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Showing papers on "Competitive advantage published in 2001"


Journal Article
TL;DR: Porter as discussed by the authors argues that the Internet is not disruptive to most existing industries and established companies and, contrary to recent thought, the Internet itself will be neutralized as a source of advantage.
Abstract: Many of the pioneers of Internet business, both dot-coms and established companies, have competed in ways that violate nearly every precept of good strategy. Rather than focus on profits, they have chased customers indiscriminately through discounting, channel incentives, and advertising. Rather than concentrate on delivering value that earns an attractive price from customers, they have pursued indirect revenues such as advertising and click-through fees. Rather than make trade-offs, they have rushed to offer every conceivable product or service. It did not have to be this way--and it does not have to be in the future. When it comes to reinforcing a distinctive strategy, Michael Porter argues, the Internet provides a better technological platform than previous generations of IT. Gaining competitive advantage does not require a radically new approach to business; it requires building on the proven principles of effective strategy. Porter argues that, contrary to recent thought, the Internet is not disruptive to most existing industries and established companies. It rarely nullifies important sources of competitive advantage in an industry; it often makes them even more valuable. And as all companies embrace Internet technology, the Internet itself will be neutralized as a source of advantage. Robust competitive advantages will arise instead from traditional strengths such as unique products, proprietary content, and distinctive physical activities. Internet technology may be able to fortify those advantages, but it is unlikely to supplant them. Porter debunks such Internet myths as first-mover advantage, the power of virtual companies, and the multiplying rewards of network effects. He disentangles the distorted signals from the marketplace, explains why the Internet complements rather than cannibalizes existing ways of doing business, and outlines strategic imperatives for dot-coms and traditional companies.

3,558 citations


Journal ArticleDOI
TL;DR: The resource-based view can be positioned relative to at least three theoretical traditions: SCP-based theories of industry determinants of firm performance, neo-classical microeconomics, and evolutionary economics as discussed by the authors.

2,676 citations


Journal ArticleDOI
TL;DR: The results indicate that the social interaction and network ties dimensions of social capital are indeed associated with greater knowledge acquisition, but that the relationship quality dimension is negatively associated with knowledge acquisition.
Abstract: Employing a sample of 180 entrepreneurial high-technology ventures based in the United Kingdom, we examine the effects of social capital in key customer relationships on knowledge acquisition and knowledge exploitation. Building on the relational view and on social capital and knowledge-based theories, we propose that social capital facilitates external knowledge acquisition in key customer relationships and that such knowledge mediates the relationship between social capital and knowledge exploitation for competitive advantage. Our results indicate that the social interaction and network ties dimensions of social capital are indeed associated with greater knowledge acquisition, but that the relationship quality dimension is negatively associated with knowledge acquisition. Knowledge acquisition is, in turn, positively associated with knowledge exploitation for competitive advantage through new product development, technological distinctiveness, and sales cost efficiency. Further, our results provide evidence that knowledge acquisition plays a mediating role between social capital and knowledge exploitation. Copyright © 2001 John Wiley & Sons, Ltd.

2,556 citations


Posted Content
TL;DR: The authors define cultural entrepreneurship as the process of storytelling that mediates between extant stocks of entrepreneurial resources and subsequent capital acquisition and wealth creation, and propose a framework that focuses on how entrepreneurial stories facilitate the crafting of a new venture identity that serves as a touchstone upon which legitimacy may be conferred by investors, competitors, and consumers.
Abstract: We define cultural entrepreneurship as the process of storytelling that mediates between extant stocks of entrepreneurial resources and subsequent capital acquisition and wealth creation. We propose a framework that focuses on how entrepreneurial stories facilitate the crafting of a new venture identity that serves as a touchstone upon which legitimacy may be conferred by investors, competitors, and consumers, opening up access to new capital and market opportunities. Stories help create competitive advantage for entrepreneurs through focal content shaped by two key forms of entrepreneurial capital: firm-specific resource capital and industry-level institutional capital. We illustrate our ideas with anecdotal entrepreneurial stories that range from contemporary high technology accounts to the evolution of the mutual fund industry. Propositions are offered to guide future empirical research based on our framework. Theoretically, we aim to extend recent efforts to synthesize strategic and institutional perspectives by incorporating insights from contemporary approaches to culture and organizational identity.

