Beyond products: new strategic imperatives for developing competencies in dynamic environments

Strategy research has often taken a product-centered perspective. When firms compete in environments characterized by accelerating product life cycles, mass customization, and technological discontinuities, a product-centered perspective on strategy may help explain a firm’s current competitive advantage. However, this perspective adds little guidance in making strategies that create competitive advantage in the future. In this paper, we present a perspective in which dynamic environments require firms to focus on (1) building market-driven, technological, and integration competencies, not a stream of product improvements, and (2) decoupling these competencies from current products in order to create and exploit new opportunities. We discuss the perspective of products as a temporary integration of market and technology trajectories. Research propositions are presented and future implications are discussed.     

The keiretsu in Asia: Implications for multilevel theories of competitive advantage

Much of our understanding of competitive advantage draws upon the experience of Western firms. Massive Japanese investment in an effort to replicate keiretsu (interfirm) networks in Asia since the 1980s presents fertile grounds to shed new light on the sources of competitive advantage. Building on such an experience, this article develops a multilevel perspective focusing on how competitive advantage is preserved and strengthened for firms, networks, and nations involved. Its hallmark is careful attention to levels of analysis by (a) spelling out the attendant assumption of homogeneity among keiretsu member firms, (b) explaining the basis of such an assumption, (c) exploring alternative assumptions, and (d) drawing upon diverse subtopics within the strategy literature.     

European community developments

The drive to construct a European market free of trade barriers by 1992 is now proceeding. The article below discusses some of the challenges and opportunities which this radical opening up of the European market will present to every industrial and commercial organisation, and how to prepare for them. It goes on to outline the establishment by the EEC of new networks of information agencies and consultancy services which are intended to enable firms, particularly small firms, to obtain the fullest information and support to enable them to expand into the new European market and to take advantage of EEC loans and grants for R&D, training and other business activities. In a final section the article discusses the opportunities for managers and higher educational institutions in the COMETT and ERASMUS Programmes as they become fully operational.     

Perceived competitive influences and innovative behaviour

The article looks at how firms' perceptions of competitive influences shape their innovative behaviour as they search for strategic advantage. In this exploratory piece of research, the author shows that firms take notice of a small number of competitors only, their perceived competitive position is very different from that measured “objectively”, and that firms have programs which direct resources into innovative behaviour to meet competitive threats.¹     

Liability of foreignness and membership in a regional economic group: Analysis of the European Union

This study examines the performance of foreign vs. domestic firms in a regional economic group. In particular, we focus on host country and foreign-owned firms in the European Union. Results provide evidence of a liability of foreignness—foreign-owned firms underperform host country firms. However, there is also evidence that liability of foreignness can vary across countries, and that foreign firms can overcome the liability of foreignness in some host countries, even industrialized ones. The results show the moderating effects of the host country and home country environments on the relative performance of foreign firms. Lastly, the results reveal that foreign-owned banks from highly competitive home countries underperform foreign firms from less competitive home countries.     

Getting out of the European Paradox trap: Making European research agile and challenge driven

The ‘European Paradox’ encapsulates concerns that although European research institutions play a leading role in terms of top-level scientific output, they lag behind in their ability to convert this strength into successful innovations in the market. This paradox and the related intriguing problematic aspects of European research institutions have inspired a significant number of research papers, reports and studies by academics, innovation think tanks and the European Commission itself. In this position paper, we review the literature on the European paradox, identify gaps and contradictions in the understanding of the actual situation and discuss possible ways of moving forward towards a European research and innovation system that taps into diversity and complementarity of resources as a competitive innovation advantage.     

The role of guanxi in buyer–supplier relationships in Chinese small- and medium-sized enterprises – a resource-based perspective

This paper examines the role of guanxi (personal relationships or connections) in buyer–supplier relationships in Chinese small- and medium-sized enterprises (SMEs), through exploratory research that gained access to companies actually using guanxi. The resource-based view provided a systematic approach for analysing the role of guanxi in terms of its potential to be a source of sustained competitive advantage. Business guanxi connections were identified as possessing the potential to be considered an organisational resource. This study identified several valuable attributes of guanxi at the organisational level. However, the guanxi-based advantage can only be sustained under certain conditions. SMEs should create an organisational environment that encourages their employees to actively establish and maintain guanxi connections within the company and beyond. However, companies in China need to recognise that firms that possess superior technological skills or capabilities have a stronger bargaining power, as they are able to deliver quality at competitive prices over the long run.     

