Firm-specific Competencies Research Articles

Cultural dynamics in business streamlining: A comprehensive investigation into the impact of cross-cultural management on the streamlining of outsourced business processes

Outsourcing has, over the years, become one best strategic tool for increasing efficiency and competitiveness in the international business environment. However, as it relates to the perspective of enhancing business achievement through cultural factors, cost reduction, and focus on firm-specific competencies, contextual factors still control the effectiveness of outsourced business processes. In this essay, cultural management is set as the cornerstone or the key to dealing with issues in cross-cultural communication, decision-making, and cooperation. Using data from industry sources, including Deloitte and SHRM, the paper establishes the consequences of cross-cultural disparities on project delivery and company profitability as the key areas of interest. These frameworks consist of Hofstede’s Cultural Dimensions, Trompenaars’ Model, and GLOBE Study which give essential knowledge on how management can enhance an organization’s cultural diversity. This paper shows that cultural management is becoming increasingly critical at a time when companies need to manage diverse teams and develop sustainable cooperation strategies. The focus of the analysis is on the prevention and utilization of cultural differences to enhance negative factors and operational results. Thus, filling the gaps in the existing literature, this study provides practical recommendations and theoretical frameworks that businesses may use to enhance the effectiveness of outsourced activities and develop long-term success across the increasingly interconnected global marketplace.

General Human Capital, Mobility Concerns and the Moderating Role of Firm-Specific Competences

General Human Capital, Mobility Concerns and the Moderating Role of Firm-Specific Competences

Institutional environment, competencies and firm export performance: A study of the emerging country

The study is an attempt to examine the determinants and impact of export propensity and export intensity for firm-level performance in India. The factors determining export propensity are political stability, corruption, and competition from the informal sector while the determinants of export intensity in the present study are identified as a skill of the labour force, the technological capability of a firm, and foreign ownership of technology in a firm in India. A two-stage Heckman selection model has been advanced to investigate the linkage between the export performance of Indian firms with the home institutional environment and firm competencies. Firm-level data of approximately 8,000 Indian firms are used as available from the World Bank’s Enterprise Surveys (WBES) database. The results indicate that political stability and competition effect export propensity of Indian firms while export intensity is impacted by access to technology and employing skilled labour. The study has important theoretical implications in terms of understanding the exporting behaviour of firms. It indicates that the decision of firms to export and their export performance are interlinked. It is affirmed that export intensity is dependent on firm-specific competencies while institutions indirectly influence the decision of firms to export. The policy measures of Skill India and Make in India strongly favour increased access to the skilled labour force and strengthening the domestic industry which may lead to an increase in the export intensity of Indian firms. The recent institutional measures adopted favour a stable environment of doing business as well as providing firms opportunities to focus and leverage their competencies in the best possible manner. The current nascent steps of policy reforms need to be aggressively implemented for enhanced export capabilities of Indian firms

R&D Employee Training, the Stock of Technological Knowledge, and R&D productivity

This paper investigates the conditioning role of R&D employee training on the effect of the stock of technological knowledge on firm R&D productivity. We suggest that R&D employee training enhances firm-specific technological competence, thereby enabling the firm to better utilize the stock of technological knowledge as a source of technological opportunities. Specifically, while a trap of path dependency may hamper the proper utilization of the firm-specific stock of technological knowledge, R&D employee training reinforces the standing-on-the-shoulders effect of the stock of technological knowledge, thereby offsetting, at least partially, its fishing-out effect due to depleting technological opportunities. Using panel data of Korean manufacturing firms, we show R&D employee training positively moderates the effect of the stock of technological knowledge on firm R&D productivity. Furthermore, we suggest several factors that influence the positive moderating effect of R&D employee training such as the degree of knowledge sharing among R&D employees within each firm, the strength of industry R&D appropriability, and the intensity of industry R&D.

Impact of outward FDI on home country exports

PurposeThe relationship of outward foreign direct investment (OFDI) with home country's exports has significant implications for policymakers as well as business managers of MNEs. Since BRICS nations have emerged as important sources as well as destinations of FDI, this paper aims to study the impact of OFDI from these countries on home country exports by using panel data for BRICS for time period 1993–2015.Design/methodology/approachThe author use panel unit root tests, panel cointegration, VECM and causality tests in the study.FindingsThe results reveal that OFDI has a negative and significant impact on home country exports indicating that outward FDI is a substitute for exports in these countries. It also indicates long-run causality from exports towards OFDI. There is no long-run causality running from OFDI to exports, suggesting that MNEs do not “connect” with home economies' firms through forward and backward linkages in value chain.Practical implicationsFrom the point of view of policymakers, it implies a net outflow of capital as the outflow of foreign investment would not be matched by any incremental export earnings since exports are getting substituted by production abroad. For business managers, it is indicative of a growing foreign market that warrants large scale production and justifies the high cost and risk involved in FDI as a mode of entry compared to exports.Originality/valueTo the best of authors' knowledge, this is the first attempt to deal with the relationship between home country exports and OFDI, for an important group of emerging market economies, i.e. BRICS. The understanding of this relationship allow us to identify whether factors contributing to OFDI from emerging economies are “tied” to their home economies thereby making exports necessary or are rather based on firm specific competencies which are leveraged in different locations to cater to expanding markets.