1,672 citations


Journal ArticleDOI
Nick Bontis1
TL;DR: A review of the literature pertaining to the assessment of knowledge assets can be found in this article, where a variety of models have surfaced in an attempt to measure IC and this paper aims to highlight their strengths, weaknesses and operationalizations.
Abstract: This paper reviews the literature pertaining to the assessment of knowledge assets. Since knowledge assets are at the crux of sustainable competitive advantage, the burgeoning field of intellectual capital is an exciting area for both researchers and practitioners. Unfortunately, the measurement of such intangible assets is difficult. A variety of models have surfaced in an attempt to measure IC and this paper aims to highlight their strengths, weaknesses and operationalizations.

1,594 citations


Journal ArticleDOI
TL;DR: The authors define cultural entrepreneurship as the process of storytelling that mediates between extant stocks of entrepreneurial resources and subsequent capital acquisition and wealth creation, and propose a framework that focuses on how entrepreneurial stories facilitate the crafting of a new venture identity that serves as a touchstone upon which legitimacy may be conferred by investors, competitors, and consumers.
Abstract: We define cultural entrepreneurship as the process of storytelling that mediates between extant stocks of entrepreneurial resources and subsequent capital acquisition and wealth creation. We propose a framework that focuses on how entrepreneurial stories facilitate the crafting of a new venture identity that serves as a touchstone upon which legitimacy may be conferred by investors, competitors, and consumers, opening up access to new capital and market opportunities. Stories help create competitive advantage for entrepreneurs through focal content shaped by two key forms of entrepreneurial capital: firm-specific resource capital and industry-level institutional capital. We illustrate our ideas with anecdotal entrepreneurial stories that range from contemporary high-technology accounts to the evolution of the mutual fund industry. Propositions are offered to guide future empirical research based on our framework. Theoretically, we aim to extend recent efforts to synthesize strategic and institutional perspectives by incorporating insights from contemporary approaches to culture and organizational identity. Copyright © 2001 John Wiley & Sons, Ltd.

1,518 citations


Journal ArticleDOI
TL;DR: In this paper, the authors developed a multilevel conceptual model relating key network properties to competitive action and response, and a structural embeddedness perspective with a focus on simultaneous cooperation and competition was presented.
Abstract: Firms are embedded in networks of cooperative relationships that influence the flow of resources among them. Dynamic resource flows and differentiated structural positions lead to asymmetries and influence firms' competitive behavior toward others in the network. We develop a multilevel conceptual model relating key network properties to competitive action and response. A structural embeddedness perspective with a focus on simultaneous cooperation and competition advances our understanding of competitive dynamics and provides intriguing possibilities for future research.

1,196 citations


Journal ArticleDOI
TL;DR: In this article, the relative impact of industry and firm-specific factors on sustainable competitive advantage is explored by referring to respective assertions of two major perspectives over the last two decades: the Porter framework of competitive strategy and the more recent resource-based view of the firm.
Abstract: In this study we revisit some fundamental questions that are increasingly at the heart of current strategic management discourse regarding the relative impact of industry and firm-specific factors on sustainable competitive advantage. We explore this issue by referring to respective assertions of two major perspectives that dominate the literature over the last two decades: the Porter framework of competitive strategy and the more recent resource-based view of the firm. A composite model is proposed which elaborates upon both perspectives' divergent causal logic with respect to the conditions relevant for firm success. Empirical findings suggest that industry and firm specific effects are both important but explain different dimensions of performance. Where industry forces influence market performance and profitability, firm assets act upon accomplishments in the market arena (i.e., market performance), and via the latter, to profitability. The paper concludes with directions for future research that will seek to integrate both content and process aspects of firm behavior. Copyright © 2001 John Wiley & Sons, Ltd.

1,124 citations


Journal ArticleDOI
TL;DR: In this article, the authors propose a framework that shows how market-based assets and capabilities are leveraged via market-facing or core business processes to deliver superior customer value and competitive advantages.

