Showing papers on "Competitive advantage published in 2008"

The knowledge-creating company

Abstract: How have Japanese companies become world leaders in the automotive and electronics industries, among others? What is the secret of their success? Two leading Japanese business experts, Ikujiro Nonaka and Hirotaka Takeuchi, are the first to tie the success of Japanese companies to their ability to create new knowledge and use it to produce successful products and technologies. In The Knowledge-Creating Company, Nonaka and Takeuchi provide an inside look at how Japanese companies go about creating this new knowledge organizationally. The authors point out that there are two types of knowledge: explicit knowledge, contained in manuals and procedures, and tacit knowledge, learned only by experience, and communicated only indirectly, through metaphor and analogy. U.S. managers focus on explicit knowledge. The Japanese, on the other hand, focus on tacit knowledge. And this, the authors argue, is the key to their success--the Japanese have learned how to transform tacit into explicit knowledge. To explain how this is done--and illuminate Japanese business practices as they do so--the authors range from Greek philosophy to Zen Buddhism, from classical economists to modern management gurus, illustrating the theory of organizational knowledge creation with case studies drawn from such firms as Honda, Canon, Matsushita, NEC, Nissan, 3M, GE, and even the U.S. Marines. For instance, using Matsushita's development of the Home Bakery (the world's first fully automated bread-baking machine for home use), they show how tacit knowledge can be converted to explicit knowledge: when the designers couldn't perfect the dough kneading mechanism, a software programmer apprenticed herself withthe master baker at Osaka International Hotel, gained a tacit understanding of kneading, and then conveyed this information to the engineers. In addition, the authors show that, to create knowledge, the best management style is neither top-down nor bottom-up, but rather what they call "middle-up-down," in which the middle managers form a bridge between the ideals of top management and the chaotic realities of the frontline. As we make the turn into the 21st century, a new society is emerging. Peter Drucker calls it the "knowledge society," one that is drastically different from the "industrial society," and one in which acquiring and applying knowledge will become key competitive factors. Nonaka and Takeuchi go a step further, arguing that creating knowledge will become the key to sustaining a competitive advantage in the future. Because the competitive environment and customer preferences changes constantly, knowledge perishes quickly. With The Knowledge-Creating Company, managers have at their fingertips years of insight from Japanese firms that reveal how to create knowledge continuously, and how to exploit it to make successful new products, services, and systems.

The five competitive forces that shape strategy.

Abstract: In 1979, a young associate professor at Harvard Business School published his first article for HBR, "How Competitive Forces Shape Strategy." In the years that followed, Michael Porter's explication of the five forces that determine the long-run profitability of any industry has shaped a generation of academic research and business practice. In this article, Porter undertakes a thorough reaffirmation and extension of his classic work of strategy formulation, which includes substantial new sections showing how to put the five forces analysis into practice. The five forces govern the profit structure of an industry by determining how the economic value it creates is apportioned. That value may be drained away through the rivalry among existing competitors, of course, but it can also be bargained away through the power of suppliers or the power of customers or be constrained by the threat of new entrants or the threat of substitutes. Strategy can be viewed as building defenses against the competitive forces or as finding a position in an industry where the forces are weaker. Changes in the strength of the forces signal changes in the competitive landscape critical to ongoing strategy formulation. In exploring the implications of the five forces framework, Porter explains why a fast-growing industry is not always a profitable one, how eliminating today's competitors through mergers and acquisitions can reduce an industry's profit potential, how government policies play a role by changing the relative strength of the forces, and how to use the forces to understand complements. He then shows how a company can influence the key forces in its industry to create a more favorable structure for itself or to expand the pie altogether. The five forces reveal why industry profitability is what it is. Only by understanding them can a company incorporate industry conditions into strategy.

Business Value of IT: An Essay on Expanding Research Directions to Keep up with the Times

Abstract: Rajiv Kohli Mason School of Business The College of William and Mary rajiv.kohli@mason.wm.edu

Value, rareness, competitive advantage, and performance: a conceptual‐level empirical investigation of the resource‐based view of the firm

Abstract: The resource-based view of the firm (RBV) hypothesizes that the exploitation of valuable, rare resources and capabilities contributes to a firm's competitive advantage, which in turn contributes to its performance. Despite this notion, few empirical studies test these hypotheses at the conceptual level. In response to this gap, this study empirically examines the relationships between value, rareness, competitive advantage, and performance. The results suggest that value and rareness are related to competitive advantage, that competitive advantage is related to performance, and that competitive advantage mediates the rareness-performance relationship. These findings have important academic and practitioner implications which are then discussed. Copyright © 2008 John Wiley & Sons, Ltd.

