Firm Competencies Research Articles

Tracing competencies and product requirements in technology space: a new perspective on firm and industry evolution

Abstract This paper combines a resource-based perspective with a dynamic, evolutionary perspective to study firm and industry evolution. The technological competencies of firms and the technological requirements of products are projected onto a map of technology space where respective positions can be studied as a function of time. The potential of the developed approach is demonstrated by shedding new light on the mobile phone industry from 1993 to 2012, comparing new entrants Apple and Google with incumbents Ericsson, Motorola, Nokia, and RIM. Findings highlight the importance of firms’ abilities to orient and situate themselves in their dynamic environments and to recognize and act upon opportunities and threats that result from evolving technological supply and demand.

Effects of digital readiness on digital competence of AEC companies: a dual-stage PLS-SEM-ANN analysis

ABSTRACT To what extent does a firm’s digital readiness influence its competence in implementing digital initiatives? This study employs a deep-learning-based dual-stage approach using Partial Least Squares Structural Equation Modelling (PLS-SEM) and Artificial Neural Network (ANN) to demonstrate and quantify this relationship. Data were sourced from a questionnaire survey involving 428 architecture, engineering and construction (AEC) firms in New Zealand. The PLS-SEM analysis confirmed the positive correlation between the digital readiness of an organization and its competence towards seven types of DT, including immersive technologies, sensing technology, robotics, 3D printing, digital fabrication, artificial intelligence and big data. The ANN analysis further quantified the importance of the investigated readiness indicators in influencing digital competence. The results highlighted four most significant readiness attributes influencing the digital competence of AEC firms: (1) organizational culture, (2) perception of the leadership team, (3) hardware & software systems and (4) strategy plans. The findings can serve as a baseline for developing effective change management strategies and contribute to reducing the digital divide within AEC organizations, facilitating the effectiveness of organizational digital transformation.

Effect of social media analytics on firm performance: the moderating role of entrepreneurial orientation

PurposeThe purpose of this study was to analyze the effects of social media analytics on firm performance using a sample of small and medium enterprises (SMEs) in Thailand. This study also investigated whether entrepreneurial orientation (EO) moderated the effects of social media analytics on firm performance.Design/methodology/approachThis study used SMEs listed in the Department of Business Development of Thailand as the sampling frame. Probability sampling was used to draw the sample. A questionnaire survey was used to collect data from 334 firms. The data were analyzed using partial least squares structural equation modeling.FindingsThe results supported the positive association between social media analytics practices on firm performance. Moreover, this study found that EO moderated this association significantly. In particular, the positive association between social media analytics practices on firm performance was higher for firms that exhibit a high EO than those that exhibit a low EO. This result indicated that firms that implement social media analytics practices achieved higher performance when they exhibited a high EO.Practical implicationsSocial media data analytics should be implemented to strengthen the technological competence of firms. Moreover, firms should integrate EO practices into their implementation of social media analytics to increase their ability to generate substantial improvements in their strategic implementation, thereby enabling them to gain sustainable competitiveness in their market.Social implicationsBecause SMEs are the driving force for economic growth and development in Thailand, their ability to achieve higher performance when they effectively integrate EO practices into their implementation of social media data analytics could be beneficial for the sustainable development of Thailand, especially in the current data-driven era.Originality/valueThe result that EO moderates the effect in enhancing social media analytics practices’ influence on firm performance provides new knowledge that extends the boundary of research on this topic. The authors provided a theoretical explanation to clarify the way the implementation of social media analytics practices should be integrated with EO to increase the level of performance that firms achieve from such practices.

