Showing papers on "Competitive advantage published in 1999"

What's your strategy for managing knowledge?

Abstract: The rise of the computer and the increasing importance of intellectual assets have compelled executives to examine the knowledge underlying their businesses and how it is used. Because knowledge management as a conscious practice is so young, however, executives have lacked models to use as guides. To help fill that gap, the authors recently studied knowledge management practices at management consulting firms, health care providers, and computer manufacturers. They found two very different knowledge management strategies in place. In companies that sell relatively standardized products that fill common needs, knowledge is carefully codified and stored in databases, where it can be accessed and used--over and over again--by anyone in the organization. The authors call this the codification strategy. In companies that provide highly customized solutions to unique problems, knowledge is shared mainly through person-to-person contacts; the chief purpose of computers is to help people communicate. They call this the personalization strategy. A company's choice of knowledge management strategy is not arbitrary--it must be driven by the company's competitive strategy. Emphasizing the wrong approach or trying to pursue both can quickly undermine a business. The authors warn that knowledge management should not be isolated in a functional department like HR or IT. They emphasize that the benefits are greatest--to both the company and its customers--when a CEO and other general managers actively choose one of the approaches as a primary strategy.

The Human Resource Architecture: Toward a Theory of Human Capital Allocation and Development

Abstract: Recognizing, that not all employees possess knowledge and skills that are of equal strategic importance, we draw on the resource-based view of the firm, human capital theory, and transaction cost economics to develop a human resource architecture of four different employment modes: internal development, acquisition, contracting, and alliance. We use this architecture to derive research questions for studying the relationships among employment modes, employment relationships, human resource configurations, and criteria for competitive advantage.

Linking Entrepreneurship and Economic Growth

Abstract: In the 1980s stagflation and high unemployment caused a renewed interest in supply side economics and in factors determining economic growth. Simultaneously, the 1980s and 1990s have seen a reevaluation of the role of small firms and a renewed attention for entrepreneurship. The goal of this survey is to synthesize disparate strands of literature to link entrepreneurship to economic growth. This will be done by investigating the relationship between entrepreneurship and economic growth using elements of various fields: historical views on entrepreneurship, macro-economic growth theory, industrial economics (Porter's competitive advantage of nations), evolutionary economics, history of economic growth (rise and fall of nations) and the management literature on large corporate organizations. Understanding the role of entrepreneurship in the process of economic growth requires the decomposition of the concept of entrepreneurship. A first part of our synthesis is to contribute to the understanding of the dimensions involved, while paying attention to the level of analysis (individual, firm and aggregate level). A second part is to gain insight in the causal links between these entrepreneurial dimensions and economic growth. A third part is to make suggestions for future empirical research into the relationship between (dimensions of) entrepreneurship and economic growth.

The Synergistic Effect of Market Orientation and Learning Orientation on Organizational Performance.

Abstract: Although a large body of research theoretically asserts a positive relationship between market orientation and organizational performance, fewer empirical studies demonstrate it using multiple and varied organizational performance measures. Additionally, a series of recent studies have theoretically proposed, but not empirically demonstrated, that a firm’s learning orientation is likely to indirectly affect organizational performance by improving the quality of its market-oriented behaviors and directly influence organizational performance by facilitating the type of generative learning that leads to innovations in products, procedures, and systems. This empirical study supports all of these specific contentions and the more global notion that higher order learning processes may be critical in creating a sustainable competitive advantage in the firm.

A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms

Abstract: The Resource-Based View (RBV) of competitive advantage provides a theoretical framework from the field of strategic management for assessing the competitive advantages of family firms. The RBV isolates idiosyncratic resources that are complex, intangible, and dynamic within a particular firm. The bundle of resources that are distinctive to a firm as a result of family involvement are identified as the “familiness” of the firm. This approach provides a research and practice method for assessing the specific behavioral and social phenomena within a firm that provide an advantage. Using a familiness model for assessing competitive advantage overcomes many of the problems associated with the generic claim that family companies have an advantage over nonfamily companies. It also provides a unified systems perspective of family firm performance.

