Showing papers on "Competitive advantage published in 2009"

The Design of Business: Why Design Thinking is the Next Competitive Advantage

Abstract: 1 The Science and Art of Business 2 Reliability versus Validity 3 The Competitive Advantage of Design Thinking 4 The Design of Procter & Gamble 5 Organizational Implications 6 Implications for Leadership 7 Implications for You

Channel Conflict and Coordination in the E‐Commerce Age

Abstract: A number of factors, including developments in Internet-based commerce and third-party logistics, have led many companies to consider engaging in direct sales. Such a company may at once be both a supplier to and a direct competitor of any existing reseller partners (e.g., land-based retailers), which can result in “channel conflict.” This can have momentous implications for distribution strategy. To generate managerial insights into this important issue, we develop a model that captures key attributes of such a setting, including various sources of inefficiency. We examine these in detail and identify a number of counterintuitive structural properties. For instance, the addition of a direct channel alongside a reseller channel is not necessarily detrimental to the reseller, given the associated adjustment in the manufacturer's pricing. In fact, both parties can benefit. Finally, we examine ways to adjust the manufacturer-reseller relationship that have been observed in industry. These include changes in wholesale pricing, paying the reseller a commission for diverting customers toward the direct channel, or conceding the demand fulfillment function entirely to the reseller. The latter two schemes could be mutually beneficial in that they achieve a division of labor according to each channel's competitive advantage.

Understanding dynamic capabilities: progress along a developmental path

Abstract: The aim of dynamic capabilities research is ambitious: to understand how firmscan sustain a competitive advantage by responding to and creating environmen-tal change (Teece, 2007). As one of the most central and difficult questionswithin the strategy domain, this might well be characterized as the Holy Grailof strategic management. The topical domain of dynamic capabilities, in conse-quence, is as broad and as complex as any in the field. It spans the domains ofstrategy process and content, and involves multiple levels of analysis, from man-agerial decision-processes, to organizational routines, to competitive inter-actions and environmental change. The complexity of the topic is matched,fittingly, by the complexity of the theoretical underpinnings. Undoubtedly, thishas generated some confusion. It is therefore not surprising that the critique ofArend and Bromiley (A&B) in the preceding essay reflects some of this confu-sion. Here, we address this by clarifying the dynamic capabilities concept, inrelation to its development and the challenges faced.We first survey the development path of dynamic capabilities research, anddiscuss the different theoretical bases of this emerging area of scholarship. Thenwe clarify issues regarding the definition of dynamic capabilities and discuss thelink between dynamic capabilities and firm performance. As part of our analy-sis, we address the two main conclusions of A&B regarding dynamic capabil-ities research. The first is that we should abandon the dynamic capabilitiesapproach if it does not ‘quickly develop a theoretical foundation’. The second isthat regardless of the pace of theory development, we should replace theseefforts with ‘work on strategic change tied to fuller theories of strategic organ-ization’. In what follows, we explain why these conclusions are premature andunwarranted. We also address other issues raised by A&B, focusing on the mainissues raised in the body of their commentary.

Sustainable supply chain management and inter-organizational resources: a literature review

Abstract: On the basis of a content analysis, this paper explores the role of sustainable supply chain management as a catalyst of generating valuable inter-organizational resources and thus possible sustained inter-firm competitive advantage through collaboration on environmental and social issues. Drawing on the resource-based view and its extension, the relational view, this paper highlights that partner-focused supply management capabilities evolve to corporate core competences as competition shifts from an inter-firm to an inter-supply-chain level. The ‘collaborative paradigm’ in supply chain management regards strategic collaboration as a crucial source of competitive advantage. Collaboration is even more essential when supply chains aim at ensuring simultaneously economic, environmental and social performance on a product's total life-cycle basis. Inter-firm resources and capabilities emerging from supply-chain-wide collaboration are prone to become sources of sustained inter-firm competitive advantage, since they are socially complex, causally ambiguous and historically grown and hence particularly difficult to imitate by competitors. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.