How knowledge-based HRM practices and market turbulence foster organizational innovation capability: a two-path mediating role of knowledge sharing

PurposeThe purpose of this paper is to investigate the mediating roles of tacit and explicit knowledge sharing (KS) in linking the relationship between knowledge-based HRM practices and innovation competence of firms. This study also explores the potential moderating role of market turbulence in fostering the influence of KS behaviors on two forms of innovation competence namely radical innovation and incremental innovation.Design/methodology/approachThe paper applied the quantitative approach and structural equation modeling to examine the correlation among the latent constructs based on the survey data collected from 293 participants in 115 firms.FindingsThe empirical findings of this study support the mediating role of KS behaviors in the relationship between knowledge-based HRM practices and aspects of innovation competence. It highlights the important role of market turbulence in stimulating the influence of KS behaviors on innovation capabilities.Research limitations/implicationsFuture research should investigate the impact of knowledge-based HRM practices on innovation capability via the mediating effects of knowledge management processes to bring better understanding of the importance of knowledge resources in organizations.Originality/valueThe paper significantly contributes to increasing knowledge and insights into the antecedent role of knowledge-based HRM practices, the mediating role of KS behaviors as well as the moderating role of market turbulence in fostering radical and incremental innovation, thereby advancing the body of comprehension of knowledge-based resources and innovation theory.

The strategic role of owners in firm growth: Contextualizing ownership competence in private firms

AbstractResearch SummaryWe integrate the emerging literature on the strategic role of firm owners in firms' value creation with Penrosean growth theory to investigate how and under what conditions two experience‐based competences among owners—matching competence and governance competence—influence firm growth. Employing a longitudinal sample of 2509 owner‐managed German firms, we find a positive relationship between owners' experience‐based competences and firm growth. Further, we find that in family firms, the positive relationship between owners' experience‐based governance competence and firm growth is weaker and that both experience‐based competences matter more in younger firms compared with older firms. Our findings make important contributions to research on strategic ownership and Penrosean growth theory.Managerial SummaryIn our study, we show that two competences of owner–managers are important for the growth of their firms: their matching competence, which is the ability to theorize about valuable resource configurations and cognitively envision a path to implement them, and their governance competence, which is the ability to create effective governance arrangements to align incentives within a firm. Our results suggest that it is challenging for owner–managers from family firms to leverage their governance competence to achieve growth, which could potentially be resolved by instituting governance mechanisms that prevent nepotism. We also show that owner–managers' competences are particularly important in the early years of their firms when no standardized processes are in place.

Sustainability, Evaluation, and Credentials

While there is clear demand for sustainability-ready evaluation in which environmental impacts are integrated, a major gap exists between this desire and reality. Stock takings show that environmental sustainability is rarely addressed by evaluations. For this to happen, a significant adaptation in how evaluation is organized and conducted is needed, and evaluators, commissioners and evaluation users must take an interest in sustainability. Competencies of individual evaluators and firms must be enhanced, but this is not sufficient. Sustainability-ready evaluation requires interdisciplinary competencies and collaboration.

Timeliness and Accuracy in Retrieving Firm Competencies: An Indexing Capability Perspective

Timeliness and Accuracy in Retrieving Firm Competencies: An Indexing Capability Perspective

Organizational Inertia, Digital Capabilities, Digital Transformation, and Firm Competencies

Research Aims: This research aims to look at the impact of organizational inertia on digital capabilities and digital transformation to optimise firm competencies. Design/Methodology/Approach: The dataset was produced through a quantitative survey of 125 Indonesian businesses using the Structural Equation Model (SEM) to analyse the data. Research Findings: The results of this study indicate that digital capabilities and digital transformation indirectly impact business competencies due to organizational inertia. While organizational inertia affects digital capabilities but not digital transformation, the latter affects both a firm's skills. Theoretical Contribution/Originality: This study contributes to the literatures on organizational behaviour and strategic management by investigating the impact of organizational inertia on the achievement of digital transformation and its impact on firm competencies. Managerial Implication in the South East Asian context: The research findings embrace digital transformation practices by enhancing firms' digital capabilities, particularly in digital transformation response, digital opportunity identification, innovative digital technology product development, acquisition, and mastery of cutting-edge digital technologies. Research Limitation & Implications: The findings of this study reflect the conditions of numerous enterprises operating in several industry sectors in Indonesia during the chaotic post-COVID-19 pandemic period. Furthermore, the survey respondents represent a diverse range of businesses at varying stages of digital transformation implementation. Keywords: Inertia, Digital Capabilities, Digital Transformation, Firm Competencies