1,028 citations


Journal ArticleDOI
Nick Bontis1
TL;DR: A comprehensive literature review from a variety of managerial disciplines is presented in this article, highlighting the research to date, avenues for future pursuit are also offered, as well as highlighting the possibilities for future research.
Abstract: Since organizational knowledge is at the crux of sustainable competitive advantage, the burgeoning field of intellectual capital is an exciting area for both researchers and practitioners. Intellectual capital is conceptualized from numerous disciplines making the field a mosaic of perspectives. Accountants are interested in how to measure it on the balance sheet, information technologists want to codify it on systems, sociologists want to balance power with it, psychologists want to develop minds because of it, human resource managers want to calculate an ROI on it, and training and development officers want to make sure that they can build it. The following article represents a comprehensive literature review from a variety of managerial disciplines. In addition to highlighting the research to date, avenues for future pursuit are also offered.

941 citations


Journal ArticleDOI
Abstract: Strategies for attaining competitive advantages emphasize developing and configuring existing resource strengths into a valuable and unique resource base. But what if you do not yet have a legacy of resource strengths? Entrepreneurs in emerging organizations must first assemble resources, then combine them to build a resource platform that will yield distinctive capabilities. The case studies included in this article illustrate the challenges entrepreneurs confront in identifying, attracting, combining, and transforming personal resources into organizational resources. We offer two analytical tools for assessing initial resource needs and developing a resource strategy that can enhance possibilities for wealth creation. Our pathway approach provides guidance for entrepreneurs constructing a resource base.

Journal ArticleDOI
TL;DR: In this paper, the authors identify human resource (HR) factors such as top management support, environmental training, employee empowerment, teamwork, and rewards systems as key elements of the implementation process of an environmental management system.
Abstract: Currently, many businesses are implementing a proactive, strategic tool known as an environmental management system (EMS) to gain a competitive advantage. Companies can no longer simply use compliance plans to deal with environmental concerns; consumer demands for greener products and services, and operational efficiencies require long term strategic and sustainable approaches for environmental management. An EMS includes documentation of: commitment and policy; planning; implementation; measurement and evaluation; and review and improvement. Establishment and maintenance of an EMS can be costly and time consuming, therefore implementation should be carefully structured to assure success. This paper identifies human resource (HR) factors such as top management support, environmental training, employee empowerment, teamwork, and rewards systems as key elements of the implementation process of an EMS. Furthermore, the interaction of these factors is examined in terms of the five categories of an EMS mentioned above. Finally, a conceptual model of the EMS‐HR factors is proposed to assist in proper facilitation of the environmental management program.

Journal Article
TL;DR: The secret, the authors say, is strategy as simple rules, which helps managers sort through opportunities and gain short-term advantage by exploiting the attractive ones in stable markets.
Abstract: The success of Yahoo!, eBay, Enron, and other companies that have become adept at morphing to meet the demands of changing markets can't be explained using traditional thinking about competitive strategy. These companies have succeeded by pursuing constantly evolving strategies in market spaces that were considered unattractive according to traditional measures. In this article--the third in an HBR series by Kathleen Eisenhardt and Donald Sull on strategy in the new economy--the authors ask, what are the sources of competitive advantage in high-velocity markets? The secret, they say, is strategy as simple rules. The companies know that the greatest opportunities for competitive advantage lie in market confusion, but they recognize the need for a few crucial strategic processes and a few simple rules. In traditional strategy, advantage comes from exploiting resources or stable market positions. In strategy as simple rules, advantage comes from successfully seizing fleeting opportunities. Key strategic processes, such as product innovation, partnering, or spinout creation, place the company where the flow of opportunities is greatest. Simple rules then provide the guidelines within which managers can pursue such opportunities. Simple rules, which grow out of experience, fall into five broad categories: how- to rules, boundary conditions, priority rules, timing rules, and exit rules. Companies with simple-rules strategies must follow the rules religiously and avoid the temptation to change them too frequently. A consistent strategy helps managers sort through opportunities and gain short-term advantage by exploiting the attractive ones. In stable markets, managers rely on complicated strategies built on detailed predictions of the future. But when business is complicated, strategy should be simple.