Future of European human resource management: A contingent approach

The ability to cope with an increasingly open European Market, enhanced mobility between nation states and the threat of competition from the Far East will be highly prized organisational skills in the third millenium. Many commentators have argued that ‘Europeanisation’ (broadly defined) is an irreversible process and companies will have to cope proactively with this or perish. However, in this article we argue that many of these predictions are based on an uncritical acceptance of the ‘internationalisation’ thesis, and on subjective assessments of possible future trends — rather than on sound empirical research within strong theoretical frameworks. Accordingly, this article takes a critical look at some widely-held assumptions about internationalisation, Europeanisation and the (potential) development of European Human Resource Management (EHRM). It then goes on to suggest a framework of research which will be more able to capture future developments in EHRM and thereby facilitate more robust exchanges on strategic HRM with those companies operating in a European setting.     

Knowledge Creation within Industrial Systems

Intangible resources are the source of competitive advantage in theknowledge economy. Knowledge and intellectual capital within firms havegathered worldwide attention; theories and methods for knowledgecreation management have been developed for organizations and alliances.Economic reality shows the importance of industrial districts becausesocial systems in districts provide dynamic contexts of multifacetedrelationships. These dynamic contexts or district ba (Japanesefor place) enable firms to create and harness knowledge that resides innetwork relationships.The paper develops a theoretical frame of four kinds of district ba thatsupport four knowledge processes. Organizational networks within andbetween different district ba are conceptualized. The creationof knowledge within district ba is used to analyze differentlevels of interaction between firms in the same or different districtsand in the same or different industries. The case study of the JETROlocal-to-local program between Ishikawa prefecture in Japan and Como andVarese in Italy is used to illustrate the theoretical concepts. Districtba are used to analyze the knowledge creation dynamics withinand between districts and to identify possible strategies for districtgovernance.     

From Temporary Competitive Advantage to Sustainable Competitive Advantage

Both industrial organization theory (IO) and the resource‐based view of the firm (RBV) have advanced our understanding of the antecedents of competitive advantage but few have attempted to verify the outcome variables of competitive advantage and the persistence of such outcome variables. Here by integrating both IO and RBV perspectives in the analysis of competitive advantage at the firm level, our study clarifies a conceptual distinction between two types of competitive advantage ? temporary competitive advantage and sustainable competitive advantage ? and explores how firms transform temporary competitive advantage into sustainable competitive advantage. Testing of the developed hypotheses, based on a survey of 165 firms from Taiwan's information and communication technology industry, suggests that firms with a stronger market position can only attain a better outcome of temporary competitive advantage whereas firms possessing a superior position in technological resources or capabilities can attain a better outcome of sustainable competitive advantage. More importantly, firms can leverage a temporary competitive advantage as an outcome of market position to improving their technological resource and capability position, which in turn can enhance their sustainable competitive advantage.     

Evolution of product quality in European,Japanese and US automotive firms: An exploratory longitudinal analysis

For years we have been hearing that US automobile manufacturers have been losing market share to their Japanese rivals who are reputed to make better quality vehicles. Most such reports are based on the initial quality surveys on new automobiles. In this paper we address two exploratory questions: (1) how does the quality of an automobile change with its age, and, (2) can firm level variables help explain differences quality. To answer these questions, we collected Consumer Reports’ reliability ratings on approximately 300 automobile models made by European, Japanese and US automotive firms during the 1998–2007; and approximately 240 models made by these firms over period of 2008–2015. For both periods we found that not only do automobiles made by Japanese firms have higher initial quality, but, as automobiles get older the difference in the product quality between Japanese versus European and US firms increases. We also found that the more generalist a European or US automobile firm, i.e., the wider is the firm׳s product offering in the marketplace, the lower its overall automobile quality during the 1998–2007 period. Conversely, Japanese generalist firms were found to have higher quality than specialist firms over the same period. The result is partly explained by the fact that Japanese firms have taken a different path to broadening their product variety – they have ensured a high level of quality of their initial offerings before entering newer market segments. The rate of reliability decline was found to be slower for all firms, and the differences in reliability across the 3 groups of firms were much less pronounced during the 2008–2015 period. This improvement may be as result of restructuring done by US automobile firms.     

