Showing papers on "Competitive advantage published in 2015"

Employee engagement, human resource management practices and competitive advantage

Abstract: Purpose – The purpose of this paper is to argue in support of a model that shows how four key HRM practices focused on engagement influence organizational climate, job demands and job resources, the psychological experiences of safety, meaningfulness and availability at work, employee engagement, and individual, group and organizational performance and competitive advantage Design/methodology/approach – This conceptual review focuses on the research evidence showing interrelationships between organizational context factors, job factors, individual employee psychological and motivational factors, employee outcomes, organizational outcomes and competitive advantage The proposed model integrates frameworks that have previously run independently in the HR and engagement literatures Findings – The authors conclude that HRM practitioners need to move beyond the routine administration of annual engagement surveys and need to embed engagement in HRM policies and practices such personnel selection, socializatio

Does product market competition foster corporate social responsibility? Evidence from trade liberalization

Abstract: This study examines whether product market competition affects corporate social responsibility (CSR). To obtain exogenous variation in product market competition, I exploit a quasi-natural experiment provided by large import tariff reductions that occurred between 1992 and 2005 in the U.S. manufacturing sector. Using a difference-in-differences methodology, I find that domestic companies respond to tariff reductions by increasing their engagement in CSR. This finding supports the view of “CSR as a competitive strategy” that allows companies to differentiate themselves from their foreign rivals. Overall, my results highlight that trade liberalization is an important factor that shapes

Institutional Strategies in Emerging Markets

Abstract: We review and integrate a wide range of literature that has examined the strategies by which organizations navigate institutionally diverse settings and capture rents outside of the marketplace. We synthesize this body of research under the umbrella term institutional strategies, which we define as the comprehensive set of plans and actions directed at leveraging and shaping socio-political and cultural institutions to obtain or retain competitive advantage. Our review of institutional strategies is focused on emerging market contexts, settings that are characterized by weak capital market and regulatory infrastructures and fast-paced turbulent change. Under such challenging conditions, strategies aimed at shaping the institutional environment may be especially critical to an organization's performance and long-term survival. Our review reveals that organizations engage in three specific and identifiable sets of institutional strategies, which we term relational, infrastructure-building, and socio...

Product innovation in family versus nonfamily firms:an exploratory analysis

Abstract: How family firms manage product innovation remains an overlooked topic in existing business research. This happens despite the fact that family businesses play a crucial role across all economies, and they often use technological innovation to nurture their competitive advantage. By drawing upon the resource-based view of the firm as well as agency, stewardship, and behavioral theories and using empirical evidence gathered through a multiple case study, the paper studies how and why the anatomy of the product innovation process differs between family and nonfamily firms. The analysis shows that family businesses differ from nonfamily ones as regards product innovation strategies and organization of the innovation process.

New Product Design: Concept, Measurement, and Consequences

Abstract: Product design is a source of competitive advantage for companies and is an important driver of company performance. Drawing on an extensive literature review and consumer interviews, the authors define product design and its dimensions. Using data from three samples (6,418 U.S. consumers and 1,083 and 583 European consumers), the authors develop and validate a new scale to measure product design along the dimensions of aesthetics, functionality, and symbolism. In addition, they investigate the impact of these design dimensions on purchase intention, word of mouth, and willingness to pay. The results indicate that the design dimensions positively influence willingness to pay and also have a positive effect on purchase intention and word of mouth, both directly and indirectly through brand attitude.

Digitalized Product-Service Systems in Manufacturing Firms: A Case Study Analysis: Linking Digital Systems with Physical Products to Create Novel Product-Service Bundles That Provide Services Independently and Proactively Can Enable Advanced Services and Promote Growth

