Basis For Sustainable Competitive Advantage Research Articles

Resources as the Basis for Sustainable Competitive Advantage in Social Entrepreneurial Ventures

This conceptual paper explores one possible application of the resource-based theory of the firm (RBT) to social entrepreneurial ventures (SEVs). First, the paper argues that, despite some seeming incongruities, RBT is actually an appropriate and useful lens to apply to the study of social entrepreneurship. Furthermore, the paper explores the idea that a social mission is likely to meet the criteria of being valuable, rare, inimitable, and organizationally leveraged. The social mission, and an SEV’s commitment to that mission, may be uniquely leveraged and communicated to stakeholders to build an SEV’s reputational assets. An SEV’s reputation, as a strategic resource, can thereby provide a sustainable competitive advantage, and enhance organizational performance. A model and related propositions are developed regarding these concepts.

Women’s Optimism: Role of Psychological Climate and Psychological Capital

Background: Psychological capital is considered as the basis of sustainable competitive advantage in today’s organizations and can be developed and managed with minimal costs compared to tangible assets and can lead to significant results. Objectives: This quantitative research was carried out to determine the direct and indirect impact of psychological capital on female’s organizational optimism with psychological climate acting as the meditating variable. Methods: This study was a descriptive correlational research that included 45 females, who were employed at Farhangian University between the academic year of 2016 and 2017. A sample of 45 was determined using the census method. Data were collected using a standard questionnaires, including psychological capital questionnaire, psychological climate questionnaire, and organizational optimism questionnaire. The reliability of the instruments was measured using Cronbach’s alpha, combined reliability and factor load, and the validity of the instruments was determined using a convergent and divergent validity method. Cronbach’s alpha test obtained a value of 0.98, 0.96, and 0.93. The data were analyzed by the structural equation modeling and Smart PLS2 software. Results: The results indicated that the female’s organizational optimism had a mean value of 3.46 ± 0.75. Also, on average, the participants were 35 ± 0.43 years old and had 25 ± 0.38 years of work experience. Psychological capital and female’s organizational optimism are antecedents and consequences of psychological climate among students, respectively, and psychological climate has a significant mediating role on the relationship between psychological capital and female’s organizational optimism; 53% of the total effect of female’s organizational optimism was indirectly explained by the psychological climate (P < 0.05). Conclusions: The findings suggest the need of implementing programs, which strengthen women’s psychological capital in order to improve psychological climate and achieve a greater organizational optimism.

Harnessing the frontline employee sensing of capabilities for decision support

The ability to sense developments in operational (steady-state) and dynamic (growth) capabilities provides early signals about how the firm adapts its operations to ongoing changes in the environment. Frontline employees engage in the daily transactions and sense the firm's operating conditions and ability to deal with the environment that eventually will affect performance and strategic outcomes. The environmental sensing is a central cognitive feature and constitutes an information source for operations strategy decisions. Drawing on aggregated judgmental time-series forecasting techniques, this article develops a sensing instrument an employee-sensed operational conduct (ESOC) index for updated information as an essential decision support mechanism. This sensing capacity is firm-specific and difficult to replicate once in place and thus can provide a basis for sustainable competitive advantage.