Stakeholder relations and the persistence of corporate financial performance

Abstract: We examine the effect of a firm's relations with its nonfinancial stakeholders, including its employees, suppliers, customers, and communities, on the persistence of both superior and inferior financial performance. In particular, integrating and extending the resource-based view of the firm and stakeholder management literatures, we develop the arguments that good stakeholder relations not only enable a firm with superior financial performance to sustain its competitive advantage for a longer period of time, but more importantly, also help poorly performing firms to recover from disadvantageous positions more quickly. The arguments are supported by the analysis of a series of first-order autoregressive models. Our findings further suggest that the positive effect of good stakeholder relations on the persistence of superior performance is not as strong as that of some other firm resources, such as technological knowledge, but it is the only factor examined that promises to help a firm recover from inferior performance. Therefore, the role of positive stakeholder relations in helping poorly performing firms recover is found to be more critical than its role in helping superior firms sustain their performance advantage. Copyright © 2009 John Wiley & Sons, Ltd.

Dynamic Capabilities and Strategic Management: Organizing for Innovation and Growth

Abstract: How do firms compete? How do firms earn above normal returns? What's needed to sustain superior performance long term? An increasingly powerful answer to these fundamental questions of business strategy lies in the concept of dynamic capabilities. These are the skills, processes, routines, organizational structures, and disciplines that enable firms to build, employ, and orchestrate intangible assets relevant to satisfying customer needs, and which cannot be readily replicated by competitors. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems; they also shape them through innovation, collaboration, learning, and involvement. David Teece was the pioneer of the dynamic capabilities perspective. It is grounded in 25 years of his research, teaching, and consultancy. His ideas have been influential in business strategy, management, and economics, and are relevant to innovation, technology management, and competition policy. Through his consultancy and advisory work he has also brought these ideas to bear in business and policy making around the world. This book is the clearest and most succinct statement of the core ideas of dynamic capabilities. Teece explains their genesis, application, and how they offer an alternative approach to much conventional strategic thinking grounded in simplistic and outdated understandings of industrial organizations and the foundations of competitive advantage. Accessibly written and presented, it will be an invaluable and stimulating tool for all those who want to understand this important contribution to strategic thinking, be they MBA students, academics, managers, or consultants.

Managing Strategic Alliances: What Do We Know Now, and Where Do We Go From Here?

Abstract: Executive Overview Alliances present a paradox for firms. On the one hand, firms engage in a large number of alliances to secure and extend their competitive advantage and growth; on the other hand, their alliances exhibit surprisingly low success rates. In this paper, we discuss how firms can address these failures by identifying some of the primary drivers of alliance success. First, we discuss how firms can achieve success with any individual alliance by considering critical factors at each phase of the alliance life cycle. Second, we show how firms can increase their overall alliance success by developing and institutionalizing firm-level capabilities to manage alliances. Third, we highlight emerging issues in the alliance context, including the need to recognize a new class of alliances between firms and not-for-profit organizations or individuals, the benefits of taking a “portfolio approach” to alliance strategy and management, and the opportunity to transfer one's alliance capabilities to the effe...

The 'Third Hand': IT-Enabled Competitive Advantage in Turbulence Through Improvisational Capabilities

Abstract: Organizations are increasingly engaged in competitive dynamics that are enabled or induced by IT. A key competitive dynamics question for many organizations is how to build a competitive advantage in turbulence with digital IT systems. While the literature has focused mostly on developing and exercising dynamic capabilities for planned reconfiguration of existing operational capabilities in fairly stable environments with patterned “waves,” this may not always be possible, or even appropriate, in highly turbulent environments with unexpected “storms.” We introduce improvisational capabilities as an alternative means for managing highly turbulent environments, defined as the ability to spontaneously reconfigure existing resources to build new operational capabilities to address urgent, unpredictable, and novel environmental situations. In contrast to the planned role of dynamic and operational capabilities and the ambidexterity that they jointly offer, improvisational capabilities are proposed to operate distinctly as a “third hand” that facilitates reconfiguration and change in highly turbulent environments. First, the paper develops the notion of improvisational capabilities and articulates the key differences between the two “reconfiguration” - improvisational and dynamic - capabilities. Second, the paper compares the relative effects of improvisational and dynamic capabilities in the context of New Product Development (NPD) in different levels of environmental turbulence. Third, the paper shows how IT leveraging capability in NPD is decomposed into its three digital IT systems: Project and Resource Management Systems (PRMS), Organizational Memory Systems (OMS), and Cooperative Work Systems (CWS) - and how each of these three IT systems enhances improvisational capabilities, an effect that is accentuated in highly turbulent environments.The results show that while dynamic capabilities are the primary predictor of competitive advantage in moderately turbulent environments, improvisational capabilities fully dominate in highly turbulent environments. Besides discriminant validity, the distinction between improvisational and dynamic capabilities is evidenced by the differential effects of IT leveraging capability on improvisational and dynamic capabilities. The results show that the more the IT leveraging capability is catered toward managing resources (through PRMS) and team collaboration (through CWS) rather than relying on past knowledge and procedures (through OMS), the more it is positively associated with improvisational capabilities, particularly in more turbulent environments. The paper draws implications for how different IT systems can influence improvisational capabilities and competitive advantage in turbulent environments, thereby enhancing our understanding of the role of IT systems on reconfiguration capabilities. The paper discusses the theoretical and practical implications of building and exercising the “third hand” of improvisational capabilities for IT-enabled competitive dynamics in turbulence.