Effects of adopting mobile technologies on the managerial competencies of construction firms

Background: The extensive utilisation of mobile technologies (MTs) for cost reduction and improving organisational efficiency is widely acknowledged in the entrepreneurship literature. Despite the fact, the effect of adopting MTs on the managerial competencies of small, micro and medium enterprises (SMMEs) remains incomprehensible by emerging construction firms (ECFs).Objectives: This study contributes to the theory and practise of competency development in project management (PM) by exploring how MT adoption intensity during project execution affects the perceived managerial competencies of owners/project managers of ECFs.Method: This quantitative study employed the perspectives of 222 ECF owners/managers surveyed in the Free State province of South Africa. It established how the adoption of MTs during project execution impacted the perceived managerial competencies of these entrepreneurs.Results: The results indicated that the adoption of MTs during project execution has a positive and significant effect on the communicative and social competencies of ECF owners and managers, with MT adoption explaining 88.0% of the variance in communicative competencies and 87.9% in social competencies. The results further demonstrate that the type of device used (laptops and tablets) moderated the strength of the MT adoption – managerial competencies relationship.Conclusion: The study recommends targeted and strategic wider rollout of specific MTs that improve managerial competencies to optimise the efficiency of project-related operations.Contribution: The article contributes to the broader PM theory and literature especially competency-based project execution by exploring how MT adoption can facilitate greater communication and social competencies that improve the organisational efficiency of ECFs.

Impact of circular economy network building: resilience strategy to climate action

PurposeThis study aims to examine how external and internal conditions drive the impact of circular economy mechanism by decomposing into three policy networks in terms of reduce, reuse and recycle, to better understand the contingency model of climate change and effect of firm size on subsequent performance.Design/methodology/approachDrawing on circular economy network and resource-based view (RBV)-network-resilience strategy framework, a pooled longitudinal cross-sectional data model is developed using a sample of 4,050 Taiwanese manufacturing multinational corporations (MNCs) making foreign direct investment between 2013 and 2018. Structural equation modeling analysis is used to comprehensively examine and investigate each circular economy policy network in the context of climate change and firm size. Post hoc multigroup analysis (MGA) is also conducted.FindingsMGA shows that the reduce policy network is positively and negatively related to manufacturing know-how and production size, respectively. The impact of reuse policy network can enhance the competence of large firms. The recycle policy network is more prominent in terms of competence enhancement of climate change.Practical implicationsMNCs are seeking to build circular economy policy networks to a greater extent, given climate change pressure and guidelines.Originality/valueThis study adds to the circular economy and RBV-network-related literature on climate change and interactions to enhance performance, echoing the recent call on the sustainability of the circular economy of MNCs.

IT vendor integration as catalyst of IT outsourcing success

PurposeThis paper aims to explain how small- and medium-sized firms (SMEs) create information technology (IT) business value through blended IT outsourcing (ITO). The explanatory framework it proposes enables SMEs to replicate IT capability outcomes (i.e. enhance their economic, strategic and technological competences, namely, ITO success) by endorsing an ITO strategy catalyzed by IT vendor integration.Design/methodology/approachThis study uses covariance-based structural equation modeling to test the proposed research model. Data are collected from 251 knowledge-intensive business SMEs located in Science and Technology Parks in Spain.FindingsThe results demonstrate empirically that SMEs can replicate IT capability benefits (i.e. enhance their non-IT competences) through blended ITO in which IT, conceptualized as a transversal supporting activity, is outsourced to an IT vendor while the value creation process remains with the buyer. The integration (i.e. process integration and information sharing) of an IT-proficient vendor catalyzes ITO success. More specifically, the results show that, although process integration is not directly related to competence enhancement, fosters information sharing, which directly facilitates ITO success. The results also show that IT vendor proficiency accounts for ex ante trust.Practical implicationsManagers should think of transformational ITO as a strategy to enhance firm competences. For blended ITO strategies to succeed, managers must have a comprehensive understanding of the business they run, as it is important to create conditions that foster inter-firm information sharing. To achieve these conditions, managers should take special care in selecting boundary spanners, who are the pivotal links in competence enhancement.Originality/valueWhile most research focuses on ongoing trust (i.e. trust develops as ITO evolves), this study focuses on initial (i.e. ex ante) trust and analyzes IT vendor proficiency (expert, experienced and reputed) to examine trust as an antecedent of ITO. This study also draws on previous conceptualizations of vendor integration to develop and analyze a two-step integration model to explain how IT vendor integration (i.e. process integration and information sharing) catalyzes enhancement of the buyer’s non-IT competences. This study focuses on SMEs, which are often neglected in ITO studies.

