Relative Competitive Advantage Research Articles

Examining intellectual capital and competitive advantage relationship

Purpose– The purpose of this paper is to investigate the impact of intellectual capital on competitive advantage in banking sector. Further, it also examines the role of innovation as a mediating variable and organisational learning as a moderating variable in intellectual capital and competitive advantage relationship.Design/methodology/approach– Data are collected from 144 branches of 21 public and seven private banks operating in Northern India (Jammu). Three executives (including one manager and two senior employees) from each branch are contacted purposively. Out of 576 questionnaires distributed, 339 questionnaires are returned with response rate of 62.08 per cent.Findings– The study finds that intellectual capital has direct and positive impact on the competitive advantage. It is also verified that innovation fully mediates the relationship between intellectual capital and competitive advantage. Further, the moderating effect of organisational learning on the relationship between intellectual capital and competitive advantage is also confirmed.Research limitations/implications– The study is limited to the banking sector of Jammu city only. Only three dimensions of intellectual capital are considered in the present study.Originality/value– The study represents the relationship between intellectual capital and competitive advantage in banking sector. The results extend the understanding of the role of organisational learning and innovation in creating intellectual capital and building sustainable advantages for organisations.

The effects of fertilization on the trait–abundance relationships in a Tibetan alpine meadow community

Aims Comparisons of the trait-abundance relationships from various habitat types are critical for community ecology, which can offer us insights about the mechanisms underlying the local community assembly, such as the relative role of neutral vs. niche processes in shaping community structure. Here, we explored the responses of trait-abundance relationships to nitrogen (N), phosphorus (P) and potassium (K) fertilization in an alpine meadow. Methods Five fertilization treatments (an unfertilized control and additions of N, P, K and NPK respectively) were implemented using randomized block design in an alpine Tibetan meadow. Species relative abundance (SRA), plant above-ground biomass and species richness were measured in each plot. For 24 common species, we measured species functional traits: saturated height, specific leaf area (SLA) and leaf dry matter content (LDMC) in each treatment but seed size only in the unfertilized control. Standard major axis (SMA) regression and phylogenetically independent contrasts (PICs) analysis were used to analyse species trait-abundance relationships in response to different fertilization treatments. Important Findings Positive correlations between SRA and saturated height were raised following N, P and NPK fertilizations, which indicated an increase in light competition in these plots. In P fertilized plots, SRA was also positively correlated with LDMC because tall grasses with a nutrients conservation strategy often have a relative competitive advantage in capturing limited light and soil nutrients. In K fertilized plots, neither the trait-abundance relationships nor above-ground biomass or species richness significantly differed from that in the control, which suggests that K was not a limiting resource in our study site. These significant correlations between species traits and relative abundance in fertilized treatment suggest that trait-based selection plays an important role in determining species abundance within local communities in alpine meadows.

Oppose, Support, or Hedge? Distributional Effects, Regulatory Pressure, and Business Strategy in Environmental Politics

What explains the choice of corporate political strategy in environmental politics? Drawing on recent models of actor strategy formation in political economy, this article argues that basic material interests of firms are translated into strategies in the context of institutional environments. I advance a typological model that posits how distributional effects—positive versus negative—and perceived regulatory pressure—low versus high—interact in leading firms to adopt one of four ideal-type strategies: opposition, hedging, support, and non-participation. This article examines the model through the case of corporate strategies in the making of the European Union’s Emission Trading Scheme. The article contributes to theory-building on business strategy in environmental politics by offering a probabilistic explanatory model, and it flags hedging strategies as an increasingly prevalent form of business behavior.

Gaining relational competitive advantages: a conceptual framework on rent generation and appropriation

Establishing Strategic Technological Partnerships (STPs) with foreign partners is an increasingly studied topic within the innovation management literature. Partnering firms can jointly create sources of relational competitive advantage. Chinese firms often lack Research and Development (R&D) capabilities but are increasingly becoming preferred technological partners for transnational corporations. We investigate an STP between a Scandinavian and a Chinese firm and try to explore how to gain relational competitive advantage by focusing on its two essential stages: relational rent generation and appropriation. Based on an exploratory case study, we develop a conceptual framework that consists of process, organisational alliance factors and coordination modes that we propose lead to relational competitive advantage.