What really is alliance management capability and how does it impact alliance outcomes and success

Abstract: Strategy scholars have asserted that a firm's alliance capability provides competitive advantage. As interest in alliance capability has grown, we see two streams of research emerge that address different, but equally important, issues related to this subject: one stream that focuses on how alliance capability develops in firms, and a second stream that investigates what elements specifically constitute a firm's alliance capability. In recent literature, the question of how firms develop alliance capability has received greater attention than the question of what elements actually comprise it; therefore, in this study we address the latter issue in great depth. We do this by building on prior research and on our fieldwork, to conceptualize alliance management capability as a multidimensional construct that comprises three distinct but related aspects or skills to address the following aspects in managing a given individual alliance after it is up and running: coordination, communication, and bonding. We then test our conceptualization in a framework that also links this capability to relevant outcomes at the alliance and firm level. We use survey and secondary data from a large sample of interfirm relationships between software service providers and three major global software vendors. We find general empirical support for our conceptualization of alliance management capability and for its predictive validity in impacting certain alliance outcomes. Copyright © 2009 John Wiley & Sons, Ltd.

Knowledge and Competitive Advantage: The Coevolution of Firms, Technology, and National Institutions

Abstract: This issue of JIBS offers reviews of two books that analyse the dynamic interaction between the business environments and business strategies in very different ways. The institutional underpinnings for business strategies are a major research topic for comparative management, aiming to explain why in different contexts firms pursue different strategies, and with different implications for performance. J Peter Murman in ‘Knowledge and Competitive Advantage’ takes a historical perspective focusing on the co-evolutionary processes between national innovation systems, business strategies, and performance. This books thus adds to the industry-level longitudinal research reviewed in JIBS no. 4/2003, Tom Murtha et al.'s ‘Managing New Industry Creation’ and David McKendrick et al.'s ‘From Silicon Valley to Singapore’.

A fuzzy supplier selection model with the consideration of benefits, opportunities, costs and risks

Abstract: Even though the research on supplier selection is abundant, the works usually only consider the critical success factors in the buyer-supplier relationship. However, the negative aspects of the buyer-supplier relationship must also be considered simultaneously. The main objective in this study is to propose an analytical approach to select suppliers under a fuzzy environment. A fuzzy analytic hierarchy process (FAHP) model, which incorporates the benefits, opportunities, costs and risks (BOCR) concept, is constructed to evaluate various aspects of suppliers. Multiple factors that are positively or negatively affecting the success of the relationship are analyzed by taking into account experts' opinion on their importance, and a performance ranking of the suppliers is obtained. TFT-LCD manufacturers in Taiwan, which is the largest TFT-LCD producer country in the world, are facing increasing competition nowadays, and the selection of the most appropriate suppliers for cooperation is essential for firms to achieve competitive advantage. A case study of backlight unit supplier selection for a TFT-LCD manufacturer is presented, and the proposed model is applied to facilitate the decision process. The model is a general form that can be tailored and applied by firms that are making decisions on supplier selection.

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, little research has examined these managerial actions. Using a sample of competitive dyads, we tested theory regarding the effects of rivals' comparative resource stocks and managers' bundling and deployment actions on competitive outcomes. Results indicate that both comparative advantages in resource stocks and managerial actions affect performance. However, their efficacy depends on contextual factors and the deployment flexibility of specific resources. Thus, resource management actions are critical to achieving and sustaining competitive advantage.

Firm-specific knowledge resources and competitive advantage: the roles of economic- and relationship-based employee governance mechanisms

Abstract: The resource-based view of the firm emphasizes the role of firm-specific resources, especially firm-specific knowledge resources, in helping a firm to achieve sustainable competitive advantage. However, the deployment of firm-specific knowledge often requires key employees to make specialized human capital investments that are not easily redeployable to other settings. Thus, in the absence of effective safeguards and trust building devices, employees with foresight may be reluctant to make such specialized investments. This study explores both economic- and relationship-based governance mechanisms that might mitigate this underinvestment problem. Effective use of these governance mechanisms enables a firm to obtain greater performance from its efforts to deploy firm-specific knowledge resources. Empirical results further support these key arguments. Copyright © 2009 John Wiley & Sons, Ltd.

