Firm-level Competitive Advantage Research Articles

Resources, capabilities and competencies: a review of empirical hospitality and tourism research founded on the resource-based view of the firm

PurposeThis paper reviews the past 20 years of empirical research, based on the resource-based view (RBV) of the firm, in hospitality and tourism literature. There has been a significant increase in empirical RBV-grounded management research throughout the 2000s. However, to date, there has been no systematic assessment of the RBV in both qualitative and quantitative empirical hospitality and tourism literature. The purpose of the present paper, therefore, is to review and analyse the approaches employed in empirical hospitality and tourism research founded on the RBV, provide an overview and suggest how to further advance the RBV as a framework for future research.Design/methodology/approachThe present study systematically reviews empirical RBV-based hospitality and tourism studies, published between 2000 and 2019. Through a well-defined and replicable inclusion/exclusion criterion, a sample of 122 studies was identified and reviewed.FindingsIt was found that while the RBV has received support in both quantitative and qualitative studies, the way in which researchers have utilised it in quantitative and qualitative research varies considerably in terms of the types of resource examined, the measurement variables used and the terminology/theoretical sub-stream employed. To increase the effectiveness of the RBV as a theoretical foundation in future research, its application needs to become more consistent across different studies, allowing for the development of a unified theory. Several shortcomings of the extant literature are identified, including the practical utility of the RBV; the tautology inherent in RBV-based research; the limited amount of qualitative research and the limited focus on industry contexts other than hotels, not to mention the current abundance of research with a Western perspective. These shortcomings lead to the suggestions for future research.Research limitations/implicationsThe implications raised in the present study are, firstly, the current body of hospitality and tourism literature founded on the RBV is lacking in certain areas, which highlights the need for further research. Secondly, the confusion arising from its tautologies have negatively impacted the usefulness of the RBV for researchers and practitioners alike. Finally, focusing on lower than firm-level competitive advantage will allow researchers to provide more meaningful recommendation to practitioners.Originality/valueThis is the first systematic review of both qualitative and quantitative hospitality and tourism research founded on the RBV. It provides an overview of this theory, with the aim of highlighting what has already been explored while aiding the further development of the theory in hospitality and tourism research.

Industrial targeting and firm performance: An integrated approach to industry selection

Historical accounts suggest that industrial policies have been beneficial to many countries at all levels of development. This has stimulated debates in the fields of industrial policy and strategic management regarding the rationale for industrial policy and the relationship between the industrial policy and firm-level competitive advantage. However, little research has explored the issues of industry target selection. How to reasonably select target industries for industrial policy ex ante remains a quandary for policymakers and scholars. This study fills this research gap. The authors construct an integrated approach incorporating the panel unit-root method to help governments select target industries ex ante and propose that the larger the persistence of firms’ abnormal returns, the larger the industrial policy effects and the backward linkage effects. The study uses the Taiwanese automobile industry as a case study to further justify the proposed approach. The theoretical framework and empirical findings broaden the industrial targeting literature.

Non-Patent Intellectual Property Protection, Human Capital, and Technological Competition

Non-patent mechanisms for the protection of intellectual property, such as trade secrets, are increasing in relevance for technological innovation and firm-level competitive advantage. As the pace of technological change continues to intensify globally, and as knowledge-based resources are increasingly central to competitive advantage, effectively managing knowledge and information against the backdrop of a mobile human capital base is a critical strategic concern for firms. In this symposium we will assemble a group of leading scholars to showcase recent work on this issue, and to discuss future directions for research on this important topic. Given that issues of non-patent intellectual property protection are closely intertwined with competitive advantage and technological innovation, this symposium will be of strong relevance and interest to the membership base of both the Strategic Management (STR) and Technology and Innovation Management (TIM) divisions of the Academy of Management. Beyond Patents: Comprehensive Approaches to Protecting Valuable Knowledge Presenter: Natarajan Balasubramanian; Syracuse U. Presenter: Martin Ganco; Wisconsin School of Business Presenter: Evan Penniman Starr; U. of Maryland, College Park Trade Secrets and Entrepreneur-Incumbent Collaborations Presenter: Vikas A. Aggarwal; INSEAD Presenter: Jaeho Kim; Harvard Business School Presenter: Andy Wu; Harvard Business School Trade Secrecy, Transportation Networks, and Innovation Presenter: Andrea Contigiani; The Ohio State U. Fisher College of Business Presenter: Marco Testoni; Tilburg U. Entrepreneurship and Inequality: The Role of Incumbent Firms Presenter: Francesco Castellaneta; SKEMA Business School Presenter: Raffaele Conti; Catolica Lisbon School of Business and Economics Presenter: Aleksandra Joanna Kacperczyk; -