Responsive supply chain : A competitive strategy in a networked economy

Abstract: Supply chain management (SCM) has been considered as the most popular operations strategy for improving organizational competitiveness in the twenty-first century. In the early 1990s, agile manufacturing (AM) gained momentum and received due attention from both researchers and practitioners. In the mid-1990s, SCM began to attract interest. Both AM and SCM appear to differ in philosophical emphasis, but each complements the other in objectives for improving organizational competitiveness. For example, AM relies more on strategic alliances/partnerships (virtual enterprise environment) to achieve speed and flexibility. But the issues of cost and the integration of suppliers and customers have not been given due consideration in AM. By contrast, cost is given a great deal of attention in SCM, which focuses on the integration of suppliers and customers to achieve an integrated value chain with the help of information technologies and systems. Considering the significance of both AM and SCM for firms to improve their performance, an attempt has been made in this paper to analyze both AM and SCM with the objective of developing a framework for responsive supply chain (RSC). We compare their characteristics and objectives, review the selected literature, and analyze some case experiences on AM and SCM, and develop an integrated framework for a RSC. The proposed framework can be employed as a competitive strategy in a networked economy in which customized products/services are produced with virtual organizations and exchanged using e-commerce.

The Effectiveness of Strategic Political Management: A Dynamic Capabilities Framework

Abstract: We present a dynamic capabilities framework to explain the effective strategic management of the political environment. We argue that the effectiveness of political strategies will be a function of firms' dynamic political management capabilities and propose four firm-level strategies—proactive, defensive, anticipatory, and reactive— for managing the political environment effectively. We develop propositions to explain how particular dynamic capabilities are associated with the effectiveness of alternative political strategies and conclude with suggestions for future research into effective strategic political management.

Exploring the antecedents of potential absorptive capacity and its impact on innovation performance

Abstract: This paper builds upon the theoretical framework developed by Zahra and George [Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review 2002;27:185–203] to empirically explore the antecedents of potential absorptive capacity (PAC), i.e. the ability to identify and assimilate external knowledge flows. Based on a sample of 2464 innovative Spanish firms, we find evidence that R&D cooperation, external knowledge acquisition and experience with knowledge search are key antecedents of a firm's PAC. Also, during periods of important internal reshaping, when there are significant changes in strategy, design of the organization and marketing, firms exert more effort to accumulate PAC. Finally, we find that PAC is a source of competitive advantage in innovation, especially in the presence of efficient internal knowledge flows that help reduce the distance between potential and realized capacity.

Dynamic Capabilities and Knowledge Management: an Integrative Role for Learning?*

Abstract: Modern strategic management theories try to explain why firms differ, because new sources of competitive advantage are keenly sought in the dynamic and complex environment of global competition. Two areas in particular have attracted the attention of researchers: the role of dynamic capabilities, and the firm's abilities for knowledge management. In this paper, we argue that there is a link between these two concepts, which has not been fully articulated in the literature. The aim of the paper is therefore to ascertain the conceptual connection between them as a basis for future research. Our proposed framework acknowledges and critiques the distinct roots of each field, identifies boundaries, and proposes relationships between the constructs and firm performance.

The Execution Premium: Linking Strategy to Operations for Competitive Advantage

Abstract: In a world of stiffening competition, business strategy is more crucial than ever. Yet most organizations struggle in this area--not with formulating strategy but with executing it, or putting their strategy into action. Owing to execution failures, companies realize just a fraction of the financial performance promised in their strategic plans. It doesn't have to be that way, maintain Robert Kaplan and David Norton in The Execution Premium. Building on their breakthrough works on strategy-focused organizations, the authors describe a multistage system that enables you to gain measurable benefits from your carefully formulated business strategy. This book shows you how to: Develop an effective strategy--with tools such as SWOT analysis, vision formulation, and strategic change agendas Plan execution of the strategy--through portfolios of strategic initiatives linked to strategy maps and Balanced Scorecards Put your strategy into action--by integrating operational tools such as process dashboards, rolling forecasts, and activity-based costing Test and update your strategy--using carefully designed management meetings to review operational and strategic data Drawing on extensive research and detailed case studies from a broad array of industries, The Execution Premium presents a systematic and proven framework for achieving the financial results promised by your strategy.