Leveraging tacit knowledge in alliances: The importance of using relational capabilities to build and leverage relational capital

Effectively managing existing tacit knowledge stocks and transferring knowledge between partners contributes to firm capabilities that allow them to differentiate their goods and services from those of their competitors. Because it also helps them to provide greater value to customers, it contributes to the development of a competitive advantage. In highly competitive industries, firms need to focus on proactively managing their knowledge resources to ensure survival. However, the knowledge management process is at times complex especially because of the difficulty involved in conveying tacit knowledge. Due to its latent potential for enabling firms to achieve potential competitive advantage, how firms utilize and transfer stocks of tacit knowledge requires enhanced understanding. In specific, we explain how firms use relational capabilities to build relational capital with partners. In turn, relational capital facilitates the transfer of tacit knowledge between collaborating partners. We develop several propositions regarding the factors likely to influence the transfer of a firm's tacit knowledge resources in strategic alliances. The importance of social capital's relational dimension, relational capital, in this process is highlighted.     

European industrial districts: Influence of geographic concentration on performance of the firm

This paper reviews ideas and insights from recent firm strategy literature. We argue that these perspectives can be usefully extended to explain the competitive advantage of the industrial district. Most of the empirical studies seeking evidence of the competitive advantage of the industrial district consisted of case studies. This paper attempts to offer a measurement of the performance of industrial district firms on a comparative basis by using the case of the Spanish ceramic tile industry.     

Internationalizing managers: Speeding up the process

Most multinational companies agree that their managers need international expertise; but a recent survey surprisingly revealed that more than half of the large European corporations participating in the study lacked a strategy — either in writing or as a commonly articulated value — for internationalizing their managers (Price Waterhouse/Cranfield, 1991, p. 14). Not only must cutting-edge companies implement this process, but they have to find ways to speed it up to stay competitive.Brooklyn Derr and Gary Oddou report a 1991 survey conducted with 105 European multinationals employing an average of 30,000 workers each. The respondents, usually directors of human resource management and management development, identified the current strategies most frequently used to internationalize their firms, the importance assigned these strategies (not necessarily the same thing), and short-range trends. The article also explores the different challenges presented by attempting to internationalize senior managers as compared to junior managers.Expatriation/repatriation has been the traditional means of internationalizing managers, but companies are not doing a uniformly able job in preparing their managers for expatriation nor in taking advantage of their expertise after they return. In addition to making recommendations about expatriation/repatriation, the authors suggest newer, faster practices for internationalizing managers.     

EXPLORING THE LIMITS OF THE TECHNOLOGY S-CURVE. PART I: COMPONENT TECHNOLOGIES

The technology S-curve is a useful framework describing the substitution of new for old technologies at the industry level. In this paper I use information from the technological history of the disk drive industry to examine the usefulness of the S-curve framework for managers at the firm level in planning for new technology development. Because improvements in over-all disk drive product performance result from the interaction of improved component technologies and new architectural technologies, each of these must be monitored and managed. This paper focuses on component technology S-curves, and a subsequent paper, also published in this issue of the journal, examines architectural technology Scurves. Improvement in individual components followed S-curve patterns, but I show that the flattening of S-curves is a firm-specific, rather than uniform industry phenomenon. Lack of progress in conventional technologies may be the result, rather than the stimulus, of a forecast that the conventional technology is maturing, and some firms demonstrated the ability to wring far greater levels of performance from existing component technologies than other firms. Attacking entrant firms evidenced a distinct disadvantage versus incumbent firms in developing and using new component technologies. Firms pursuing aggressive Scurve switching strategies in component technology development gained no strategic advantage over firms whose strategies focused on extending the life of established component technologies.     