Abstract: The term servitization has been used in recent years to describe a growing service orientation among product manufacturers, who are increasingly moving from simply selling products to offering supportive services tailored to the product (Baines et al. 2009; Wise and Baumgartner 1999; Vandermerwe and Rada 1988). These services range from traditional product-related services such as maintenance, repair, and training to advanced customer-oriented services (Lay 2014; Oliva and Kallenberg 2003; Mathieu 2001). Advanced services typically take the form of product-service systems (PSS), or physical products bundled with intangible services in a customized manner to fulfill highly individual customer needs (Tukker and Tischner 2006; Goedkoop et al. 1999). These innovative, individualized product-service bundles increase the value delivered to the customer and hence increase the competitiveness of the provider (Boyt and Harvey 1997). The move toward servitization has coincided with a rising trend toward digitalization, with manufacturers equipping products with intelligent digital systems that allow the products to operate independently of human intervention and communicate with other machines. As a logical consequence of the confluence of servitization with this trend toward intelligent machines, an increasing number of manufacturers are using digital systems to support their services (Minister and Meiren 2011), creating totally new industrial product-service offerings, such as comprehensive remote services that bring digital and physical systems together to pave the way for, for instance, availability guarantees. These new kinds of offerings may in turn lead to far-reaching reconfigurations of the mechanisms of value creation in manufacturing. Thus, manufacturers cannot afford to ignore these emerging forces, which have the power to completely reshape the industrial landscape. Companies that do not keep up with these developments may find themselves threatened with extinction in the near future, as competitors with more customized, responsive offerings gain advantage. Three practical case studies from our joint research projects on servitization show how companies can combine digital systems with PSS to harvest value and build competitive advantage. Services Innovation and Digitalization Previous studies of servitization have assumed that manufacturers move from product manufacturer to solution provider along a defined transformation path (Gebauer, Fleisch, and Friedli 2005; Gebauer 2004). This transition path is typically described as taking place in stages, with each stage offering different potentials for differentiation (see, for example, Matthyssens and Vandenbempt 2010; Gebauer, Bravo-Sanchez, and Fleisch 2008; Matthyssens and Vandenbempt 2008; Penttinen and Palmer 2007; Oliva and Kallenberg 2003; More 2001). At the end of the path, manufacturers offer innovative PSS, such as availability guarantees or build-operate-transfer (BOT) models, which increase customer value on the one hand and create competitive advantage for the provider on the other (Brady, Davies, and Gann 2005; Boyt and Harvey 1997). While PSS have been widely discussed--see Velamuri, Neyer, and Moslein (2011) for a review of the literature--the effect of the digital revolution on this servitization pathway has been less well explored. Most articles have dealt with the new challenges and impacts of digitalized services, focusing on how they differ from more traditional product-related services. What is missing in the literature is a comprehensive framework bringing together the emerging trends of servitization and digitalization in one conceptual structure. The integration of digitalization with services innovation has important implications for services. For instance, because digital services can be provided independent of manufacturer and customer location, traditional service characteristics like perishability and inseparability do not apply to digital service creation (Holtbriigge, Holzmuller, and von Wangenheim 2007). …

Knowledge Management as an important tool in Organisational Management: A Review of Literature