Impact of Globalization on Sustainable Implementation in the Construction Industry: Dynamics of Construction Tender-Price Volatility

Construction infrastructure plays a crucial role in development, bringing significant implications for resource utilization. Henceforward, specific measures for alleviating challenges associated with sustainable construction become crucial-general arguments of good industry practice. Construction-sector sustainability is increasingly important in developing countries, and threats of globalization amid construction-tender price volatility require immediate action. The purpose of this paper is threefold. The first is to investigate, through a literature review, the indicators of globalization concerning the construction sector. The second intention is to evaluate the empirical impacts of globalization on the construction sector with a focus on the derivation of construction tender-price. Thirdly, the study intends to separate the contributions of foreign direct investment (FDI) to global integration for construction sustainability. The study adopts qualitative and quantitative approaches that follow a case study and causal research design to explore and understand decisions and opportunities regarding construction-tender price inflation. The study utilizes content, thematic, and statistical methods for data analysis. The study finds that construction tender prices increased by an average of 49.7% per annum for periodic maintenance of feeder roads between 2012 and 2021, with varying correlations to globalization indicators. The research highlights notable disadvantages of foreign direct investments in the construction sector through the emergence of foreign firms in developing countries. The drawbacks include instigating unfair competition, initiating adverse knockout effects on local firms, exterminating local firms, and perpetuating corruption. In addition, the study identifies areas requiring attention to address the impacts of globalization in the construction sector. Critical areas include legislating procurement controls that protect local firms and improving the qualifications and competencies of local firms. The study further underscores mitigation measures against the adverse effects of foreign firms in the construction sector. These measures include providing training to local firms, managing the nature and type of competition, managing the nature and type of competing firms, and building the capacity of local firms.

Dynamic capabilities: Axiomatic formation of firms’ competitive competencies

The capabilities concept is critical in understanding the competitive competencies of firms. Capabilities allow firms to sense, seize and reconfigure their resources in response to opportunities and threats within their environments. This systematic review reviewed a total of 37 Scopus database-selected peer-reviewed articles on capabilities, technology, innovation, and capability frameworks. The purpose was to identify and discuss firms' capabilities and formation processes and effects on competitive advantages to generate an encompassing framework that overcomes the limited and fragmented nature of current capability frameworks. The study employed thematic content analysis and author-anchored keywords analysis which enabled the identification of several themes regarding capabilities and formation processes. The findings of the study were discussed under the following themes: technological capabilities; supply chain capabilities; networking, collaboration, interactive, coordinating, and alignment capabilities; organisational capabilities; and lastly systems capabilities. The study contributes to enlightening a body of firms' capabilities theories and generated an encompassing interactive capabilities framework to guide researchers in understanding firms' capabilities formation processes. The value of the study to the research community lies in emphasising the multi-level approach (macro; mezzo; firm level) and the virtues of combining tenets from different frameworks for a nuanced understanding of firms' capabilities development. The study will be critical in guiding firms in building their capabilities, particularly the importance of open innovation networks and collaboration in reducing innovation risks and costs. The paper is important to policy makers regarding the institutions facilitating the interaction of international, national and firms level dynamics in propping and propelling firms’ capabilities development.