The competence loop

Purpose – Knowledge-intensive organizations tend to be project intensive having many projects of different size and importance. In this context, competence evolves through projects. The purpose of this paper is to identify the mechanisms that steers competence management in these kinds of organizations and also the factors that are involved in the human capital contribution to competitive advantage in relation to the interaction between parent organizations and projects. Design/methodology/approach – This study has a contingency theory perspective and consists of a literature search in the following domains: project-intensive organizations, knowledge-intensive organizations, competence management, human resource management and dynamic capabilities and learning. Findings – The main contribution of this study is the theoretical framework derived from different domains. The framework is called the competence loop and explains how projects generate competence that the parent organization can either exploit in further activities or use for strategy adjustment. It also explains how an organization can use learning strategies to support competence exploration/exploitation. Another contribution is the description of the relationship between dynamic capabilities and organizational learning in project-intensive organizations. Research limitations/implications – This paper is a conceptual paper intended to create a base for further empirical studies. Originality/value – The paper combines different domains to define a framework that is a new approach to competence management in a project-parent organizational context. The framework includes learning and competence management characteristics and has both theoretical and practical value.

Gestão da cadeia de suprimento e vantagem competitiva relacional nas indústrias têxtil e de calçados

Esse artigo investigou a contribuição da gestão da cadeia de suprimento para a vantagem competitiva relacional nos setores têxtil e de calçados, por meio de um estudo de casos múltiplos. Foram analisadas as características do relacionamento com os fornecedores e as relações das empresas com componentes do ambiente institucional, bem como a influência destas na vantagem competitiva, além das diferentes fontes de vantagem competitiva percebidas pelas empresas. As características dos relacionamentos com os fornecedores do setor de calçados apresentam maior alinhamento aos pressupostos da gestão da cadeia de suprimento e contribuem de forma mais relevante para a vantagem competitiva. As relações com componentes do ambiente institucional, em ambos os setores, levam a uma situação de paridade competitiva em relação aos concorrentes. Com relação às fontes de vantagem competitiva, a inovação de produto predomina nos dois setores.

Gestão da cadeia de suprimento e vantagem competitiva relacional na indústria de calçados

Este artigo tem como objetivo geral investigar a contribuição da gestão da cadeia de suprimento para a obtenção de vantagem competitiva por empresas da indústria de calçados, com foco principal na análise das relações interorganizacionais. Utilizou-se para tal um modelo de análise desenvolvido por Viana (2010), cujo principal suporte teórico é dado pela visão relacional (DYER; SINGH, 1998). Trata-se de um estudo de casos múltiplos interpretativo, englobando duas empresas do setor calçadista que atuam no Ceará, em cuja análise de dados foi aplicado o método das comparações constantes, com o auxílio do software Atlas/ti. Em linhas gerais, percebeu-se que nos relacionamentos das empresas com seus fornecedores predomina o regime de parceria e são aplicados os principais pressupostos da gestão da cadeia de suprimento, o que contribui para a obtenção de vantagem competitiva relacional. Nas relações das empresas com o Governo e as instituições de fomento, os incentivos fiscais constituem o principal recurso acessado, os quais contribuem para a obtenção de vantagem competitiva temporária em relação aos concorrentes que não possuem instalações produtivas no Nordeste, bem como levam à situação de paridade competitiva em relação aos concorrentes que possuem instalações produtivas na Região Nordeste a aos concorrentes no mercado externo.

Competitive Advantage: The Courage in Formulating Objectives and Expansiveness of a Strategy

Competition, innovation and globalization are buzzwords, which for a few decades have been present in almost every aspect of social or economic activity. In particular, the growing interest in issues associated with the competitiveness has contributed to the development of theories and studies in the scope of the competition analysis and the competition strategies. Publications related to the subject of strategic management put a considerable emphasis on the issues concerning the competitive advantage as a factor determining the success or failure of organizations or nations. An emphasis is put on the necessity to stand out against competitors or to build a long-term sustainable competitive advantage. The latest studies, in response to the increasing variability or even chaos in the environment, indicate the need to stray away from the term “sustainable”, and use the term “flexible” or “variable” in relation to the competitive advantage. The combination of sustainability, temporariness and otherness as the features characterizing an ideal competitive advantage seems to be one of the major challenges to be faced both by organizations implementing the strategic management process and theoreticians studying this area.The purpose of this paper is to examine relationships between the competitive advantage and courage when formulating objectives. Bearing in mind the aforementioned goal, there have been analysed the assumptions concerning the sources and evaluation of the company's competitive advantage in relation to the courage in formulating key objectives. In particular, the analysis concerned the issues related to the evaluation of the competitive advantage against the background of competitors, the main sources of the competitive advantage, and the relationship between the choice of a competitive advantage and the courage in formulating the key objectives, which manifests itself in the strategy expansiveness level.