Motivation, Knowledge Transfer, and Organizational Forms

Abstract: Employees are motivated intrinsically as well as extrinsically. Intrinsic motivation is crucial when tacit knowledge in and between teams must be transferred. Organizational forms enable different kinds of motivation and have different capacities to generate and transfer tacit knowledge. Since knowledge generation and transfer are essential for a firm's sustainable competitive advantage, we ask specifically what kinds of motivation are needed to generate and transfer tacit knowledge, as opposed to explicit knowledge.

Knowledge management systems: issues, challenges, and benefits

Abstract: The knowledge-based theory of the firm suggests that knowledge is the organizational asset that enables sustainable competitive advantage in hypercompetitive environments. The emphasis on knowledge in today’s organizations is based on the assumption that barriers to the transfer and replication of knowledge endow it with strategic importance. Many organizations are developing information systems designed specifically to facilitate the sharing and integration of knowledge. Such systems are referred to as Knowledge Management System (KMS). Because KMS are just beginning to appear in organizations, little research and field data exists to guide the development and implementation of such systems or to guide expectations of the potential benefits of such systems. This study provides an analysis of current practices and outcomes of KMS and the nature of KMS as they are evolving in fifty organizations. The findings suggest that interest in KMS across a variety of industries is very high, the technological foundations are varied, and the major

Corporate Entrepreneurship and the Pursuit of Competitive Advantage

Abstract: This paper presents a theoretical exploration of the construct of corporate entrepreneurship. Of the various dimensions of firm-level entrepreneurial orientation identified in the literature, it is...

Economics of Strategy

Abstract: Introduction. Strategy and Economics. Part One. Economic Foundations of Strategy. Chapter 1. Basic Microeconomic Principles. Chapter 2. Economies of Scale and Scope. Chapter 3. Agency and Coordination. Chapter 4. The Power of Principles - An Historical Perspective. Part Two. Firm Boundaries. Chapter 5. The Vertical Boundaries of the Firm. Chapter 6. Organizing Vertical Boundaries: Vertical Integration and Its Alternatives. Chapter 7. Diversification. Part Three. Market and Competitive Analysis. Chapter 8. Competitors and Competition. Chapter 9. Strategic Commitment. Chapter 10. The Dynamics of Pricing Rivalry. Chapter 11. Entry and Exit. Chapter 12. Industry Analysis. Part Four. Strategic Position and Dynamics. Chapter 13. Strategic Positioning for Competitive Advantage. Chapter 14. Sustaining Competitive Advantage. Chapter 15. The Origins of Competitive Advantage: Innovation, Evolution, and Environment. Part Five. Internal Organization. Chapter 16. Performance Measurement and Incentives in Firms. Chapter 17. Strategy and Structure. Chapter 18. Environment, Power, and Culture.

Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership

Abstract: Executive Overview Competition in the 21st century's global economy will be complex, challenging, and filled with competitive opportunities and threats. Effective strategic leadership practices can help firms enhance performance while competing in turbulent and unpredictable environments. The purpose of this paper is to describe six components of effective strategic leadership. When the activities called for by these components are completed successfully, the firm's strategic leadership practices can become a source of competitive advantage. In turn, use of this advantage can contribute significantly to achieving strategic competitiveness and earning above-average returns in the next century.

When Competitive Advantage Doesn't Lead to Performance: the Resource-Based View and Stakeholder Bargaining Power

Abstract: What if rent from a competitive advantage is appropriated so it cannot be observed in performance measures? The resourcebased view was not formulated to examine who will get the rent. Yet, this essay argues that the factors leading to a resource based advantage also predict who will appropriate rent. Knowledge-based assets are promising because firm-specificity, social complexity, and causal ambiguity make them hard to imit ate. However, the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors. This essay integrates the resource-based view with the bargaining power literature by defining the firm as a nexus of contracts. This new lens can help to explain when rent will be generated and, simultaneously, who will appropriate it. In doing so, it provides a more robust theory of firm performance than the resource-based view alone. It is also suggested that this lens might be useful for examining other theories of firm performance.