Talent management: A strategy for improving employee recruitment, retention and engagement within hospitality organizations

Abstract: Purpose – The purpose of this article is to clarify what is meant by talent management and why it is important (particularly with respect to its affect on employee recruitment, retention and engagement), as well as to identify factors that are critical to its effective implementation. Design/methodology/approach – This article is based on a review of the academic and popular talent management literatures. Findings – Talent management is an espoused and enacted commitment to implementing an integrated, strategic and technology enabled approach to human resource management (HRM). This commitment stems in part from the widely shared belief that human resources are the organization's primary source of competitive advantage; an essential asset that is becoming in increasingly short supply. The benefits of an effectively implemented talent management strategy include improved employee recruitment and retention rates, and enhanced employee engagement. These outcomes in turn have been associated with improved operational and financial performance. The external and internal drivers and restraints for talent management are many. Of particular importance is senior management understanding and commitment. Practical implications – Hospitality organizations interested in implementing a talent management strategy would be well advised to: define what is meant by talent management; ensure CEO commitment; align talent management with the strategic goals of the organization; establish talent assessment, data management and analysis systems; ensure clear line management accountability; and conduct an audit of all HRM practices in relation to evidence‐based best practices. Originality/value – This article will be of value to anyone seeking to better understand talent management or to improve employee recruitment, retention and engagement.

Culture of Family Commitment and Strategic Flexibility: The Moderating Effect of Stewardship:

Abstract: The ability of family firms to identify and respond to changes in their external environments can be a key source of competitive advantage leading to success and survival. Some research, however, has suggested family firms are conservative and often lack the ability to adapt to their changing competitive environments. Using data from 248 family firms, we found a family firm's culture of commitment to the business is positively associated with its strategic flexibility—the ability to pursue new opportunities and respond to threats in the competitive environment. Further, we found stewardship-oriented organizational culture positively moderated the family commitment-strategic flexibility relationship.

The Service-Dominant Logic and a Hierarchy of Operant Resources: Developing Masterful Operant Resources and Implications for Marketing Strategy

Abstract: Marketing’s evolution toward a new dominant logic requires the focus of marketing to be on the intangible, dynamic, operant resources that are at the heart of competitive advantage and performance. First, building on resource-advantage theory’s notion of basic resources and higher-order resources, this article proposes a hierarchy of basic, composite, and interconnected operant resources. Second, reviewing research on business strategy and marketing strategy, several resources that correspond to the proposed hierarchy are identified and discussed. Third, the notion of developing masterful operant resources is introduced. Fourth, based on the proposed hierarchy and the notion of masterful operant resources, some exemplars of potential research avenues for marketing strategy are provided. Finally, the article concludes with the discussion of implications for marketing practitioners, researchers, and educators. In sum, this article extends and elaborates the concept of operant resources in the service-dominant logic of marketing.

Data mining to improve personnel selection and enhance human capital: A case study in high-technology industry

Abstract: The quality of human capital is crucial for high-tech companies to maintain competitive advantages in knowledge economy era. However, high-technology companies suffering from high turnover rates often find it hard to recruit the right talents. In addition to conventional human resource management approaches, there is an urgent need to develop effective personnel selection mechanism to find the talents who are the most suitable to their own organizations. This study aims to fill the gap by developing a data mining framework based on decision tree and association rules to generate useful rules for personnel selection. The results can provide decision rules relating personnel information with work performance and retention. An empirical study was conducted in a semiconductor company to support their hiring decision for indirect labors including engineers and managers with different job functions. The results demonstrated the practical viability of this approach. Moreover, based on discussions among domain experts and data miner, specific recruitment and human resource management strategies were created from the results.

The impact of human resource and operational management practices on company productivity: a longitudinal study

Abstract: Within the strategic human resource management (SHRM) perspective, psychology-based practices, especially empowerment, extensive training, and teamwork, are seen as vital to sustained competitive advantage. Other approaches, such as those of integrated manufacturing and lean production, place greater emphasis on operational initiatives such as total quality management, just-in-time, advanced manufacturing technology, and supply-chain partnering as determinants of organizational performance. We investigated the relative merits of these practices through a study of the productivity of 308 companies over 22 years, during which time they implemented some or all of these 7 practices. Consistent with SHRM theory we found performance benefits from empowerment and extensive training, with the adoption of teamwork serving to enhance both. In contrast, none of the operational practices were directly related to productivity nor did they interact with other practices in ways fully consistent with the notions of integrated manufacturing or lean production.