The Role of Knowledge-Based Economics in Improving Competitive Advantage with an Entrepreneurial Approach

In today’s world, knowledge-based economics has changed all the fields of commerce, economic structure, productivity, management methods and so on and possesses characteristics including trade liberation and commerce globalization, information and communication technologies, knowledge management, infrastructural alterations of economy, location and workforce changes, increasing the choosing rights of the customers, shrinking the government and electronic commerce. In order to implement knowledge in economy, entrepreneurship and creativity play a significant role in preparing the basis for change, revolution and transformation and in the arena of international competition, entrepreneurial companies have directed their cutting edge competitiveness towards organizational flexibility and continuous transformation of working processes, products and designs. Accordingly, the current paper tries to answer an important question concerning the position of knowledgebased economy in improving competitive advantage through instating it in entrepreneurial culture. In order to answer this question, knowledge-based economic measures proposed by the World Bank and ARDL econometric method are used. The results show that in industrial and service sectors, there is no stable competitive advantage which can be an indication of a weakness in implementing the trainings presented to entrepreneurs. Moreover, the results indicate the improvement in relative competitive advantage for the agricultural sector and the reliance of Iranian economy on the traditional portion of economy.

Determining the core activities in the order fulfillment process: an empirical application

Purpose – This work examines the relationship between internal and relational capabilities and the creation of value to the end consumer in the case of the process of receipt, manufacture, and delivery of orders within the supply chain. This work develops a methodology to identify operations that generate core competences and those that do not, with the aim of improving the management of the supply chain. Design/methodology/approach – This work analyses the order fulfillment process in a representative sample of firms operating in a region of Spain. To accomplish the research objectives, a personal survey was conducted using a questionnaire to evaluate 13 activities of the order distribution process in the supply chain. Findings – The results of the study reveal that internal and relational capabilities explain the creation of value to the consumer. They also identify two groups of operations in line with their ability to be sources of relational or internal competitive advantage. With regard to the activities, it was shown that there are some activities that form part of the core competences, while others constitute non-core competences. This work demonstrates that the core activities generate higher value to the end consumer; however, it also shows how important the non-core activities may be to the creation of value. Practical implications – The work offers orientation as to how the analyzed process should be redesigned to obtain a competitive advantage. Thus, this higher value to the end consumer will enable the firm to reduce prices or at least maintain them, in which case the firm will be able to offer additional services that differentiate it from the competition. Originality/value – Finally, although the literature contains some works that analyze capabilities or relational performance, none to date have used variables such as activity simplification, integration and relational competitiveness in the framework of relational capabilities in the order fulfillment process. Another significant innovation of this work is the analysis at operation level, in which 13 activities belonging to an important process in the supply chain are analyzed.

Competitive disadvantage facilitates risk taking

Risk-sensitivity theory predicts that organisms are more likely to take risks when they are unlikely to achieve their goals through safer, low-risk means. Those who are competitively disadvantaged are less likely to succeed in social competition and should consequently show elevated risk taking. We experimentally tested this hypothesis by exposing participants to cues of relative competitive disadvantage or relative competitive advantage via feedback from a purported reaction time based intelligence test. Participants then made a number of high-risk or low-risk economic decisions (Experiment 1). Experiment 2 built on this design by either maintaining or ameliorating cues of relative competitive (dis)advantage. Results indicate that cues of relative competitive disadvantage leads to increased risk taking, and that risk taking can be reduced when cues of disadvantage are ameliorated. Since risk taking tends to generalize across domains, these results can potentially apply to a number of problematic risky behaviors.

Economic impacts of climate change on the Australian dairy sector

We analyse the economic implications of climate‐driven pressures on the pasture‐based dairy sector in Australia. We use an integrated assessment model that includes a climate scenario generator, a climate‐biophysical response framework and an economywide analytical framework. For the climate scenario generator, we use data from the OzClim database of the Commonwealth Scientific and Industrial Research Organisation. For the climate‐biophysical response framework, we use the DairyMod model with inputs of changes in climate variables from OzClim to quantify climate change effects on pasture growth and productivity. For the economywide analytical framework, we use the National Integrated Assessment Model to quantify the economic implications of these effects on the dairy sector. The simulated pattern of regional changes in dairy output is not a simple function of the changes in dairy productivity. Our results show that the relative size of productivity changes across regions affects the relative competitive advantage of dairy‐producing regions. Several factors affect the regional distribution of simulated dairy‐output changes, including substitution among sources of dairy output and competition for inputs like supplementary feed. An increased output in regions with moderate reductions in dairy productivity may occur because the severely climate‐affected regions absorb the greatest loss in output.