Why university matters: the impact of university resources on foreign workers’ human and social capital accumulation

Over the last decade, many Asian countries have increasingly relied on the employment of foreign workers to solve domestic labor shortages. This has stimulated debate in the fields of economics and strategic management about the relationship between the recruitment of foreign workers and national and firm-level competitive advantage. However, little research has explored the effects of the host government’s industrial policy on foreign worker s’ human and social capital accumulation and the potential benefits to both firms and the host country. The current study helps fill this knowledge gap. The authors build an exogenous growth model and develop several propositions to derive a theory of accumulation of foreign workers’ human and social capital that promotes host country and firm-level competitive advantages. The current study uses data collected from a sample at the Philippine Learning Commons at the National University of Kaohsiung in Taiwan to test the propositions in an applied setting. The theoretical framework and empirical findings help broaden theories of migration and strategic management.

Industrial policy, social capital, human capital, and firm-level competitive advantage

Despite the popularity of governmental action devised to foster firm performance, the link between industrial policy and firm-specific human capital and social capital has received scant attention in the strategic management literature. In this paper, we build a dynamic optimization model which bridges concepts from industrial policy, social capital, human capital, and firm-level competitive advantage. We derive theoretical and policy implications from our competitiveness model, concluding that it increases in the opportunity cost of social capital reduce the production of human capital, so the optimal opportunity cost of social capital under feasible industrial policy should be set equal to zero. A government’s optimal industrial policy to help accumulate and churn human capital should reduce the opportunity cost of social capital to zero and reduce the probability of human capital leaving the community to zero. Thus, the model not only expands the potential determinants of competitive advantage in the context of governmental intervention, but also broadens the human capital theory and social capital theory in the creation of firm-specific human capital.

An exploration of contemporary organizational artifacts and routines in a sustainable excellence context

PurposeOrganizations and their members operate in increasingly complex, dynamic and even disruptive environments, with risk and uncertainty being major challenges. To that effect, data, information, knowledge, and respective competences are increasingly instrumental in enabling and sustaining organizational intelligence that translates into resilience in the shorter and sustainable excellence in the longer term. Therefore, the purpose of this paper is to explore the role of the artifacts and routines in a sustainable organizational excellence context.Design/methodology/approachAn extensive literature review was used to develop the context of the paper, focusing on big data and organizational intelligence for enterprise excellence and resilience. In addition, a thematic literature review method was used to study the role and impacts of routines and artifacts in organizational change, policies, structure and performance.FindingsAlthough many traditional management practices retain their validity, knowledge management must give a clearer view of the existing connection between firm-level competitive advantage in open economies flows and difficult-to-use knowledge assets. The proposed framework studies knowledge exploration and knowledge exploitation as organizational phenomena opposed and mutually incompatible.Originality/valueThe paper presents a first attempt to study the linkages of organizational routines and artifacts as a cycle wherein knowledge acquisition and learning competencies form and enhance a firm’s organizational intelligence, leading to robust competitiveness and sustainable entrepreneurship.

Effects of Policy on Competition in Telecom Equipment Markets: Insights from a Multi-Level Multi-Method Study

Telecom network equipment markets continue to play a significant role in shaping the global information and communications system. At one level, network equipment influences network performance attributes and has direct bearings on the dynamics of innovation at higher layers of the Internet ecosystem. More strategically, participating in network equipment markets is of vital importance for nations in the present era when the openness of the Internet is challenged by actions of many stakeholders. During the past decade, momentum in global equipment markets has shifted from established players such as Ericsson, Nokia Siemens, Alcatel-Lucent and Cisco to emerging firms such as Huawei. Consolidation and takeovers have strongly affected the number of North American network equipment suppliers and raised the question of whether and how public policy could contribute to preventing further decline.Determining how policy choices affect firm-level competitive advantage in the oligopolistic telecom equipment markets is a complex task. Three major challenges need to be overcome that no single method of analysis can handle well. First, the telecom equipment sector is inherently dynamic with ever-changing technology and market dynamics. Second, data documenting the industry and its main players are heterogeneous, of non-uniform quality, and need to be dealt with at different levels of aggregation (firms, nations) simultaneously. Third, due to endogenous and independent decisions at multiple levels (firms, nations), the determination of future scenarios is enormously difficult. Thus, there is a lack of understanding and of strong inference about whether and how public policies, – including measures affecting research and development (RD 2G, 3G, LTE; and optical networks. Data for these analyses were collected from several sources, including Infonetics, Ovum, and public sector databases. We used several econometric techniques including machine-learning approaches to overcome the challenges of heterogeneous data. We then took the findings of these models to build dynamic simulation models of competition that allow us to relax the constraints of the empirical analysis based on historical data, and study the effects of various policy decisions on outcomes such as market shares and revenues. Our analysis illuminates four sets of lessons: First, we demonstrate the limitations of the available data and its implications for what we can and cannot learn about telecom market even after comprehensive modeling efforts. Second, we discuss how competition has changed in the telecom equipment markets over time and how, despite it being an oligopolistic and overall a fairly stable market, certain firms have exploited competitive advantage by sustained commitment to RD Europe, Middle East, and Africa; Central and Latin America, and Asia Pacific.