Emergence of Business Ecosystems by Transformation of Platforms Through the Process of Organizational Learning

Innovation of products and services is a key success factor for the manufacturing industry. Development of upgraded and innovative products and services usually takes place in partnerships. In this regard, in the manufacturing industry, original equipment manufacturers (OEMs) distribute the development of new and innovative products to many different locations in various countries across the world. Suppliers, especially first-tier suppliers (FTSs), are then involved in the development of new products and services based on strategic firm-specific competences. The OEM–supplier relationship is characterized by a sequential interaction whereby OEMs specify product and production requirements to the suppliers and the suppliers then produce and deliver products or services to OEMs. Tight collaboration between FTSs and OEMs is essential to reduce costs and risks, anticipate potential downstream errors and enable fruitful implementation of FTSs’ knowledge and competencies. The paper presents recent developments in the OEM–FTS supply chain management with particular emphasis on the design of shared platforms which emerge as ecosystems on the basis of the joint organizational learning and stakeholder management. Development of such ecosystems could be viewed as a transdisciplinary process, combining expertise from various fields ranging from engineering, especially IT engineering, to management, especially supply chain, strategic and knowledge management.

The role of enterprise social networking in the measurement and management of competences

PurposeThe purpose of the paper is to examine how enterprise social networking (ESN) measures and manages competences and the impact of this on the development of a holistic performance management and measurement system (PMMS).Design/methodology/approachA multiple-case methodology was used to carry out a qualitative meta-analysis on published case studies from 32 multinational companies.FindingsIt was found that the use of ESN was supportive in the development of a holistic PMMS based on high maturity in performance measurement and democratic and participative approach in performance management.Practical implicationsThe study shows ways in which ESN implementation can be used in PMMS to transform individual competences into firm-specific competences, thus improving outcomes for the success of a business.Social implicationsThis study shows that ESN can be of value to the workforce in social terms by giving them an outlet for self-expression to promote their well-being.Originality/valueThis paper shows originality, in that it contributes to the research in support of the role of ESN in performance management and measurement and the effective inclusion of competences in a holistic PMMS.

Measurement and management of competences by enterprise social networking

PurposeLiterature describes the transformation process of employees’ individual competences into firm-specific competences as a great challenge in the performance management and management field. Recently, to favor the transformation of competences, some companies have adopted enterprise social networking (ESN). However, not enough studies support the understanding of its role in performance management and measurement and scant attention is given to the inclusion of competences in a holistic performance measurement and management system (PMMS). To help close this gap, the purpose of this paper is to develop knowledge on the role of ESN in measurement and management of competences to favor the development of a holistic PMMS.Design/methodology/approachThe research adopts a multiple case study methodology using a qualitative meta-analysis. It investigates 32 multinational companies by case studies available in the scientific literature.FindingsThe results highlight the use of ESN as a relevant support for the development of a holistic PMMS based on a high maturity in performance measurement and a democratic and participative approach in performance management. ESN provides real-time data collection, analysis and reports that encourage a democratic and participative performance management. It facilitates relationships, knowledge sharing and favors a high maturity performance measurement.Originality/valueThe paper provides implications for theory, practice and society. First, the paper rationalizes the impact of ESN usage on performance measurement and management. Second, it offers new knowledge supporting practitioners in the development of holistic PMMS. Third, it highlights that ESN favors people in self-expression of own capacity, sharing artwork and knowledge on specific topics.

Export strategy, export intensity and learning: Integrating the resource perspective and institutional perspective

Export intensity (EI) has been widely examined as a performance outcome of exporting firms. To date, studies on the determinants of EI have generated mixed and even contradictory results. To reconcile such inconsistencies, this study dichotomizes export strategy in emerging economies into two distinctive types, expansion-oriented vs. escape-oriented, with the former inspired by exploiting firm-specific competencies as portrayed by the RBV and the latter motivated by avoiding the domestic institutional deficiencies as informed by the institutional perspective. Different from prior findings in the International Business literature, this research finds that a firm’s extremely high EI might not result from their superior competencies. Instead, high EI firms might focus on export mainly for the purpose of escaping from their home country’s deficient institutional environment that places extra burdens in terms of costs of doing business. Such escape-oriented exporters are more sensitive and responsive to changes in the environment while they do not enhance their learning as much as those expansion-oriented exporters. Furthermore, institutional environment has heterogeneous impacts on firms with different ownership types. Our study helps integrate the insights from both the RBV and the institutional perspective, and our dichotomization of export strategy adds precision and sophistication to the understanding of EI and export performance. Our hypotheses are supported by an empirical study based on a sample of exporting firms in China between 1998 and 2007.