Labour Market Flexibility,Human Resource Management and Corporate Performance

Labour market flexibility is often portrayed as a key to the competitive success of the UK and US economies. We surveyed several hundred firms in the UK, and using the resulting data (on over 200 manufacturing firms) this paper investigates the relationships between firms’ use of flexible work practices, human resource systems and industrial relations on the one hand, and corporate performance on the other hand. The results suggest that ‘low‐road’ practices – short‐term contracts, a lack of employer commitment to job security, low levels of training and low levels of human resource sophistication – are negatively correlated with corporate performance. In contrast, it is found that ‘high‐road’ work practices –‘high commitment’ organizations or ‘transformed’ workplaces – are positively correlated with good corporate performance. It is also found that human resource management practices are more likely to contribute to competitive success where they are introduced as a comprehensive package, or ‘bundle’ of practices. Significant interaction effects between human resource systems, trade unions and flexible work practices add further support to the bundling hypothesis.     

A Competitive Model of Customization with Lead‐Time Effects

In this article, we study the competitive interactions between a firm producing standard products and a firm producing custom products. Consumers with heterogeneous preferences choose between n standard products, which may not meet their preferences exactly but are available immediately, and a custom product, available only after a certain lead time l. Standard products incur a variety cost that increases with n and custom products incur a lead time cost that is decreasing in the lead time l. We consider a two‐stage game wherein at stage 1, the standard product firm chooses the variety and the custom firm chooses the lead time and then both firms set prices simultaneously. We characterize the subgame‐perfect Nash equilibrium of the game. We find that both firms can coexist in equilibrium, either sharing the market as local monopolists or in a price‐competitive mode. The standard product firm may offer significant or minimal variety depending on the equilibrium outcome. We provide several interesting insights on the variety, lead time, and prices of the products offered and on the impact of problem parameters on the equilibrium outcomes. For instance, we show that the profit margin and price of the custom product are likely to be higher than that of standard products in equilibrium under certain conditions. Also, custom firms are more likely to survive and succeed in product markets with larger potential market sizes. Another interesting insight is that increased consumer sensitivity to product fit may result in lower lead time for the custom product.     

European competitiveness: Bargaining between boom and gloom

The newly-renamed European Union is in crisis from economic weakness and political claustrophia. Ralf Boscheck argues that, in addition to a suggested ‘New Founding Contract’, broad-based development of the EU requires that priority is given to adjusting competitive specialization and to centralizing political power. The management of internal and external bargaining is critical. per cent, and 19 per cent respectively. EUROSTAT (1994).     

制度环境、公司治理对企业竞争优势的影响研究——基于中国上市公司的经验证据

如何通过外部制度和内部制度的安排延续企业的竞争优势,是制度变迁背景下中国企业面临的核心问题.本文以2002年-2005年的中国上市公司为样本,基于国内地区差距,实证分析了制度环境和公司治理时企业竞争优势的影响.回归结果发现,政府支持市场化程度、经济法律环境水平、股权集中度、股权竞争度、董事会独立性、专业委员会设置程度以及股东参与决策程度与企业竞争优势显著正相关.研究结果表明,好的制度环境与有效的公司治理能提高企业的竞争优势;企业持续竞争优势的源泉应包含以政府为主体的宏观层次的制度竞争和以企业为主体的微观层次的公司治理竞争.     

The effects of suppliers’ trust on manufacturers’ innovation capability: an analysis of direct versus indirect relationships

The study offers an alternative explanation for the role of trust in economic exchange, answering the critical research questions of how and under what conditions suppliers’ trust affects manufacturers’ innovation capability. The study adopts a transaction value approach suggesting combining strategy and organisational economic literature to fully investigate the processes through which joint value is generated and developed by interacting partners. Using survey data from a sample of 235 supplier–manufacturer relationships, we find broad support for the model hypotheses. The results confirm the mediating role of asset specificity and knowledge sharing as procedural dimensions in the relation between suppliers’ trust and manufacturers’ innovation capability. However, the direct path between trust and innovation capability was not confirmed. The study provides theoretical and practical implications for firms seeking to translate inter-firm trust into innovation-based competitive advantage.