The impact of higher education on entrepreneurial intentions of university students in China

Abstract: Purpose – The aim of this article is to investigate the relationship between Chinese university students' higher educational background and their entrepreneurial intentions.Design/methodology/approach – The TPB model was adopted and tested for the formation of Chinese university students' entrepreneurial intentions using structural equation modeling. Data were collected from students of Tongji University in Shanghai, China.Findings – The main results of this empirical research suggest that diversity of educational background offers plausible explanations on the difference of entrepreneurial intentions of Chinese university students. Higher educational institutions should develop more flexible approaches with focus on different groups of students in accordance with their various educational backgrounds.Practical implications – In response to the change of graduate labour market and the quest for sustainable competitive advantage in China, higher educational institutions have to integrate the change of mind...

Strategic Management and Competitive Advantage

Abstract: PART ONE: The Tools of Strategic Analysis Chapter 1 What Is Strategy and the Strategic Management Process? Chapter 2 Evaluating a Firm's External Environment Chapter 3 Evaluating a Firm's Internal Capabilities PART TWO: Business Level Strategies Chapter 4 Cost Leadership Chapter 5 Product Differentiation PART THREE: Corporate Strategies Chapter 6 Vertical Integration Chapter 7 Corporate Diversification Chapter 8 Organizing to Implement Corporate Diversification Chapter 9 Strategic Alliances Chapter 10 Mergers and Acquisitions

Resource Management In Dyadic Competitive Rivalry: The Effects of Resource Bundling and Deployment

Abstract: Although resources are instrumental to a competitive advantage, management must effectively bundle and deploy an organization's resources for an advantage to be realized. Despite their importance, ...

Comparing the resource-based and relational views: Knowledge transfer and spillover in vertical alliances

Abstract: We compare resource-based and relational perspectives to examine competitive advantages within the context of vertical learning alliances. Previous research has shown that through such alliances suppliers acquire knowledge to forge new capabilities and attain performance improvements. We ask whether such improvements are exclusive to the learning partnership, or are available in other average partnerships of this supplier. We posit that the extent to which such performance improvements are partnership exclusive depends on whether the newly forged capabilities lie entirely within the supplier firm's boundaries, or at the learning dyad level. As such, we untie two forms of performance improvements arising from learning dyads. While the resource-based view helps explain the performance gains learning suppliers deploy across average partners, the relational view reveals the additional performance edge that remains exclusive to the learning partnership. Based on empirical evidence from a survey of 253 suppliers to the equipment industry, we find that partnership exclusive performance (i.e., ‘relational performance’), the true source of learning dyads' competitive advantage, is a function of suppliers acquiring know-how within the dyad, developing dyad-specific assets and capabilities, and structuring buyer-supplier relational governance mechanisms. We discuss implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd.

The Red Queen Effect: Competitive Actions And Firm Performance

Abstract: We investigate the Red Queen effect as a contest of competitive moves or actions among rivalrous firms. The results from a multi-industry study of over 4,700 actions confirms the existence of Red Q...