Putting people first for organizational success

Abstract: Executive Overview There's a disturbing disconnect in organizational management Research, experience, and common sense all increasingly point to a direct relationship between a company's financial success and its commitment to management practices that treat people as assets Yet trends in management practice are actually moving away from these very principles Why is common sense so remarkably uncommon when it comes to managing people? Why do organizations habitually overlook readily available opportunities to boost their financial performance? Drawing on extensive empirical research, an irrefutable business case can be made that the culture and capabilities of an organization—derived from the way it manages its people—are the real and enduring sources of competitive advantage Managers today must begin to take seriously the often heard, yet frequently ignored, adage that “people are our most important asset”

Blown to Bits: How the New Economics of Information Transforms Strategy

Abstract: From the Publisher: Richness or reach? The trade-off used to be simple but absolute: Your business strategy either could focus on "rich" information—customized products and services tailored to a niche audience—or could reach out to a larger market, but with watered-down information that sacrificed richness in favor of a broad, general appeal. Much of business strategy as we know it today rests on this fundamental trade-off. Now, say Evans and Wurster, the new economics of information is eliminating the trade-off between richness and reach, blowing apart the foundations of traditional business strategy. With the spread of connectivity and common standards, your customers will increasingly have rich access to a universe of alternatives, your suppliers will exploit direct access to your customers, and focused competitors will pick off the most profitable parts of your value chain. According to Blown to Bits, your business definition, industry definition, and competitive advantage are simultaneously up for grabs. With an uncompromising clarity and vivid examples, Blown to Bits is targeted squarely at today's practicing business and corporate leaders. This groundbreaking book shows how to build new strategies that reflect a world where richness and reach go hand in hand, and explains how to take advantage of the new forces shaping competitive advantage.

Collective Learning, Tacit Knowledge and Regional Innovative Capacity

Abstract: LAWSON C. and LORENZ E. (1999) Collective learning, tacit knowledge and regional innovative capacity, Reg. Studies 33 , 305‐317 . The paper reviews key ideas in the firm capabilities literature and shows how they can be usefully extended to develop a conception of collective learning among regionally clustered enterprises. The paper also explores the relationship between codifiable and tacit knowledge in the innovation process, and investigates the claim that tacit knowledge, because it is difficult to transfer in the absence of labour mobility, may constitute a basis for sustained regional competitive advantage. The closing section uses case study material based on Minneapolis and Cambridge to illustrate the importance for innovation of a regional capability for combining and integrating diverse knowledge, and of the sources of such capabilities as pre-conditions for successful high technology regions. LAWSON C. et LORENZ E. (1999) L'apprentissage collectif, la connaissance implicite et la capacite regio...

Constructing competitive advantage: The role of firm-constituent interactions

Abstract: Current models of competitive advantage emphasize economic factors as explanations for a firm’s success but ignore sociocognitive factors. This paper integrates economic and cognitive perspectives, and shows how firms and constituents jointly construct the environments in which firms compete. We argue that competitive advantage is a systemic outcome that develops as firms and constituents participate in six processes that entail, not only use and exchange of resources, but also communication about and interpretations of those exchanges. The interpretations that firms and constituents make of competitive interactions affect decisions about how to exchange and use resources. As interpretations and evaluations of a given firm fluctuate, so do the resources the firm has access to and its competitive advantage in the marketplace. The actions and interpretations of constituents and rivals produce the shifting terrain on which competition unfolds. We illustrate these dynamics with a discussion of IBM’s changing competitive advantage in the computer industry in the 1980s. Copyright © 1999 John Wiley & Sons, Ltd.