Sustainability: A Cross-industry Study

BUSINESS SCHOLARS AND INDUSTRIES HAVE advocated sustainability for over three decades, but best practices from the field have yet to be captured in a model or framework that informs practitioners of how to engage in sustainability. During the 1980s emphasis was on controlling environmental pollution, and during the 1990s the focus shifted to product stewardship and ethical consumerism (Elkington, 1994). Recently, the focus has been on developing technologies that offer positive influences on the environment (Demirel et al., 2015; Hansen et al., 2015; Toth, 2014; Wong, Nelles, Yong, and Kumar, 2014; Preston, 2001). Sustainability theory is easy to understand, but translating the concept into actionable steps and investments is challenging. This paper identifies firms that are at the forefront of sustainability, and examines common themes advocated, policies set, practices implemented, and outcomes measured for sustained performance and profitability.The World Commission on Environment and Development (WCED) (1987) defines sustainable development as the ability of the current generation to meet its needs without compromising the ability of future generations to meet theirs. We use the Dow Jones definition of sustainability: A business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments (Robecosam, 2013, p. 7). Sustainability is not a fad; it is about creating a permanent shift in the nature of business (Crews, 2010). Since the advent of the paradigm in the 1980s, during which the concern was pollution control, the private sector shifted from a narrow economic conceptualization of responsibility towards a comprehensive approach that balances economic objectives with environmental pressures and changing societal expectations (Robinson et al., 2006; Tanulku, 2014; Kirschke, 2014; Fong and Harris, 2015; Kostevsek et al., 2015). Based on the pioneer work of Stead and Stead (1992), who systematically treated the subject of sustainability with an urgent call for a new economic model, green stakeholders, and strategic positioning, we want to investigate the current landscape of sustainability in firms after more than 20 years and ask, are firms' motivations for wanting to engage in sustainability, and what elements identify, formulate, and measure sustainability?Theoretical underpinningsMajor sustainability frameworks cited commonly in the field include the ecological footprint (Rees, 1992), triple bottom line (Elkington, 1997), the Natural Step (Karl-Henrik, 2002), and Graedel and Klees' (2002) Sustainability and Resource Usage. All of these frameworks address sustainability from natural, economic, and social spheres. Stead and Stead (2014) even suggest a spiritual dimension as a basis for sustainable competitive advantage. Sustainability research into a variety of specific communities is emerging (US Fed News, 2015; Bouabid and Louis, 2015; Van Wesenbeeck et al., 2015). All sustainability frameworks provide broad guidelines for corporate policy formation, but actionable steps such as those Rowe and Bansal (2013) suggest are limited. In Rowe and Bansal's (2013) ten initiatives on helping companies become more sustainable, political agendas (e.g., national dialogue and reduced burden for sustainability reporting) are also advocated. However, several suggestions remain vague and challenging for corporate practitioners to execute (e.g., create an organizational culture that supports sustainability, prepare organizations and society to mitigate and adapt to climate change, etc.). Sustainability theories and sustainability-related studies are abundant. According to Stead and Stead (1992), several critical biophysical and socioeconomic factors for achieving sustainability include:* Creating total materials recycling* Transitioning to a sustainable worldwide energy system* Stabilizing or reducing human populations* Reconciling disparities between developed and developing nations* Creating community-based decision-making structures that allow widespread, coordinated involvement in decisions about the Earth's common resources* Changing relationships between economic and evolutionary time scalesAll of these factors are intimately connected to one another. …

Determinants of causal ambiguity and difficulty of knowledge transfer within the firm

AbstractThe knowledge-based view of the firm portrays knowledge assets as the basis of sustainable competitive advantage. However, leveraging the knowledge available to the firm is not straightforward. The transfer of best practices within the firm or the replication of a certain routine poses challenges for managers. Causal ambiguity of knowledge makes it difficult to transfer practices into other contexts within the firm. In this paper, a new framework is proposed that identifies four antecedents to causal ambiguity: complexity, tacitness, relevance to the existing knowledge base, and the locality of knowledge. The paper concludes with the implications of the framework.

A Quantitative Model of the Economic Contribution Due to Human Capital

This paper presents a way to build a conceptual framework for establishing the economic impact of human resources on projects in the product market. The starting point for this search is the rejection of the assumption of the substitutability of human capital, ingrained in nearly all discussions about the economic value of a project in the product market. The acting management team has already climbed a particular learning curve. This experience translates into a well-defined assembly of skills and know-how “honed in house” that are not marketable and that can be the basis for sustained competitive advantage. This specificity is encoded in the parameters of a function that represents the responses of the team to aspiration levels proposed by management vis-a-vis its perceptions of market conditions. How the net present value of the project depends on those parameters reflects the weight of the human resources on its value. This approach reveals that the contribution of human resources to the value of a project does not follow any simple additive rule, and that the notion of added value comes mainly from comparisons against the performance of competing management teams.

Determinants of Causal Ambiguity and Difficulty of Knowledge Transfer within the Firm

The knowledge-based view of the firm portrays knowledge assets as the basis of sustainable competitive advantage. However, leveraging the knowledge available to the firm is not straightforward. The transfer of best practices within the firm or the replication of a certain routine poses challenges for managers. Causal ambiguity of knowledge makes it difficult to transfer practices into other contexts within the firm. In this paper, a new framework is proposed that identifies four antecedents to causal ambiguity: complexity, tacitness, relevance to the existing knowledge base, and the locality of knowledge. The paper concludes with the implications of the framework.

‘Organizational learning culture’: an ingenious device for promoting firm's innovativeness

The present study focuses on the relationship between organizational learning culture (OLC) and firm's innovativeness. The area of innovation as well as organizational culture is crucial for organizations and for entrepreneurs because both provide the basis for sustainable competitive advantage and improved firm performance. The notion of OLC offers a set of customs and principles that enhances imperativeness of an organization. Information acquisition, information interpretation, and behavioral and cognitive changes (BCC) were used as elements of the organizational learning process. Constructs comprising innovativeness are innovative culture, and technical and administrative innovation (innovations). Data were collected from 50 randomly selected Pakistani organizations. The results show significant and positive relationships among all hypothesized variables except for between BCC and innovations.