Journal ArticleDOI
TL;DR: The study introduces the concept of continuous morphing to describe the comprehensive ongoing transformation through which the focal firms sought to regenerate their transient competitive advantage on the Internet.
Abstract: In hypercompetitive environments, the established paradigms of sustainability of competitive advantage and stability of organizational form may have limited applicability. Using an in-depth case analysis of the firms Yahoo! and Excite, this study examines how the organizational form, function, and competitive advantage of these firms dynamically coevolved. The study introduces the concept of continuous morphing to describe the comprehensive ongoing transformation through which the focal firms sought to regenerate their transient competitive advantage on the Internet.

Journal ArticleDOI
TL;DR: This paper will combine RBV theory with characteristics of knowledge to show that organizational knowledge is a strategic asset and explain practical considerations for implementation of knowledge management principles.
Abstract: Knowledge is a resource that is valuable to an organization’s ability to innovate and compete. It exists within the individual employees, and also in a composite sense within the organization. According to the resource‐based view of the firm (RBV), strategic assets are the critical determinants of an organization’s ability to maintain a sustainable competitive advantage. This paper will combine RBV theory with characteristics of knowledge to show that organizational knowledge is a strategic asset. Knowledge management is discussed frequently in the literature as a mechanism for capturing and disseminating the knowledge that exists within the organization. This paper will also explain practical considerations for implementation of knowledge management principles.

Journal ArticleDOI
TL;DR: In this article, the authors explored the relationship between the degree to which total quality management practices were adopted within organizations and the corresponding competitive advantages achieved and found that the degree of TQM adoption depends on the type of organization.
Abstract: The authors explored the relationship between the degree to which total quality management (TQM) practices were adopted within organizations and the corresponding competitive advantages achieved. T...

Journal ArticleDOI
TL;DR: In this article, the authors suggest that the existence of complementary resources is a necessary but insufficient condition to achieve synergy, and that the resources must be effectively integrated and managed to realize the synergy.

Journal ArticleDOI
TL;DR: In this paper, the authors show that an automaker needs capabilities to coordinate various activities both externally with a supplier and internally within its own organization, in order to gain better component development performance.
Abstract: Outsourcing has become an important strategy for many firms. Yet, firms need to compete with their competitors who also outsource and may share the same suppliers. This article explores how a firm could outperform others in managing the division of labor with a supplier in product development. Drawing on the empirical data collected from the Japanese auto industry, this paper shows that an automaker needs capabilities to coordinate various activities both externally with a supplier and internally within its own organization, in order to gain better component development performance. Overall, the results imply that outsourcing does not work effectively without extensive internal effort. Copyright © 2001 John Wiley & Sons, Ltd.

Journal ArticleDOI
TL;DR: In this article, the authors define the term tacit knowledge and propose to redefine it, within the context of the resource-based view of the firm, as tacit skills, a methodology (based on causal mapping, self-Q and storytelling) for empirically researching the subject is outlined.
Abstract: With the emergence of the resource-based view of the firm and of the concept of core competencies, intangible resources, and tacit knowledge in particular have been argued to occupy a central place in the development of sustainable competitive advantage. This is because tacit knowledge is argued to be difficult to imitate, to substitute, to transfer and it is rare. However, there is little empirical research to support this theoretical proposition. Tacit knowledge has so far resisted operationalization. This paper sets out to define the term tacit knowledge and proposes to redefine it, within the context of the resource-based view of the firm, as tacit skills. A methodology (based on causal mapping, self-Q and storytelling) for empirically researching the subject is outlined.

Journal ArticleDOI
TL;DR: The logical and philosophical foundations of the competitive advantage hypothesis are explored, locating its philosophical foundations in the epistemologies of Bayesian induction, abductive inference and an instrumentalist, pragmatic philosophy of science.
Abstract: Strategic management theories invoke the concept of competitive advantage to explain firm performance, and empirical research investigates competitive advantage and describes how it operates. But as a performance hypothesis, competitive advantage has received surprisingly little formal justification, particularly in light of its centrality in strategy research and practice. As it happens, the core hypothesis - that competitive advantage produces sustained superior performance - finds little support in formal deductive or inductive inference, and the leading theories of competitive advantage incorporate refutation barriers that preclude meaningful empirical tests. The logical and philosophical foundations of the competitive advantage hypothesis are explored, locating its philosophical foundations in the epistemologies of Bayesian induction, abductive inference and an instrumentalist, pragmatic philosophy of science.

