Abstract
Purpose: The purpose of this study was to assess the effect of organizational capabilities on sustainable competitive advantage in audit firms using a case study of Deloitte LimitedMethodology: A descriptive research design was used. The study population was drawn from the offices at Deloitte Place on Waiyaki Way. The study conducted a census of all the 106 staff from the target population. Primary data was used and was collected using questionnaires. Quantitative data analysis conducted using SPSS. Quantitative data was analyzed using descriptive statistical methods. Correlation analysis was also conducted. The qualitative analysis was used to make conclusions on the open ended questions.Results: The study findings revealed that generally, the human resource capabilities, infrastructure and technology capabilities as well as the reputation capability of the firm could be described as average. Only the leadership capabilities were found to be above average based on the responses given. The study established that the firm had attained sustained competitive advantage mostly in the areas of brand identity and protection, organizational culture and the quality of services delivered. The study further established that HR capabilities, leadership capabilities, infrastructure and technology capabilities as well as reputation capability positively and significantly affected the level of sustainable competitive advantage at Delloite Kenya.Unique contribution to theory, practice and policy: The study recommended that the firm needed to modify and develop its existing organizational capabilities of the firm beyond the average level. The study also recommended the firm needed to increase the level of utilization of information systems in streamlining/interlinking its processes so that there was quicker and increased information sharing within the firm for efficiency and flexibility in responding to customer needs. It was further recommended that the firm’s organization constructs that is, an innovation-oriented organizational structure and an innovation friendly organizational culture be advanced to support and enhance the firm’s capabilities.
Highlights
Porter (1980) argues that competitive advantage grows fundamentally out of the value a firm is able to create for its buyers that exceed the firm’s cost of creating it
The main aim of this study was to assess the effect of organizational capabilities on sustainable competitive advantage in audit firms with a specific focus on Deloitte
It was further concluded that the organizational capabilities under the study namely HR capabilities, leadership capabilities, infrastructure and technology capabilities as well as reputation capability positively affected the level of sustainable competitive advantage at Deloitte and improvements in these areas would lead to increased sustainable competitive advantage in the firm
Summary
Porter (1980) argues that competitive advantage grows fundamentally out of the value a firm is able to create for its buyers that exceed the firm’s cost of creating it. Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors (Porter, 1985; Barney, 1991; 1995; 2001). The Resource Based View (RBV) by Barney (1984) argues that firms have resources which enable them to achieve competitive advantage and superior performance. Competitive advantage is obtained when an organization develops or acquires a set of attributes that allow it to outperform its competitors (Wang, 2014). Resource-based view (RBV) posits that tangible organizational resources are vital for superior business performance and sustainable competitive advantage (Galbreath, 2014; Fahy, 2012). Lippman and Rumelt (2013) asserted that firms' financial or physical assets can generate high value for competitive advantage with minimal threat from replication. Firms should focus on identifying and exploiting resources to neutralize threats (Fahy, 2012; Galbreath, 2014; Lippman & Rumelt, 2013; Wang, 2014)
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