An attempt to the classification of firm competences

An attempt to the classification of firm competences

Portraits of Women Founders and Leaders in the North of Portugal: Do Academic Qualifications Matter in the Cultural Patterns of Family Firms?

Abstract This paper aims to discuss continuities and ruptures carried out by women in leadership in family firms (FFs). Despite female underrepresentation on top positions in firms broadly speaking, our findings gathered from the project “Roadmap for Portuguese Family Businesses” (NORTE-02-0853-FEDER-000018) reveal an ongoing transformation regarding intergenerational management succession in family firms. In fact, while it is recognizable that micro, meso and macro-structural gender barriers remain, family businesses have been the scene of intergenerational changes with a notable presence of women in management and corporate responsibility careers. To what extent have female founders and successors expressed significant changes in the cultural patterns of family businesses, especially when they have high academic qualifications and professional experience? To answer this research question, nine in-depth, semi-structured interviews were conducted with business women/ managers of family businesses regarding their career experiences compared with those of male counterparts. This paper finds that the “masculinist” perspective is shifting due to the crucial role of the qualifications and professional competence of family firms’ female founders and leaders. Likewise, the increase in the academic level of women in today's society is one of the factors that is at the root of the emergence of shifting in the cultural patterns of family businesses with impact in the intergenerational succession. (JEL: L2)

Portraits of Women Founders and Leaders in the North of Portugal: Do Academic Qualifications Matter in the Cultural Patterns of Family Firms?

Abstract This paper aims to discuss continuities and ruptures carried out by women in leadership in family firms (FFs). Despite female underrepresentation on top positions in firms broadly speaking, our findings gathered from the project “Roadmap for Portuguese Family Businesses” (NORTE-02-0853-FEDER-000018) reveal an ongoing transformation regarding intergenerational management succession in family firms. In fact, while it is recognizable that micro, meso and macro-structural gender barriers remain, family businesses have been the scene of intergenerational changes with a notable presence of women in management and corporate responsibility careers. To what extent have female founders and successors expressed significant changes in the cultural patterns of family businesses, especially when they have high academic qualifications and professional experience? To answer this research question, nine in-depth, semi-structured interviews were conducted with business women/ managers of family businesses regarding their career experiences compared with those of male counterparts. This paper finds that the “masculinist” perspective is shifting due to the crucial role of the qualifications and professional competence of family firms’ female founders and leaders. Likewise, the increase in the academic level of women in today's society is one of the factors that is at the root of the emergence of shifting in the cultural patterns of family businesses with impact in the intergenerational succession. (JEL: L2)

Indexing Capability: Reducing the Discrepancy Between the Perceived and Actual Competencies

This article advances a theory of the firm’s indexing capability which consists of stocking capability and retrieving capability and examines its impacts on reducing the discrepancy between the perceived and actual firm competencies. During competencies’ acquisition and accumulation, the firm needs proper stocking that allows it to track what competencies it possesses and where they should be archived within the architecture of competencies. The retrieving capability concerns searching the needed competencies and assessing via the matching function their availability, suitability, and readiness for latter orchestration and deployment. The efficacies of indexing capability affect the discrepancy between the perceived competencies that the firm thinks it possesses and the actual competencies it does possess, as reflected in false-possessing or false un-possessing. We propose that the indexing capability’s impacts will be moderated by the attributes of firm competencies and the attributes of the contexts in which competencies are called for. The theoretical construct of and the framework on indexing capability advanced in this article contribute to our understanding of how stocking and retrieving matter in the overall process of a firm's management of its competencies.