Mapping competitive prediction capability: Construct conceptualization and performance payoffs

The strategy literature routinely emphasizes the importance of competitor assessment as part of strategic analysis and planning. In particular, the ability to sense and accurately predict competitors' future moves – referred to here as the competitive prediction capability – can form a basis for sustainable competitive advantage. Yet, managers are not always well-skilled at assessing competitors and often do not accurately anticipate competitors' actions. Apart from human factors that inhibit astute competitive reasoning, managers also lack the motivation to develop a competitive prediction capability because of perceived low payoffs from performing such an activity. Indeed, research has neither fully explicated the rare and difficult-to-develop nature of competitive prediction capability nor offered much empirical evidence of its rent-producing potential. Accordingly, this article conceptualizes competitive prediction as a learned, organizationally-embedded capability and empirically establishes its performance payoffs. Results from a tracking study via the Markstrat simulation show that firms that develop a competitive prediction capability achieve greater improvements in profitability and stock price performance over time. In addition, firms that employ data-driven approaches to competitor assessment make more accurate predictions than do firms that primarily rely on informal intelligence gathered from the grapevine. These findings hold important theoretical and managerial implications.

An integrated marketing capability benchmarking approach to dealer performance through parametric and nonparametric analyses

The role of marketing capabilities as a source of sustainable competitive advantage has been discussed previously in the marketing strategy field. Benchmarking, a well-known learning mechanism, is suggested as a tool to identify and improve the marketing capabilities of a firm. Despite its popularity as a theoretical concept, there is not much empirical evidence to support the view of benchmarking marketing capabilities as a route to guide managers' efforts in this direction. This paper contributes to the three perspectives in the literature that support the view that benchmarking marketing capabilities can offer a basis for sustainable competitive advantage of the firm through both a conceptual and integrated benchmarking model. They are empirically analyzed using stochastic frontier and data envelopment analysis methods based on four-year data set of forty-five dealers of a leading business-to-business supplier. The results indicate the importance of competent salespeople and building a long-term relationship in enhancing dealer performance. In addition, they reinforce a recipe of how marketing capabilities can be benchmarked to achieve sustainable competitive advantage. Discussions and implications for managers are also presented.

Assessing the Core Resources in the Environmental Management System From the Resource Perspective and the Contingency Perspective

The purpose of this paper is twofold. The first objective is to examine the core resources that make environmental management system (EMS) a potential basis of sustainable competitive advantage from the resource-based view of the firm. The second objective is to investigate the set of core resources from the contingency perspective. Particularly, experience in implementing other manufacturing systems and the stage of EMS implementation were tested as the contingency factors. The proposed model and its related hypotheses were tested using structural equation modeling on a large-scale database consisting of 1453 respondents. The results showed that it is the tacit resources within an EMS, in the form of top management team's strategic perception, cross-functional cooperation, and environmentally responsible suppliers, which help explain firmspsila operational performance. The findings provided the general principles in investment decisions of EMS. However, the results also demonstrated that the pattern of the core resources varies across firms with different experience in other manufacturing systems and at different stages of EMS implementation. As a result, there is no standard bundle of critical resources for each firm. Rather, firms need to tailor their resource investment decisions in light of these factors beyond the general principles.

The strategic role of Human Resource Development in managing core competencies

The Resource-Based View (R-BV) of strategy emphasizes the importance of core competencies as the critical basis for sustainable competitive advantage. Yet, discussions of strategy typically ignore the role of the Human Resource Development (HRD) function in core competency development and management. The literature on strategic HRD is reviewed to locate the R-BV as a basis for redefining HRD's role in organizational strategy. Three strategic roles for the HRD function in core competency management are proposed and discussed: participating in strategic planning, developing core competencies, and protecting them. Specific tasks for each role are proposed. The final section identifies needs for further research as well as the practical implications from this discussion.

Knowledge Acquisition and Learning in Dutch and Belgian SMEs:: The Role of Strategic Alliances

Knowledge-based activities are at the basis of sustainable competitive advantage in today’s economy. Resource- and knowledge-based theorists claim that firms should focus on the creation and accumulation of knowledge-based competencies in order to yield long-term survival. For SMEs, this can be a difficult task as their characteristics often hamper the leverage of the required competencies. This paper focuses on the role strategic alliances can fulfil within the knowledge acquisition and learning processes of SMEs. The empirical findings indicate that only a limited number of SMEs is involved in strategic ‘knowledge-sharing’ alliances. Several entrepreneurs do not cooperate because they fear transferring their know-how and losing their competitive advantage. However, SMEs involvement in strategic alliances resulted in improved firm performance.