How a Firm's Capabilities Affect Boundary Decisions

Abstract: Determining which business activities to bring inside a firm and which to outsource is a critical strategic decision. Firms that bring in the wrong business activities risk losing strategic focus; those that fail to bring the right business activities within their boundaries risk losing their competitive advantage. A well-developed approach for determining a firm's boundary, called transactions cost economics, specifies the conditions for managing a particular economic exchange within an organizational boundary and the conditions for choosing outsourcing. A popular version of transactions cost economics requires managers to consider a single characteristic of an economic exchange ? its level of transaction-specific investment. Three concepts aid in understanding transactions cost economics as applied to firm boundary decisions: governance (the mechanism through which a firm manages an economic exchange), opportunism (taking unfair advantage of other parties to an exchange), and transaction-specific investment (any investment that is significantly more valuable in one particular exchange than in any alternative exchange). Firms can use governance mechanisms to mitigate the threat of opportunism. Traditional transactions cost economics does not focus on the capabilities of a firm or its potential partners, even though economic exchanges involve (1) cooperating with firms that possess critical capabilities, (2) developing capabilities independently, or (3) acquiring another firm that already possesses needed capabilities. The author describes the conditions under which a firm's decisions on managing its business activities should be affected by its capabilities and those of its partners. When these conditions hold ? conditions particularly common in rapidly evolving high-technology industries ? firms should make boundary decisions that differ significantly from what would be suggested by traditional transactions cost analysis.

Building Data Mining Applications for CRM

Abstract: From the Publisher: How data mining delivers a powerful competitive advantage! Are you fully harnessing the power of information to support management and marketing decisions? You will,with this one-stop guide to choosing the right tools and technologies for a state-of-the-art data management strategy built on a Customer Relationship Management (CRM) framework. Authors Alex Berson,Stephen Smith,and Kurt Thearling help you understand the principles of data warehousing and data mining systems,and carefully spell out techniques for applying them so that your business gets the biggest pay-off possible. Find out about Online Analytical Processing (OLAP) tools that quickly navigate within your collected data. Explore privacy and legal issues. . . evaluate current data mining application packages. . . and let real-world examples show you how data mining can impact — and improve — all of your key business processes. Start uncovering your best prospects and offering them the products they really want (not what you think they want)! How data mining delivers a powerful competitive advantage! Are you fully harnessing the power of information to support management and marketing decisions? You will,with this one-stop guide to choosing the right tools and technologies for a state-of-the-art data management strategy built on a Customer Relationship Management (CRM) framework. Authors Alex Berson,Stephen Smith,and Kurt Thearling help you understand the principles of data warehousing and data mining systems,and carefully spell out techniques for applying them so that your business gets the biggest pay-off possible. Find out about Online Analytical Processing (OLAP) tools thatquickly navigate within your collected data. Explore privacy and legal issues. . . evaluate current data mining application packages. . . and let real-world examples show you how data mining can impact — and improve — all of your key business processes. Start uncovering your best prospects and offering them the products they really want (not what you think they want)!

When is virtual virtuous?: organizing for innovation

Abstract: Champions of virtual corporations are urging managers to subcontract anything and everything All over the world, companies are jumping on the bandwagon, decentralizing, downsizing, and forging alliances to pursue innovation Why is the idea of the virtual organization so tantalizing? Because we have come to believe that bureaucracy is bad and flexibility is good And so it follows that a company that invests in as little as possible will be more responsive to a changing market-place and more likely to attain global competitive advantage

Cooperation and competition in relationships between competitors in business networks

Abstract: Traditionally the relationships between competitors in the industrial market have been based on competition. The network approach and literature about strategic alliances have provided new insights into cooperation between firms based on the value chain. The empirical findings from two in‐depth studies, the rack and pinion industry and the lining industry, show that a firm can be involved in four different types of horizontal relationships at the same time. Apart from relationships consisting of competition or cooperation, a firm can live in symbiosis by coexisting with other relationships, or being involved in a relationship simultaneously containing elements of both cooperation and competition. Consequently, a successful firm needs to focus on relationship management in order to achieve a portfolio consisting of the four types of relationships to other horizontal firms.