Fueling Innovation through Information Technology in SMEs

Abstract: A commitment to innovation has long been considered to be important to the success of entrepreneurial ventures and small firms (Fiol 1996). Research has shown that innovation stimulates ventures' growth (e.g., Wolff and Pett 2006; Motwani et al. 1999; Hax and Majluf 1991) and also provides a key source of competitive advantage in the absence of scale economies (Lewis et al. 2002). Considered from the resource-based view of the firm (Barney 1991), successful innovation may be dependent on the presence of other organization-specific skills and capabilities. For example, substantial evidence has begun to accumulate that suggests that appropriate strategic employment of information technology (IT) may be essential in translating strategies (e.g., innovation) into enhanced firm performance (e.g., Ray, Muhanna, and Barney 2005; Sakaguchi, Nicovich, and Dibrell 2004). A direct linkage between IT and firm performance was established by Powell and Dent-Micallef (1997). Bharadwaj (2000) found that high IT-capable firms (those that invest heavily in IT) outperform competitors that do not invest to the same extent (also see, Sambamurthy, Bharadwaj, and Grover 2003). These results suggest IT offers firms a competitive competency, which aids firms in differentiating themselves in the marketplace, such as through innovation. Despite their prominence as key constructs in the literature, possible relationships among innovation, IT, and performance have not been the subject of extensive investigation (Aral and Weill 2007; Oh and Pinsonneault 2007; Dewett and Jones 2001). It is generally acknowledged that the effective application of IT should enable firms to respond more appropriately to their environment (Das, Zahra, and Warkentin 1991) and to receive and process information more efficiently (Hanson 1999; Perrow 1967), thereby facilitating competitive advantage (Ray, Muhanna, and Barney 2005; Barney 1991; Porter and Millar 1985). Consequently, firms often invest substantial resources in IT assets (e.g., computer hardware, computer software, and personnel) (Krishnan and Sriram 2000). Over time, firms that invest more than their competitors in IT tend to realize greater returns from the marketplace (Bharadwaj 2000). However, there is not a substantial body of theory-driven empirical studies that demonstrate how innovation interacts with IT resources to enhance firm performance (for exceptions, see King and Burgess 2006; Huang and Liu 2005; Croteau and Raymond 2004; Johannessen, Olaisen, and Olsen 1999). The purpose of the present study is to contribute to the closure of this gap. We achieve this by investigating further the potential benefits of IT, here presented as investments by the firm in both tangible and intangible assets, for innovation pursuant to enhanced firm performance. Although prior studies have established evidence of beneficial performance and productivity impacts of IT investments (see, e.g., Huang and Liu 2005; Bharadwaj, Bharadwaj, and Konsynski 1999; Bonk 1996), there is also considerable skepticism to the benefits of IT and, consistent with what has become known as the "productivity paradox" (Trott and Hoecht 2004), IT investments do not meet performance objectives (e.g., Clegg et al. 1997), or that there is little or no relationship between IT investment and firm performance (e.g., Powell and Dent-Micallef 1997). Various arguments have been put forward as to why there is a lack of consensus in the value of IT investment. For example, Powell and Dent-Micallef (1997) suggest that IT is now so readily available and, as such, does not offer competitive performance. Others point to mismeasurement problems related to inputs and outputs (Wilcock and Lester 1997), confusion related to generalization of studies due to issues related to the level of analysis, and the role of time lag effects between investment in technology and its payoff (Sangho and Kim 2006). We acknowledge that although relationships among IT and strategic foci, such as innovation, and firm performance are the focus of considerable conjecture in various literatures (Sambamurthy, Bharadwaj, and Grover 2003; Johannessen, Olaisen, and Olsen 1999), further and ongoing investigation of these relationships in the context of small and medium-sized enterprises (SMEs) is warranted given the dramatic advancement of IT that has shifted SMEs to more advantageous positions in organizational flexibility and efficiency terms (Tanabe and Watanbe 2005; Izushi 2003; Larsen and Lomi 2002; Xiang and Lan 2001). …

Building engagement in the workplace

Abstract: Many of today’s organizations compete and try to survive on the basis of cutting prices and costs through redesigning business processes and downsizing the number of employees. Since there is a limit to cutting prices and downsizing, “New thinking and new approaches have become necessary for organizations to survive and to create sustainable growth and development” (Luthans, Norman, Avolio & Avey, in press; see also, Bakker & Schaufeli, 2008). This chapter proposes such a new approach: building engagement. I will argue and show that engagement can make a true difference and offers competitive advantage to organizations.

Nature of virtual teams: a summary of their advantages and disadvantages

Abstract: Purpose – This paper aims to extend knowledge about virtual teams and their advantages and disadvantages in a global business environment.Design/methodology/approach – Based on a literature review and reported findings from interviews with experts and practitioners in the field, the paper has identified and discussed the advantages and problems associated with creating and managing virtual teams.Findings – In today's competitive global economy, organizations capable of rapidly creating virtual teams of talented people can respond quickly to changing business environments. Capabilities of this type offer organizations a form of competitive advantage.Originality/value – By identifying the advantages and problems associated with virtual teams, organizations will be better able to successfully establish and manage such teams.

Co‐creating value through customers' experiences: the Nike case

Abstract: Purpose – This case aims to demonstrate how leading firms are learning how to sustain competitive advantage by co‐creating experiences of value with customers.Design/methodology/approach – The shoe company Nike provides a glimpse of the next “best practices” of value co‐creation with customers. By engaging with informed, connected, and networked customers around the globe, Nike has found their shared experiences to be a new source of value.Findings – The paper finds that customers are now informed, connected, networked, and empowered on a scale as never before, thanks to search engines, engagement platforms, the growth of internet‐based interest groups, and widespread high‐bandwidth communication and social interaction technologies. Customers have learned how to use these new tools to make their opinions and ideas heard.Practical implications – A few leading companies like Nike are involving customers in the value creation process by offering Internet sites where they can share their interactions and expe...