The Context-Specific Nature of Competence and Corporate Development

Based on an analysis of knowledge-intensive innovations, this paper argues that much of the knowledge that provides distinctive competence for sustained competitive advantage is context specific. The development of this competence is a path-dependent process of numerous learning events in particular situations and practices. Because competence is embedded in the specific context in which it was created, it is very difficult to imitate and can become the basis for sustained competitive advantage. This represents an important opportunity for firms who have grown up in a developing country and learned how to compete successfully there. Firms from developing countries who run in packs to build and expand on their context-specific competencies can be more successful in expanding into other developing countries with similar national political institutional contexts than firms from developed countries who have not acquired this tacit knowledge of local practices.

The keys to sustainable competitive advantage: Tacit knowledge and knowledge management:

B competitive advantage is increasingly found in knowing how to do things, rather than in having special access to resources and markets, knowledge and intellectual capital have become both the primary bases of core competencies and the key to superior performance. This article explores how companies can best grow their knowledge resources to create not simply competitive advantage, but sustainable competitive advantage. In recent years, the development of “hypercompetition” and shortened product lifecycles have reduced the degree to which much special knowledge can provide companies with sustained competitive advantage. Shrinking logistical and communication costs, along with new organizational designs, have enabled multinational corporations (MNCs) to function as truly global companies, rather than as conglomerations of national ones. Global companies introduce their newest products worldwide and effectively share knowledge across country units. Fueling hypercompetition, many industries now have several MNCs competing against each other on a worldwide basis, rather than a few local companies and only one MNC competing in each market. New product innovation has become the key to competing successfully. MNCs use their deep pockets to fund research and development (R&D), and they reverse engineer each other’s products and turn to consultants to learn about best practices in their industry. Companies develop or acquire new knowledge so rapidly that having special knowledge is no longer a basis for sustainable competitive advantage. To provide sustained competitive advantage, one needs knowledge that is difficult for outsiders to copy as well as the ability to rapidly develop new knowledge. In a graphic demonstration of the transient value of much knowledge, Michael Tushman began his courses at Columbia Business School by asking what the following list of products had in common: watches, cars, cameras, color TVs, hand tools, radial tires, industrial robots, machine tools, electric motors, financial services, food processors, microwave ovens, stereo equipment, athletic equipment, computer chips, optical equipment, medical equipment, and consulting services. The answer: each of these industries was initially dominated by a company with specialized knowledge, but that company rapidly lost its lead as other companies acquired the knowledge required to compete. Also illustrating the situation, fewer than 40% of the Fortune 500 companies of 1970 still existed in their original form by 1991. In today’s environment, much of the Organizational Dynamics, Vol. 29, No. 4, pp. 164–178, 2001 ISSN 0090-2616/01/$–see frontmatter © 2001 Elsevier Science, Inc. PII S0090-2616(01)00026-2

From Security to Mobility: Generalized Investments in Human Capital and Agent Commitment

This paper considers the impacts of different investments in human capital (firm-specific versus generalized investments) on employee commitment to the firm. The resource-based literature has stressed that only firm-specific human capital is likely to generate organizational rents, since those assets are more likely to be inimitable, rare, and therefore a better basis for sustained competitive advantage. Generalized investments in human capital (i.e., investments in capabilities that people can transfer and deploy to other firms or settings) are to be avoided. However, observing lessons from the literature on psychological contracts and organizational commitment, we argue that generalized investments may have value for the firm through their effects on worker commitment to the firm. The gain in worker commitment is valuable to firms given the fragile state of the contemporary employment relation, in which the lack of job security is likely to breed diminished employee commitment. This is particularly a concern for employment relations consisting of externalized labor (i.e., contract work or selfemployed professionals operating as agents of the firm), in which agent commitment is vital but likely to be more scarce. In this paper we focus on the externalized workers (independent agents) of two insurance firms in addressing these issues. A sample of 237 agents shows support for the benefits of generalized investments on agent commitment, questioning conventional wisdom that such investments should be avoided. We also examine the impact of relation-specific investments and other key antecedents on agent commitment, concluding that a mixture of strategic investments in human capital should be considered, taking into account their impacts on the firm-worker psychological contract. We also examine the impact of agent commitment on agent performance in this context, finding committed agents do provide greater value to the insurer.

Retail Insights ‐ Spring 1998

Businesses have always competed on knowledge, whether executives explicitly have said so or not. So, what’s new? What’s new is that technology now permits us to acquire, organize, manage and leverage vast amounts of knowledge much more efficiently and purposefully than ever before, and in ways that were almost unimaginable even a decade ago. It has become increasingly clear that the ability to use knowledge more effectively than competition represents the only basis for sustained competitive advantage in today’s rapidly changing world, particularly at a time when most traditional forms of competitive advantage are soon matched or surpassed by others. Look how quickly costs and quality are equaled. Excellence in these areas is merely the price of admission to the competitive game. And the new game is technology enabled and knowledge‐driven.