The impact of “soft” and “hard” TQM elements on quality management results

Abstract: Purpose – The purpose of this paper is to explore the relationships between “soft” and “hard” TQM elements and quality management results.Design/methodology/approach – Empirical data were drawn from 370 Greek companies using the questionnaire method. Confirmatory Factor Analysis was used to examine constructs' reliability and validity, while the relationships between them were examined through Structural Equation Modelling.Findings – The study proved that quality improvement and the consolidation of the company's market position are influenced mainly by adopting “soft” TQM elements and secondarily “hard” TQM elements.Research limitations/implications – The fact that the study was based on quality managers' perceptions and the participation of companies from all sectors creates limitations, but also future research orientations.Practical implications – To achieve benefits and obtain a competitive advantage, which is of major importance for the sustainability of a company, quality design, control and improv...

Stakeholders and competitive advantage: the case of iso 14001

Abstract: This paper integrates a stakeholder perspective into the resource-based view of the firm, to analyze the mechanisms that link the adoption of the international Environmental Management Standard ISO 14001 to firms' competitive advantage. This paper shows that the perceived competitiveness impact of the standard depends mostly on the involvement of firms' external stakeholders (distributors, customers, community members, and regulatory agencies) in its design. ISO 14001 is a process standard, and it is difficult for stakeholders to get credible information on the effectiveness of the standard if they are not involved in its design. Stakeholders' involvement in a firm's ISO 14001 standard becomes a valuable organizational capability, which is difficult to imitate by competitors. The analysis is supported by primary data collected from a questionnaire mailed to 152 firms, resulting in 55 observations representing 30% of the total number of firms certified in the U.S. in August 1998.

Opening up for competitive advantage – How Deutsche Telekom creates an open innovation ecosystem

Abstract: When, on 21st September 2006, ‘The Economist’ compared incumbent telecommunication operators with dinosaurs that could soon face extinction, most readers were ready to agree. The mixture of declining revenues and fierce competition was believed to shake the market and soon to dethrone former national champions. However, there are ways to fight that extinction and one way is to open up for competitive advantage. This paper reflects on a case study at Deutsche Telekom, the German national telecommunication operator. The aim of this study is to analyse to what extent the open innovation paradigm has been embraced inside this now multinational company. Using empirical evidence from 15 in-depth interviews, we identify 11 open innovation instruments and detail their value contribution. We can show that Deutsche Telekom has successfully enhanced its innovation capacity by opening up its traditional development process and embracing external creativity and knowledge resources.

Why and how to adopt green management into business organizations

Abstract: Purpose – The purpose of this paper is to explore and investigate the process of green management adoption in small and medium‐sized enterprises.Design/methodology/approach – The study used the qualitative methods of case study, in‐depth interviews and document analysis to collect data from two companies, one in the acoustic equipment, the other in the electronics industry.Findings – The paper finds that the extant literature in the field of business and management has largely ignored green management practices within small and medium‐sized enterprises (SMEs). The study finds that SMEs can make themselves greener by making strategic and organizational changes. For greener management, the factors of organizational structure, innovation capability, human resources, cost savings and competitive advantage can influence organizational change. The outcomes of the case studies confirmed this. The paper argues that further research is needed in order to identify how management practice might reduce negative susta...

Selecting management systems for sustainable development in SMEs: A novel hybrid model based on DEMATEL, ANP, and ZOGP

Abstract: In recent years, sustainable development strategy for enterprises has become an important issue around the globe. There are four management systems (i.e. ISO 9001, ISO 14001, OHSAS 18001, and SA 8000) that can help small and medium enterprises (SMEs) to create sustainable competitive advantages. In view of the fact that the shortage of resources - time, personnel, as well as money - rules most SMEs, this paper proposes a novel hybrid model for selecting optimal management systems under resource constraints, and illustrates the practical application of such a model through an example. This model first applies the Decision Making Trial and Evaluation Laboratory (DEMATEL) approach to construct interrelations among criteria that organizations require. The second step is to obtain the criterion weights through ANP. Lastly, ANP is integrated with a zero-one goal programming (ZOGP) model to obtain optimal alternatives with desired organizational benefits by fully utilizing limited resources. The purpose of this study is to present an integrated approach that could cope with the interdependencies among various criteria and deal with the constraints on resources, and to demonstrate how to select management systems for phased implementation. Therefore, the main contribution of this paper is to enhance the capacity of SMEs to effectively address the challenge of sustainable development through a novel model of prioritizing available management systems.

