as skilled labour or infra- structure; 2 demand conditions, the home-market demand for the industry’s product or services; 3 related and supporting industries, the presence or absence in the nation of supplier industries and other related industries that are internationally competitive; and 4 firm strategy, structure, and rivalry, the conditions in the nation governing how companies are created, organized, and managed, as well as the nature of the domestic rivalry. These four determinants are necessary for achieving and sustaining competitive success, or as Porter 1990 : 73 puts it: “Advantages throughout the ‘diamond’ are necessary for achieving and sustaining competitive success in the knowledge-intensive industries that form the backbone of advanced economies”. Porter’s case selection procedures are problematic for two main reasons. One is that, by not including non-successful companies or nations in his study, Porter is not able to distinguish between necessary and sufficient conditions on the one hand, or between necessary and trivial conditions on the other hand. If, for instance, the factors found could exist in any company or sector in an industrialized country, including non-successful ones, this would make the discovered determinants not less “necessary” but it would make them trivial for policy. Apparently, Porter implicitly relies on his readers’ knowledge about conditions in non-successful companies and nations. The second reason is that this form of case selection prohibits finding probabilistic relations. If Porter had found only one single instance without the “necessary” determinants, he would not only have failed to identify the necessary condition but would also not have been able to find another type of relation between determinants and success. Porter’s case selection procedures, thus, were appropriate only for finding candidate necessary conditions and he was lucky to find them.