Rethinking research methods for the resource‐based perspective: isolating sources of sustainable competitive advantage

Abstract: An exploration of traditional perspectives and contemporary propositions regarding sustainable competitive advantage points to the conclusion that the locus of advantage is located specifically within organizational effects. The key issue emerges that research investigating sources of sustainable competitive advantage must be done not only on organizations but also in organizations. The fallout from this conclusion is, however, that the research methodologies traditionally used in strategy research will not unambiguously uncover these sources of sustainable advantage. Using organizational culture as an example of a possible source of sustainable advantage within a resource-based paradigm, a four-step research framework is suggested for isolating these organizational effects. Copyright © 1999 John Wiley & Sons, Ltd.

Shared knowledge, “glitches,” and product development performance

Abstract: Much recent thought in strategy has stressed the importance of organizational integration for competitive advantage. Empirical studies of product development have supported this emphasis by correlating integrating practices and superior performance. We propose, from a resource-based or capability view, that this correlation results from integration leading to patterns of shared knowledge among firm members, with the shared knowledge constituting a resource underlying product development capability. To explore this connection, we examine the product development efforts of a scientific software company. We define the ‘glitch’ as a costly error possible only because knowledge was not shared, and measure the influence of glitches on firm performance. At this company, gaps in shared knowledge did cause the company to incur significant excess costs. We also identify a set of ‘syndromes’ that can lead to glitches, and measure the relative importance of these syndromes. The glitch concept may offer a general tool for practical measurement of the marginal benefits of shared knowledge. Copyright © 1999 John Wiley & Sons, Ltd.

Knowledge management and competition in the consulting industry

Abstract: This article analyzes how Knowledge Management (KM) is likely to affect competition in the management consulting industry. KM represents a fundamental and qualitative change in this industry9s basic production technology. Because management consultants acquire information directly from their customers, for these firms, KM technology exhibits increasing returns to scale. As such, although KM clearly represents an opportunity for some consultants to build a sustainable competitive advantage, it is likely to lead to a shake-out. Based on the industry9s early experience with KM systems, this article describes a number of possible future outcomes as well as strategies that consultants can follow.

Corporate Entrepreneurship, Knowledge, and Competence Development

Abstract: The literature highlights the importance of corporate entrepreneurship (CE) for improving a company's market and financial performance. This paper extends the literature by focusing on the knowledge-creation processes within a firm's formal and informal CE activities. This multifaceted knowledge, which encompasses organizational, technical, and social dimensions, is developed by individuals or groups and diffused throughout the organization. Whether radical or incremental, this knowledge can generate new skills, which a company can then use to reconfigure the sources of its competitive advantage. This paper also discusses the role of intrapreneurs and CE champions, particularly in the creation and use of social capital, in the development of dynamic competencies.

Cities and Competitiveness

Abstract: Improved competitiveness, as we all know, is the path to economic nirvana. Plainly, it is a sought-after property of any economy: the term is frequently used by politicians and commentators on economic and business matters. As cities increasingly engage in competition with one another at different levels, the determinants of competitive advantage are coming under intense scrutiny. Many an economic development strategyÐ whether at national, regional or urban levelÐ starts from the premise that `something can be done’ to make an economy more competitive. There is a high-powered Competitiveness Advisory Group which reports to the European Commission (Jacquemin and Pench, 1997); the US has a special commission for competitiveness and the UK government produced a succession of White Papers on the subject in the 1990s. In the latest, the new Labour government highlights the need for the `right local environment for business success’ (Department of Trade and Industry, 1998). The OECD (1996, 1997a, 1997b) too has published a series of reports on the subject, looking particularly at new industries. But there is precious little agreement either on what the term `competitiveness’ means or on how policy should aim to enhance it. Yet most people have an instinctive understanding that some economies function better than others and that there are systematic reasons for this. We know one when we see one, but it is dif® cult to de® ne an elephant. It tends to be taken for granted that some cities have lost their competitive edge, although it is less obvious what variables demonstrate this. In many parts of the world, major cities that were the powerhouses of their respective economies have lost ground substantially. The decline of traditional manufacturing or mining lies behind the relative decline of many of the `rustbelt’ cities of the North and East of the US or the old industrial cities of northern Europe. The poor economic performance and growing social problems of many British cities, especially over the past three decades, have prompted searching questions about their competitiveness and whether or not they specialise in the `right’ sorts of activities. It can also be argued that globalisation, advances in information technology and farreaching structural change have altered the terms of competition between cities (JensenButler et al., 1997). Jockeying for position between the large ® nancial centres such as London, New York and Tokyo has been recognised for some time (Sassen, 1991; Frost and Spence, 1993). European integration impels cities to be more alert to the