An Ambidexterity Perspective Toward Multinational Enterprises From Emerging Economies

Abstract: Executive Overview In this article we present an ambidexterity perspective on the international expansion of emerging economy enterprises, highlighting the unique strategic behavior of emerging market multinational enterprises (EM MNEs). Specifically, we conceptualize ambidexterity as a multidimensional term comprising co-evolution, co-competence, co-opetition, and co-orientation. While all firms need and maintain some degree of ambidexterity, EM MNEs have stronger motives and abilities to build and leverage such ambidexterity to offset their late-mover disadvantages. They behave co-evolutionarily to deal with the external environment they face at home and abroad, leverage their co-competence (transactional and relational) to compete against their global rivals, develop co-opetitive (simultaneous cooperation and competition) ties with their business stakeholders, and maintain co-orientations (leveraging competitive advantages to bolster short-term survival and compensating competitive disadvantages for lo...

Manufacturing Strategy: At the Intersection of Two Paradigm Shifts

Abstract: The concept of “manufacturing strategy” is still, in human terms, barely past adolescence. In years, it is younger than most of the MBAs who study it today. So it is not surprising that–like them–it has been undergoing almost continual growth and elaboration throughout its short life, as it tested itself against the real world and as that world evolved. Today it is facing perhaps the greatest challenge in its short history, as it finds itself in the crossfire of debates about core aspects of its two parent disciplines: manufacturing management and competitive strategy. This paper begins by briefly reviewing some of the key steps in the conceptual development of the manufacturing strategy paradigm, then describes the attacks now being directed at both the manufacturing management and the competitive strategy paradigms, and finally discusses the new perspectives that these two paradigm shifts are shedding on some familiar problems.

Building corporate social responsibility into strategy

Abstract: Purpose – This paper seeks to explore how corporate social responsibility (CSR) can be effectively built into firm strategy.Design/methodology/approach – By drawing upon classic work in the field, the paper first offers conceptual discussion and then systematically develops a means of incorporating CSR into strategy.Findings – Common approaches to CSR, such as PR campaigns, codes of ethics and triple bottom line reports are far too removed from strategy. To counter common and generally non‐strategic approaches, a framework is offered which demonstrates that CSR can be linked integrally with strategy, and highlights an approach to consider CSR across six dimensions of firm strategy.Practical implications – Firms do not have to respond reactively towards CSR nor do they have to struggle with understanding the strategic implications of CSR. The paper demonstrates that examining CSR in the context of firm strategy is both possible and increasingly necessary to developing competitive advantage in the current e...

Building Information Modeling: A Strategic Implementation Guide for Architects, Engineers, Constructors, and Real Estate Asset Managers

Abstract: The optimal approach to design, build, operate, and maintain buildings With this strategic guide to building information modeling (BIM), youll learn how to implement this new technology as part of a comprehensive systems approach to the design, construction, management, operation, maintenance, and use of buildings. The authors, among the leading experts and pioneers in BIM, show you how BIM supports more streamlined, integrated, and efficient business processes throughout the life cycle of buildings, from their initial conception through their eventual retirement or reuse. The result is better quality buildings, lower construction and operating costs, shorter project turnaround times, and a higher quality of building information to support better business decisions. Moreover, they set forth a plan for incorporating BIM into every organizations existing workflows, enabling you to take full advantage of all the benefits that BIM offers. Everything you need to implement a BIM approach is set forth in detail, including: The business case for BIM, demonstrating how it can improve collaboration, facilitate better design and construction, optimize workflow, and help reduce risk Guidance for meeting the challenges of BIM such as an entrenched business culture, the proliferation of BIM tools, and the uneven rates of BIM adoption The big picture view showing how your organization can work with business partners and fit into the building life cycle in a BIM-enabled industry Throughout the book, sample documents and figures help you better understand the principles of BIM and how it works in practice. In addition, first-hand accounts show you exactly how adopters of BIM have gained a competitive edge. Architects, engineers, constructors, building owners, and facility managers can turn to this book to realize the full potential of BIM and radically improve the way buildings are designed, built, operated, and maintained.