Abstract: Introduction If information is the currency of the knowledge economy, human expertise is the bank where it is kept, invested and exchanged--the researcher. "A firm's competitive advantage depends more than anything on its knowledge: on what it knows--how it uses what it knows--and how fast it can know something new."--HR Magazine 2009, p.1. It is no longer a controversy that we live in a globalised world characterised by fast information transfer across large geographic areas by means of the Internet. The consequence of this globalization is the emergence of knowledge-based economies where importance is placed on effective management of human capital to ensure that workers continue to create the right value for the economy. Nowadays, organisations no longer compete solely on the basis of financial capital and strength, rather knowledge is the new competitive advantage in business. In fact the Gross Domestic Product (GDP) growth rate is now determined, amongst other factors, by the quantum and quality of knowledge stock harnessed and applied in the production process in sectors of the economy. This knowledge based economies require that Knowledge Management (KM) good practices be put in place to improve organisation effectiveness. There is a popular saying that knowledge is power. Based on this assertion, it can be said that the management of knowledge is the key to power. KM as a discipline has been a focal point of discussion over the past decades. In recent years, the importance of KM has been widely recognized as the foundations of industrialized economies shifted from natural resources to intellectual assets. Since 1995 there has been an explosion in the literature surrounding the developing concept of KM. Today, there is hardly a conference or published journal without seeing literature referring to the concept, KM. The importance of KM as a critical tool in organisation and the society can therefore not be overemphasised. As Desouza (2011) put it, KM has become a trendy buzzword. Much of the interest in KM came from the realization that organisations compete on their knowledge-based assets. Even noncompetitive organisations (e.g. governmental institutions and nonprofits organisations) succeed or fail based on their ability to leverage their knowledge-based assets. It is stated by Teng and Song (2011) that the importance of KM is no longer restricted to knowledge intensive firms in the high-tech industries but to all sectors of the economy. Zack (2003) further says that even companies in the traditional industries, such as cement, can benefit greatly from KM. In essence KM is beneficial to all sectors, be it educational, banking, telecommunications, production/manufacturing, and even the public sectors. The management of knowledge has generated considerable interest in business and management circles due to its capability to deliver to organisations, strategic results relating to profitability, competitiveness and capacity enhancement (Chua, 2009; Jeon, Kim and Koh 2011). The management of knowledge is promoted as an important and necessary factor for organisational survival and maintenance of competitive strength. KM is identified as a framework for designing an organisation's strategy, structures, and processes so that the organisation can use what it knows to learn and to create economic and social value for its customers and community. Organisations need a good capacity to retain, develop, organise, and utilise their employees' capabilities in order to remain at the forefront and have an edge over competitors. Knowledge and the management of knowledge is regarded as an important features for organisational survival; while the key to understanding the successes and failures of KM within organisations is the identification of resources that allow organisations to recognize, create, transform and distribute knowledge. Organisations that effectively manage and transfer their knowledge are more innovative and perform better (Riege, 2007). …

Scandinavian Cooperative Advantage: The Theory and Practice of Stakeholder Engagement in Scandinavia

Abstract: In this article, we first provide evidence that Scandinavian contributions to stakeholder theory over the past 50 years play a much larger role in its development than is presently acknowledged. These contributions include the first publication and description of the term ''stakeholder'', the first stakeholder map, and the devel- opment of three fundamental tenets of stakeholder theory: jointness of interests, cooperative strategic posture, and rejection of a narrowly economic view of the firm. We then explore the current practices of Scandinavian companies through which we identify the evidence of relationships to these historical contributions. Thus, we propose that Scandinavia offers a particularly promising context from which to draw inspiration regarding effective company- stakeholder cooperation and where ample of examples of what is more recently referred to as ''creating shared value'' can be found. We conclude by endorsing the expression ''Scandinavian cooperative advantage'' in an effort to draw attention to the Scandinavian context and encourage the field of strategic management to shift its focus from achieving a competitive advantage toward achieving a cooperative advantage.

Social exclusion and space

Abstract: Professor Michael Porter argues for a new economic model of inner-city revitalization. He favors private, for-profit initiatives based on economic self-interest, rather than artificial inducements, charity, and government mandates. Such an approach will only work, Porter argues, if it takes advantage of true competitive advantages of the inner city. If companies are to prosper, they must find a compelling competitive reason for locating in the inner city. The first step towards developing an economic model is identifying inner city's true competitive advantages. There is a common misperception that the inner city enjoys two main advantages: low-cost real estate and labor. The inner-city market itself represents the most immediate opportunity for inner-city-based entrepreneurs and businesses. The federal government has made efforts to address the inner city's problem of debt capital. The most important way to bring debt and equity investment to inner city is by engaging the private sector. A final obstacle to companies in the inner city is anti-business attitudes.

Strategizing by the government: Can industrial policy create firm‐level competitive advantage?

Abstract: Despite the prevalence of governmental action devised to foster firms and industries, the link between industrial policy (IP) and competitive advantage has received scant attention in strategic management. I propose a model where such a link is mediated by the accumulation and churning of local resources and capabilities. I also introduce the concept of support-adjusted sustainable competitive advantage (SASCA), which occurs if a firm's observed performance is superior to the expected performance of competitors had they received the same array of policies. I argue that achieving SASCA through IP is a difficult endeavor and requires the interplay of three conditions: insertion in global production networks, geographical specificity, and governmental capability. Thus, the model expands the potential determinants of competitive advantage into the context of governmental intervention.