Disappearing Acts: Gender, Power, and Relational Practice at Work

Abstract: With its move from hierarchical to team-based structures and its dismantling of functional barriers, the organization of the future is touted as a radical departure from traditional models. The worker of the future, we are told, must be a collaborative team player, able to give and receive help, empower others, and operate in a world of interdependence. This new worker needs relational skills and emotional intelligence - the ability to work effectively with others and understand the emotional context in which work takes place. Paradoxically, the very skills that give organizations a competitive advantage may be precisely those that prevent individual employees - especially women - from advancing. In this book Joyce K. Fletcher presents a study of female design engineers that has profound implications for attempts to change organizational culture, her research shows that emotional intelligence and relational behaviour often "get disappeared" in practice, not because they are ineffective but because they are associated with the feminine or softer side of work. Even when they are in line with stated goals, these behaviours are viewed as inappropriate to the workplace because they collide with powerful, gender-linked images of good workers and successful organizations. Fletcher describes how this collision of gender and power "disappears" the very behaviour that organizations say they need and undermines the possibility of radical change. She shows why the "female advantage" does not seem to be advantaging females or organizations. Finally, she suggests ways that individuals and organizations can make visible the invisible work - and people -critical to organizational competence and transformation.

A road map for natural capitalism.

Abstract: No one would run a business without accounting for its capital outlays. Yet most companies overlook one major capital component--the value of the earth's ecosystem services. It is a staggering omission; recent calculations place the value of the earth's total ecosystem services--water storage, atmosphere regulation, climate control, and so on--at $33 trillion a year. Not accounting for those costs has led to waste on a grand scale. But now a few farsighted companies are finding powerful business opportunities in conserving resources on a similarly grand scale. They are embarking on a journey toward "natural capitalism," a journey that comprises four major shifts in business practices. The first stage involves dramatically increasing the productivity of natural resources, stretching them as much as 100 times further than they do today. In the second stage, companies adopt closed-loop production systems that yield no waste or toxicity. The third stage requires a fundamental change of business model--from one of selling products to one of delivering services. For example, a manufacturer would sell lighting services rather than lightbulbs, thus benefitting the seller and customer for developing extremely efficient, durable lightbulbs. The last stage involves reinvesting in natural capital to restore, sustain, and expand the planet's ecosystem. Because natural capitalism is both necessary and profitable, it will sub-sume traditional industrialism, the authors argue, just as industrialism sub-sumed agrarianism. And the companies that are furthest down the road will have the competitive edge.

The Evolution of a Manufacturing System at Toyota

Abstract: Professor Takahiro Fujimoto, in his book ‘The Evolution of a Manufacturing System at Toyota,’ examines the entire postwar development of the systems that Toyota has used to become a dominant player in the automobile industry. That long-term historical view of a successful firm's development would be sufficient reason to pick up the book. The book's title does not indicate the important conceptual contribution that Fujimoto makes to our understanding of the evolution of systems within firms. He argues that only by combining a rational and orderly organization with a willingness to constantly consider change will a firm be able both to develop competitive advantage and sustain it.