Journal ArticleDOI
TL;DR: In this article, the authors integrated research on the financial performance of multinational firms with research on foreign subsidiary survival, and examined the influences a firm's intangible assets and its experi...
Abstract: This study integrates research on the financial performance of multinational firms with research on foreign subsidiary survival. We examined the influences a firm’s intangible assets and its experi...

Journal Article
TL;DR: Porter et al. as discussed by the authors used data from the Organization for Economic Cooperation and Development and emerging nations over the past quarter century to show the striking degree to which location matters for successful innovation at the global technology frontier.
Abstract: Innovation has become the defining challenge for global competitiveness. Traditional thinking about the management of innovation focuses almost exclusively on internal factors ? the capabilities and processes within companies for creating and commercializing technology. Although the importance of these factors is undeniable, the external environment for innovation is at least as important. For example, the United States has been an especially attractive environment for innovation in pharmaceuticals in the 1990s, while Sweden and Finland have seen extraordinary rates of innovation in wireless technology. Michael Porter, a leading thinker on competitiveness and Bishop William Lawrence University Professor at Harvard University, and Scott Stern, professor of management at the MIT Sloan School of Management, describe how managers can understand the role of location in innovation and evaluate the innovative capacity of both countries and regions. Using data from the Organization for Economic Cooperation and Development and emerging nations over the past quarter century, their findings show the striking degree to which location matters for successful innovation at the global technology frontier. Their analysis sheds light on why individual nations have registered sharp differences in innovative performance. The strong effect of location on innovation holds important implications for companies and creates a new broader agenda for innovation management. Choosing R&D location and managing relationships with outside organizations should not be driven by input costs, taxes, subsidies or even the wage rates for scientists and engineers, as they often are. Instead, R&D investments should flow preferentially to the locations with the greatest innovative capacity. Taking active steps to harness and extend locational advantages takes on equal weight with R&D process management. Locational advantages ? rooted in proprietary information flows, special relationships with local companies, and preferential access to local institutions ? are competitive advantages that are difficult for outsiders to overcome. They can help explain an apparent paradox of globalization: Ideas and technologies that can be accessed at a distance cannot serve as a foundation for competitive advantage. Effective management of locational advantages may ultimately prove more sustainable than simply implementing corporate best practices.

Journal ArticleDOI
TL;DR: In this article, the authors define strategy as a sequence of competitive actions carried out over time, and develop and test a dynamic process model of competitive interaction among firms based on a sample of firms.
Abstract: By defining strategy as a sequence of competitive actions carried out over time, I develop and test a dynamic process model of competitive interaction among firms. Results based on a sample of thou...

Journal ArticleDOI
TL;DR: This study finds that organizations which use cross-national teams, teams with members who have prior overseas experience, or teams whose members communicate frequently with overseas managers in order to acquire information about tacit differences among countries have greater transnational product development capabilities.
Abstract: Based on a survey of 90 transnational product introductions, we find that the transnational product development capabilities of organizations significantly depend upon their ability to transfer and deploy tacit knowledge concerning overseas markets. Specifically, we find that organizations which use cross-national teams, teams with members who have prior overseas experience, or teams whose members communicate frequently with overseas managers in order to acquire information about tacit differences among countries have greater transnational product development capabilities. This study contributes to our understanding of how organizations transfer and deploy knowledge across borders for competitive advantage and makes an important contribution to the literature on global strategy. Copyright © 2001 John Wiley & Sons, Ltd.