Resource-Based View

Abstract: The resource-based view is the perspective that emphasizes the key role played by resources in capabilities in the creation of competitive advantage. The general terminology or resources, skills, competences, and capabilities have been developed into a conceptually powerful language of core competences, strategic assets, and distinctive capabilities. There is a profusion of language to describe the central concept, which essentially is the underlying capability that is the distinguishing characteristic of the organization, and there is also a need to develop the concepts further to make them more operational and more measurable. Keywords: strategic assets; core competences; distinctive capabilities; co-specialized assets; complementary assets; strategic resources

Dynamics of a policy-driven market: The co-evolution of technological innovation systems for solar photovoltaics in China and Germany

Abstract: The rise of Chinese solar energy firms has taken many experts by surprise. German policy makers and researchers alike had suggested that the country's ambitious deployment policies would translate into a competitive advantage for the German solar photovoltaics industry. This paper argues that these expectations rested on an outdated model of the international diffusion of innovation. Building on the technological innovation system (TIS) framework and the related system functions approach, the paper thus proposes a new approach for capturing the global dynamics of innovation and industrial development in emerging technology fields. Focusing on a period of dynamic growth in the field of crystalline-based PV technologies, the paper highlights how a set of dynamic and mutual inter-dependencies between an industrialized country (i.e. Germany) and an emerging economy (i.e. China) have driven the development and diffusion of technology in the field.

Necessity entrepreneurship and competitive strategy

Abstract: Many start-ups chose to compete with incumbent firms using one of two generic strategies: cost leadership or differentiation. Our study demonstrates how this choice depends on whether the start-up was founded out of necessity. Our results, based on a representative data set of 4,568 German start-ups, show that necessity entrepreneurs are more likely than other entrepreneurs to pursue a cost leadership strategy and less likely to pursue a differentiation strategy. Decomposition analyses further show that up to half of the difference in choice of strategy can be attributed to distinct endowments of human capital, socioeconomic attributes, and start-up project characteristics that correlate with necessity entrepreneurship.

Complementarities and competition: Unpacking the drivers of entrants' technology choices in the solar photovoltaic industry

Abstract: Entrants in new industries pursue distinct technologies in hopes of winning the technology competition and achieving sustainable competitive advantage. We draw on the complementary assets framework to predict entrants' technology choices in an emerging industry. Evidence from the global solar photovoltaic industry supports our arguments that entrants are more likely to choose technologies with higher technical performance and for which key complementary assets are available in the ecosystem. However, diversifying entrants are more likely to trade off superior performance for complementary asset availability whereas start-up entrants are more likely to trade off complementary asset availability for superior performance. This difference is largely due to diversifying entrants with pre-entry capabilities related to the industry. The study offers a novel illustration of how complementarities and competition shape entry strategies.

Family-driven innovation:resolving the paradox in family firms

Abstract: This article presents an integrated, contingency perspective on family firm innovation called Family-Driven Innovation (FDI). The framework highlights the need for consistency between a family firm’s strategic innovation decisions and its idiosyncrasies to achieve and sustain competitive advantage through innovation. This article also offers some directions for future research on FDI and serves as an introduction to this special section on family firms.

Servitization and Competitive Advantage: The Importance of Organizational Structure and Value Chain Position

Abstract: Servitization represents a business-model change and organizational transformation from selling goods to selling an integrated combination of goods and services. Competitive advantage is one outcome of this shift. During servitization, companies follow stages to realize services as an opportunity to differentiate from goods and achieve higher customer satisfaction. This study analyzes this transition from base, intermediate, and advanced services by presenting results from 102 senior executives in multinational companies. Our results suggest increasing interest in service-led strategies in manufacturing companies. The results also show that increasing differentiation and high customer satisfaction are fundamental to achieving competitive advantage and superior performance with services. The analysis also indicates the importance of a company’s position in the value chain and the organizational structure it selects to support services in successful servitization.