Firm Level Competitive Advantage in the Agricultural Sector: A Research Agenda

Improvements in technology and information systems as well as changes in climate and economies have resulted in an increasingly competitive environment for the agribusiness sector. A better understanding of firm level competitiveness of this sector hence provides the necessary framework for agribusiness firms to compete at domestic and global markets. Although prior studies have proposed many frameworks to illustrate competitive advantage at the firm level, their practicability remains a concern. This study provides a critical review of the available frameworks and constructs a new one for the agricultural sector. A research model along with its theoretical and managerial implications is presented. Besides proposing a methodology for future studies, this study also serves to guide practitioners to decide on the key factors to consider when assessing the competitive advantage of agribusiness firms.

Evaluating and developing resource-based operations strategy for competitive advantage: an exploratory study of Finnish high-tech manufacturing industries

Firms are struggling to achieve and maintain the competitive advantage in today’s turbulent business environment. How can we evaluate and (re)develop strategic initiatives that put into place operational capabilities to provide new sources of firm-level competitive advantage? This paper tries to explore the practical intersection of operations management and strategy from resource-based view by evaluating and developing the sustainability level of operational competitive advantage, that how well the resource-based strategy can support its operations. It develops a theoretical approach to integrate the core factors, which determine operational competitiveness performance – manufacturing strategy and its supporting resource allocation, into conceptual analytical models. The models utilise sense and respond (S&R) methodology for dynamic decision-making to detect and adjust resource allocation and in turn optimise the resource-based strategy in order to develop the operational competitive advantage in a sustainable manner. Eighteen case companies in Finnish high-tech manufacturing industries are selected for in-depth study and analysis with proposed models to conclude how the optimal adjustments of resource-based strategy by supporting its operations can lead to sustainable competitive advantage (SCA). Constantly optimising resource allocation aligning with resource-based operations strategy supported by the S&R idea of agile strategy implementations is proposed as the unique SCA.

The right speed and its value

Slow investments cause substantial revenue losses, yet acceleration increases costs. This tradeoff implies that an optimal investment speed usually exists; it is faster the higher a firm's intrinsic speed capability. We hypothesize that it is a firm's intrinsic speed capability, rather than its speed relative to industry competitors per se, that boosts firm value. Using data on oil and gas facilities (1996�2005), we find that intrinsic speed capabilities augment firm value in a varied way: their value is larger with better corporate governance, lower cost of capital, and higher ability to draw value from R&D investment. Our work elevates the discussion of speed from a project-level consideration to a firm-level competitive advantage issue and raises the need to further explore its strategic value.

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

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. Copyright © 2013 John Wiley & Sons, Ltd.

The Future of Stakeholder Management Theory: A Temporal Perspective

We propose adding a temporal dimension to stakeholder management theory, and assess the implications thereof for firm-level competitive advantage. We argue that a firm’s competitive advantage fundamentally depends on its capacity for stakeholder management related, transformational adaptation over time. Our new temporal stakeholder management approach builds upon insights from both the resource-based view (RBV) in strategic management and institutional theory. Stakeholder agendas and their relative salience to the firm evolve over time, a phenomenon well understood in the literature, and requiring what we call level 1 adaptation. However, the dominant direction of stakeholder pressures can also change, namely, from supporting resource heterogeneity at the firm level to fostering industry homogeneity, and vice versa. When dominant stakeholder pressures shift from supporting heterogeneity towards stimulating homogeneity in industry, the firm must engage in level 2 or transformational adaptation. Stakeholders typically provide valuable resources to the firm in an early stage. Without these resources, which foster heterogeneity (in line with RBV thinking), the firm would not exist. At a later stage, stakeholders also contribute to inter-firm homogeneity via isomorphism pressures (in line with institutional theory thinking). Adding a temporal dimension to stakeholder management theory has far reaching implications for this theory’s practical relevance to senior level management in business.