Journal ArticleDOI
TL;DR: In this article, the authors take a resource-based view to develop and test hypotheses that relate managers' perceptions of causal ambiguity to their firm's performance and examine relationships between firm performance and causal ambiguity regarding the link between competencies and competitive advantage, and causally ambiguous characteristics of competencies.
Abstract: Resource-based theory argues that resources must be valuable, rare, inimitable, and lack substitutes to confer competitive advantage. Inimitability is a lynchpin of resource-based theory and central to understanding the sustainability of competitive advantage. Although scholars recognize a positive relationship between causal ambiguity and inimitability, the relationship among critical resources called competencies, causal ambiguity, and firm performance remains an unresolved conundrum. One perspective suggests that causal ambiguity regarding competencies and performance is necessary among internal and external managers for sustainable competitive advantage because it severely limits imitation. Causal ambiguity, therefore, enhances firm performance. Another view holds that causal ambiguity places a constraint on the transfer and leveraging of these competencies within a firm. In this case, causal ambiguity may adversely influence firm performance. This paper takes a resource-based view to develop and test hypotheses that relate managers' perceptions of causal ambiguity to their firm's performance. The hypotheses examine relationships between firm performance and (1) causal ambiguity regarding the link between competencies and competitive advantage, and (2) causally ambiguous characteristics of competencies. Research involving 224 executives in 17 organizations provides valuable insights into the relationships between causal ambiguity and firm performance. A model is then developed based on these findings. Particular consideration is given to the differing ways top and middle managers in a firm may experience causal ambiguity and to how these differences may be understood and managed. Copyright © 2001 John Wiley & Sons, Ltd.


Journal ArticleDOI
TL;DR: Beyond the traditional strategies used to enhance a team’s effectiveness, further efforts directed towards the specific technology and communication-related issues that concern dispersed team members are needed to supplement the set of best practices identified in the current study.

Journal ArticleDOI
Laura Horvath1
TL;DR: In this paper, the authors propose a collaborative e-business network that enables all the participants in a value chain to adopt simplified, standardized solutions based on common architectures and data models.
Abstract: As global markets grow increasingly efficient, competition no longer takes place between individual businesses, but between entire value chains. Collaboration through intelligent e‐business networks will provide the competitive edge that enables all the participants in a value chain to prevail and grow. Collaboration requires individual participants to adopt simplified, standardized solutions based on common architectures and data models. Time to market is critical, and participants will have to forego the luxuries of customization and modification that characterized the proprietary infrastructures of the past.

Journal ArticleDOI
TL;DR: In this paper, the authors examine managerial perceptions of corporate environmentalism and describe how key organizational members interpret the relationship between their firm and the biophysical environment, and conclude the implications of these factors for organizational theory and practice.
Abstract: Environmental issues are becoming increasingly important in organization theory and practice. Corporate environmentalism is emerging as a process of addressing environmental issues facing business firms. In this paper I examine managerial perceptions of corporate environmentalism and describes how key organizational members interpret the relationship between their firm and the biophysical environment. Corporate environmental orientation and environmental strategy focus are two themes of corporate environmentalism that emerge from the study. I discuss managerial perceptions of regulatory forces, public environmental concern, top management commitment and need for competitive advantage, and how perceptions of these factors might translate into environmental strategies. I conclude by discussing implications of corporate environmentalism for organizational theory and practice.

Journal ArticleDOI
TL;DR: This chapter advances a knowledge chain model that identifies and characterizes KM activities an organization can focus on to achieve competitiveness and presents some observations about avenues for future research to extend, test, and apply the model in business practices.
Abstract: Today, there is a growing recognition by researchers and practitioners about the importance of managing knowledge as a critical source for competitive advantage. Various assertions about competitiveness through knowledge management (KM) are consistent with results of empirical studies and lessons learned on the knowledge highways and byways. In spite of these macro-level contentions and success stories, there has been little investigation of a systematic means for studying connections between KM activity and competitiveness. This chapter advances a knowledge chain model that identifies and characterizes KM activities an organization can focus on to achieve competitiveness. The model is analogous to Porter’ s value chain and is grounded in a descriptive KM framework developed via a Delphi-study involving international KM experts. It is comprised of five primary activities that an organization’ s knowledge processors perform in manipulating knowledge resources, plus four secondary activities that support and guide their performance. Each activity is discussed in detail, including examples. Evidence is provided from the literature illustrating each activity’ s role in adding value to an organization to increase its competitiveness through improved productivity, agility, reputation, and innovation. In conclusion, we present some observations about avenues for future research to extend, test, and apply the model in business practices.