Gaining legitimacy and host market acceptance: a CRM analysis for foreign subsidiaries in China

PurposeBuilding on the scant literature on how foreign subsidiaries strategize Cause-Related-Marketing (CRM) to gain legitimacy and acceptance in host markets, this paper investigated the impact of two CRM components (post-crisis recovery, CSR activities) on subsidiary performance and future opportunities in China, a country whose institutional development lags behind its economic achievements. The study also investigated the moderating effects of strategic mindset and subsidiary empowerment on CRM effects, issues highly relevant to MNCs and their subsidiaries.Design/methodology/approachTo minimize common method variance, the study adopted a multi-informant firm executive survey design that included responses from a director and a manager from 230 foreign subsidiaries operating in China. The director-level respondents assessed Firm Competences, Organizational Ties, Subsidiary Performance and Future Opportunities. The manager-level respondents assessed CSR activities (Legal, Ethical and Philanthropic CSR) and other operational measures.FindingsThe two CRM components affected Subsidiary Performance (sales, shares and profit) and Future Opportunities in different ways as postulated by legitimacy theory. While Post-crisis Recovery enhanced Subsidiary Performance (sales), it could not enhance Future Opportunities by itself unless the subsidiary received headquarters empowerment. Interestingly, only Ethical and Philanthropic CSR activities with enhancement from Strategic Mindset mattered to Future Opportunities.Originality/valueThe research unfolded key elements in how foreign subsidiaries planned CRM strategies to gain legitimacy and acceptance in a host market with less-developed institutions, thereby addressing a gap in the literature. It also showed how firms internalize CRM and became receptive to social sentiments of a significant host market.

생산-개발부서 통합과 고객만족의 관계에 관한 연구

Given that the small and medium-sized enterprises (SMEs) are working in an increasingly competitive business environment with limited resources, manufacturing flexibility can be a vital source of a competitive advantage. Thus, having strong attention to manufacturing flexibility as a good means for improving the competitiveness of SMEs in the Korean manufacturing industry, this study investigates 1) the relationship between cross-functional integration (CFI), manufacturing flexibility, and customer satisfaction and 2) the role of a cross-functional team (CFT) made up of employees from different functional departments. From a large-scale sample of 504 SME data, this study empirically confirms that a higher level of integration between manufacturing and R&D tends to improve manufacturing flexibility, which ultimately increases customer satisfaction. Moreover, even when manufacturing-R&D integration is insufficient, forming a CFT secures a high level of manufacturing flexibility, which implies that a CFT officializes the need for the concentration and orchestration of a firm's diverse competence and helps to cultivate capabilities for enhancing the organizational performance.

The Effects of Exports, FDI, and Innovation Competence on the Efficiency and Profitability of Privatized SOEs in China

Purpose – This study investigates the effects of exports, foreign direct investment (FDI), and innovation competence on the efficiency and profitability of privatized Chinese state-owned enterprises (SOEs). Design/Methodology/Approach – We apply fixed effects regressions after estimating the corporate efficiency using data envelopment analysis (DEA) methodology by industry around privatization. We use a panel dataset of Chinese listed firms from 2009 to 2017, with 10,950 year-firm data of RESSET and China Stock Market & Accounting Research (CSMAR) databases. To reflect the complicated relationships between exports, FDI, innovation competence, efficiency, and profitability of privatized firms, we apply simultaneous equations models. Findings – First, the privatization of SOEs in China improves their innovation competence, measured in the number of patents, overall corporate efficiency, and firms’ exports. Second, the innovation competence of firms improves their corporate efficiency and exporting capability, but it aggravates their profitability. Moreover, research and development (R&D) expenditures improve their innovation competence and return on assets, but these expenditures aggravate their efficiency and exports. Third, the corporate efficiency of privatized SOEs improves their profitability for 5 years after privatization, including the year. Fourth, exports have inverse U-shaped effects on efficiency and return on assets, and on their innovation competence. Fifth, overseas direct investments have inverse U-shaped effects both on innovation competence and efficiency and return on assets, whereas their effects on exports are not significant. Sixth, the positive effects of privatization on corporate profitability and such U-shaped effects of exports on corporate profitability last for one year after privatization, whereas the U-shaped effects of FDI last for 3 years. Research Implications – The privatization of Chinese SOEs has successfully improved their technological efficiency and profitability for a short time, which turns adversely afterward. The results imply that privatized firms need improvements in the efficiency of technological innovation and R&D investments for longer-term improvements in profitability and global competitiveness.