Knowledge Stickiness, Knowledge Management and their Impact on Firm Level Competitive Advantage

This paper explores the areas of Knowledge Stickiness and Knowledge Management. In doing so, it develops a set of propositions for considering the Stickiness of Knowledge as a construct to be used to understand the impact of knowledge management strategies and fi rm-level performance within a given industry. The result of this work builds on previous work in knowledge management and business strategy thus providing a research stream that looks at the relationship between a fi rm’s knowledge management strategy and how the fi rm views its boundaries with other fi rms in the industry. Keywords: Knowledge management, sticky knowledge, competitive advantage, tacit knowledge, explicit knowledge.

Reputation as a Driver in Activity Level Analysis: Reputation and Competitive Advantage in Knowledge Intensive Firms

Porter's (1985, 1998) activity level analysis tool, the value chain, is widely cited by academics, taught in classrooms, and applied by practitioners. Porter (1985, 1991) claims that drivers within the value chain are central to gaining firm-level competitive advantage; however, he does not consider reputation as a driver. This paper seeks to reconcile Porter's view of reputation with the literature on competitive advantage in knowledge intensive firms. We argue that reputation meets the criteria to be labelled a driver of knowledge intensive firms as it is a relative and relational property of the firm's activity set, impacts the firm's competitive position, and is indirectly controllable by management. The paper concludes by discussing potential implications of labelling reputation as a key driver of knowledge intensive firms.

Looking beyond resources: Exploring the importance of entrepreneurship to firm-level competitive advantage in technologically intensive industries

The resource-based view of the firm (RBV) suggests that in order to attain and sustain a competitive advantage firms must possess and exploit valuable, rare, inimitable, and non-substitutable resources. Despite the focus on exploitation, empirical work in this area has focused primarily on resource possession. By infusing this traditional view of the RBV with ideas from the dynamic capabilities approach and the entrepreneurship literature, this paper presents conceptual arguments about the exploitation of resources through the development of specific capabilities. The empirical results suggest that entrepreneurial capacity and entrepreneurial management are important capabilities that help in building competitive advantage for firms in technologically intensive industries.

University–incubator firm knowledge flows: assessing their impact on incubator firm performance

Technology incubators are university-based technology initiatives that should facilitate knowledge flows from the university to the incubator firms. We thus investigate the research question of how knowledge actually flows from universities to incubator firms. Moreover, we assess the effect of these knowledge flows on incubator firm-level differential performance. Based on the resource-based view of the firm and the absorptive capacity construct, we advance the overarching hypothesis that knowledge flows should enhance incubator firm performance. Drawing on longitudinal and fine-grained firm-level data of 79 technology ventures incubated between 1998 and 2003 at the Advanced Technology Development Center, a technology incubator sponsored by the Georgia Institute of Technology, we find some support for knowledge flows from universities to incubator firms. Our evidence suggests that incubator firms’ absorptive capacity is an important factor when transforming university knowledge into firm-level competitive advantage.

Research Directions for Knowledge Management

The emerging interest in knowledge management requires, and will probably receive, considerable scholarly inquiry. As research advances, it ought to be especially sensitive to preserving, and building upon, the already significant literatures on the management of technology, entrepreneurship, innovation, and business strategy. There are several research issues that are particularly salient and warrant special attention. Researchers need to: assemble evidence to test the proposition that firm-level competitive advantage in open economies flows fundamentally from difficult to replicate knowledge assets; make greater effort to quantify the value of intangible assets; understand generic inputs, idiosyncratic inputs, and profitability; and explore the importance of entrepreneurial versus administrative capabilities.

Capturing Value from Knowledge Assets: The New Economy, Markets for Know-How, and Intangible Assets

The increasing liberalization of markets coupled with the creation of new markets for intermediate products is stripping firm-level competitive advantage back to its fundamental core: difficult to create and difficult to imitate intangible assets. This article explores these developments and elucidates implications for the management of intellectual capital inside firms.

THE DYNAMICS OF THE LIABILITY OF FOREIGNNESS: A GLOBAL STUDY OF SURVIVAL IN FINANCIAL SERVICES

We study the impact of ‘foreignness’ on survival in interbank currency trading worldwide over the period 1974–93. In particular, we develop hypotheses on the behavior of the liability of foreignness over time, and on the consequences of evolving sources of firm-level competitive advantage on this liability. We test these hypotheses on the population of 2667 market-making trading rooms located in 47 countries worldwide that either existed in 1974 or entered the industry between 1974 and 1993. The results show that there is a liability of foreignness, and that it changes over time. Further, strategic and organizational factors such as the adoption of technology by these firms and their mode of internal control significantly influenced survival, as did location-related factors such as the intensity of local and foreign competition. © 1997 by John Wiley & Sons, Ltd.