Introducing the T-shaped model of cluster competence – an integrative framework and first empirical evidence from the German craftsmen sector

Although cluster research has been an enormously vivid field in the past years, the idea that firms’ individual competences influence the knowledge gain from collocation is still under-researched. In this paper, we aim to fill this gap in two steps. First, we derive four firm-specific cluster competences from existing literature as key components of a T-shaped model which is based on the resource and the relational view on knowledge spillovers. Second, we evaluate the explanatory power of our model in terms of firm success by conducting empirical testing on the basis of several logistic regressions in the form of proportional odds models. For this purpose, we use a hitherto unexploited firm-level data set, gained from a survey conducted among small and medium-sized craft businesses in Germany. The results provide evidence that idiosyncratic cluster competences on the firm level are supportive of firm success in business clusters.

Organising the Training Process in Polish Companies Operating on International Markets

Training programmes enable employees to develop general and firm-specific competences. In companies that operate on international markets, such programmes also provide the transfer of best practices, routines and procedures between the parent firm and subsidiary. Given the importance of human capital in building sustainable competitive advantage, the training process should be professionally designed and executed. Operating on the domestic market makes it easier to properly design and execute training than it is for companies entering foreign markets. The article presents the results of research that sought to verify the professionalisation of training in 50 Polish companies entering foreign markets. General guidelines for how the process should be executed and the People Capability Maturity Model were used to evaluate the training.

Self-initiated expatriates: an alternative to company-assigned expatriates?

Purpose – The purpose of this paper is to examine scholars’ proposal that self-initiated expatriates (SIEs) can provide an alternative to company-assigned expatriates (CAEs) for filling key positions in foreign subsidiaries at a lower cost. Design/methodology/approach – Underpinned by findings from empirical studies, this conceptual paper compares SIEs with CAEs and their traditional alternative, multinational corporation (MNC) local employees, to examine the suitability of SIEs as a replacement for CAEs. Findings – SIEs are likely not a suitable alternative to CAEs for purposes of control, transfer, running the foreign operation and management development (purposes requiring firm-specific competencies), but are likely suitable for filling technical and lower and middle management positions (requiring more generic, specialist competencies) and purposes of managing within the subsidiary and responding to the local environment (purposes requiring cross-cultural and host location-specific competencies). Prac...

Technological regimes and the persistence of first-mover advantages

This article investigates first-mover and early-entrant advantages in terms of market share and its growth by analyzing a unique panel data set of Korean manufacturing firms. Specifically, this article examines the existence and persistence of first-mover and early-entrant advantages across different technological regimes. We find that these advantages are influenced by characteristics of the firms, as well as, of the technological regimes under which they operate. In general, early entry into a market benefits a firm in terms of the size and growth rate of its market share. Early entrants, including first movers, have higher market shares, except in regimes with high technological opportunity and low R&D appropriability. However, first movers are disadvantaged in terms of market share growth, except in regimes with low technological opportunities and high R&D appropriability. We also find that firm-specific competences in R&D and advertising help to maintain (attenuate) first-mover and early-entrant advantages (disadvantages).

Drivers of internationalisation of companies from emerging economies: comparing Petrobras (Brazil) and PDVSA (Venezuela)

The history of the global oil industry is essential to understand the rise of multinational enterprises. Petrobras, in particular, has started to exploit in international markets the world-class technology it developed to exploit deepwater oil fields. PDVSA, on the other hand, has focused its international expansion strategy in building a network of refineries in key consuming markets. This paper examines the cases of Petrobras and PDVSA. The Petrobras experience confirms that the rise of emerging economies is leading to a transformation in global business in which foreign direct investment is driven not only by the exploitation of traditional firm-specific competencies, but also by the exploration of new patterns of organisational innovation. PDVSA's case illustrates that for a developing country multinational, the path towards decision-making autonomy from government is mired with many obstacles; key commercial strategies can be challenged by a government seeking to impose its agenda on the company.

Inter-industry differences in profitability: the legacy of the structure-efficiency debate revisited

This study presents a simple model on the sources of inter-industry variation in profitability and tests its empirical implications in order to shed new light on the long-lasting debate over industry profitability. The model identifies four key factors that jointly influence an industry's price-cost margin: (i) the intensity of strategic investment (e.g. R&D and advertising), (ii) the skewness of the distribution of market share or market concentration, (iii) the appropriability of strategic investment, and (iv) the extent to which firms' market shares are determined by the intensity of their strategic investment. These factors are expected to be positively related to industry profitability, and our empirical analysis provides supportive evidence. The model also suggests that the conventional, single-dimensional hypotheses on profitability-the market-power (or market-structure) hypothesis and the efficiency hypothesis-are overly simplified. More importantly, existing empirical results allegedly supporting each of these hypotheses are spurious to the extent that the distribution of firm-specific strategic competence reflects firm heterogeneity in efficiency and, at the same time, underlies the distribution of market share or market concentration. Copyright 2009 , Oxford University Press.

Outsourcing, information leakage and the risk of losing technology‐based competencies

PurposeTo draw attention to a particular outsourcing risk that has not yet been adequately addressed in the literature, namely information leakage arising from acts of accidental disclosure or even purposeful betrayal by consultants that work for several client firms at the same time.Design/methodology/approachA review of the literature.FindingsIt illustrates how specialist IT service providers are playing pivotal roles in determining the extent to which unique firm specific skills and core competencies are being transferred to the wider industry context (via leakage) and becoming standard practices. It is shown that consultants face a dilemma as they are expected to spread cutting edge level expertise to their respective client firms, yet at the same time honour confidentiality commitments.Research limitations/implicationsConceptual rather than empirical.Practical implicationsA management tool is developed for managers to aid decision making.Originality/valueA critique of the outsourcing literature and a warning to managers to be aware of the risk of information leakage.

Coevolution of individual and firm-specific competences: the imprinting conditions and globalization of the Jaakko Pöyry group, 1946–1980

Finland remained in many ways isolated from the process of Americanization in Western Europe until the 1980s. This paper inquires into the history of a Finnish firm that was founded and successfully internationalized in the 1950s, to reveal why and how this firm adopted leading American management ideas and practices into its process of internationalisation without any direct American agency. Firstly, the paper reviews how there is gap between the American and Nordic traditions in research into the internationalisation of the firm, as well as how the coevolutionary framework can help to bridge the gap. Secondly, it reviews methods of social history and ethnography. Thirdly, it presents the imprinting conditions and history of the Jaakko Pöyry Group from 1946 to 1980 as a partly sequential and partly coevolutionary process of three elements: 1) the entrepreneurial development of core competences by a founder individual; 2) entrepreneurial diversification of markets and services by the firm he founded, and 3) coevolution between the firm and the founder within the environments in which they were embedded. The end of the paper will conclude (a) how the firm emerged to play a leading role in its chosen industry, (b) why the firm and its founder could function as global brokers of knowledge and competences in a country otherwise largely isolated from an international process of convergence, and (c) what kind of general lessons this particular combination of individual agency and globalization might contain.

A simple theory and evidence on the determinants of firm R&D

This paper derives a simple, but informative, model of firm R&D to figure out key factors that determine firm R&D effort. The model suggests a demand-pull, technology-push theory of R&D by showing that a firm's profit-maximizing R&D expenditure is determined jointly by both demand-side factors and technology-side factors. The former includes demand size (firm sales) and consumer preference over quality and price and the latter includes R&D cost structure or the production-cost effect of product R&D and firm-specific technological competence. In addition, the model shows that other things being equal, the stock of exogenous technological knowledge, including the firm's previously accumulated technological knowledge, relevant to current R&D which is negatively related with current R&D effort. An empirical analysis of firm R&D intensities and technological capabilities of more than 1600 firms in nine industries across six countries provides supportive evidence for the theory. Further, the theory implies that R&D intensity or the R&D-to-sales ratio is independent of firm size unless firm size affects technological competence and that given consumer preference and R&D cost structure facing all firms in the same industry, the distribution of firm-specific technological competence among firms determines the distribution of firm R&D intensities within the industry.

Local technological competence and asset-seeking FDI: an empirical study of manufacturing and wholesale affiliates in Sweden

This paper focuses on asset-seeking FDI where foreign TNCs tap into localised technological sources in order to augment their own firm-specific competencies. We use unique firm-level data from majority-owned foreign affiliates (MOFAs) located in West Sweden and investigate their technology development activities and to what purposes this is being put to use. The findings indicate that in a substantial number of MOFAs, the operations are part of an asset-seeking strategy, where the technological competence generated through MOFAs’ internal R&D operations, as well as through inter-firm collaboration with local business partners, especially customers, are not only aimed at local market adaptation, but also exploited internationally. Among manufacturing MOFAs this takes the form of export production, as well as a geographical transfer of technology to other corporate units, while among MOFAs engaged in the wholesale of industrial products, it basically takes the latter form.

Firm Specific Competencies: Conceptual Issues and Empirical Findings

Firm Specific Competencies: Conceptual Issues and Empirical Findings