The Effects of Information Technology Applications on Collaborating Capability in Achieving Organisational Competitive Advantages in Malaysia

Emerging and developing countries, particularly in Asia, have seen relatively strong economic growth. Withright information technology (IT) adoption, the strong growth would provide a great advantage in improving thepotential of the growth of companies. This paper highlights information technology (IT) applications havemoderating effects towards collaborating capability-organisational competitive advantage relationship based onempirical justifications of 295 Multimedia Super Corridor (MSC) Malaysia companies. These findings fromMalaysia, a fast growing Asian country, would serve as guidelines to organisations in other emerging anddeveloping countries on key IT application necessary for organisational competitive advantage. Findings revealthat there were nine IT applications that moderate the collaborating capability-E-Mail, Content Management,Decision Support System, Knowledge Base/Repository, Document Management, Search Engine, WebsiteContent, Intranet and Internet Access. The contributions to research and practice including suggestions forfuture studies are discussed.

Corporate IT Standardization: Product Compatibility, Exclusive Purchase Commitment, and Competition Effects

When companies purchase information technology (IT) products for their employees, departments, or divisions, whether to standardize on one product or to allow the users to make their own choices is an important decision for IT managers to make. By consolidating demand and committing to buy from a single seller, standardization ensures product compatibility within the corporation and has a potential to induce intense price competition among sellers, but this potential is subject to whether competing products are compatible and the relative competitive advantages of the sellers. This paper studies when it is optimal for an employer to commit to exclusive purchase from a single seller to enforce standardization and sellers' incentives to invest in mutual compatibility. Our results suggest that the employer is more likely to make such a commitment when the competing products are compatible, less vertically differentiated, and/or more horizontally differentiated. We also find that the sellers agree to cooperate and invest in mutual compatibility only when the gap between their competitive advantages is moderate, but the availability of third party converters that enable partial compatibility can induce more collaboration among the sellers.

Taxing banks fairly

There is no reason to continue to exempt financial services and products from Value Added Tax in the UK, and indeed elsewhere. Its introduction in the UK would help to precipitate the end of the iniquitous and inefficient ‘free banking’ system. Its demise should be enforced by a retail banking and insurance utility regulator that would assure that charges to customers reflect costs incurred by banks and thus eliminate the cross-subsidisation underpinning ‘free banking’. Further, the shareholders and senior bondholders of ‘too big to fail’ banks enjoy a guarantee from taxpayers which they are not paying for. This puts them at a competitive advantage in relation to smaller banks and exposes taxpayers to losses in crises. The big banks should thus pay regulatory and fiscal taxes commensurate with the insurance they enjoy and these taxes should be carefully calibrated so as not to overburden domestic banks relative to international competitors. The taxes paid should relate to a bank's risk exposure and the risks a bank poses to the financial system as a whole. The banks should thus contribute proportionately (with other taxpayers) to producing the Public Good, financial stability. The issue of the tax bias caused deductibility of interest, but not dividend payments, as business expense is also explored. To achieve equal treatment of debt and equity, deductibility could be extended to dividends, but the tendency toward over indebtedness might be curbed if tax deductibility of interest was eliminated, perhaps starting with banks!

Taxing Banks Fairly

There is no reason to continue to exempt financial services and products from Value Added Tax in the UK, and indeed elsewhere. Its introduction in the UK would be likely to precipitate the end of the iniquitous and inefficient ‘free banking’ system. Its demise should anyway be enforced by a retail banking and insurance utility regulator that would assure that charges to customers reflect costs incurred by banks and eliminates the cross-subsidisation underpinning ‘free banking’. Further, the shareholders and senior bondholders of ‘too big to fail’ banks enjoy a guarantee from taxpayers which they are not paying for. This puts them at a competitive advantage in relation to smaller banks and exposes taxpayers to losses in crises. The big banks should thus pay regulatory and fiscal taxes commensurate with the insurance they enjoy and these taxes should be carefully calibrated so as not to overburden domestic banks relative to international competitors. The taxes paid should relate to a bank’s risk exposure and the risks a bank poses to the financial system as a whole. The banks should thus contribute proportionately (with other taxpayers) to producing the Public Good, financial stability. The issue of the tax bias caused deductibility of interest, but not dividend payments, a business expense is also explored. To achieve equal treatment of debt and equity, deductibility could be extended to dividends, but the tendency toward over indebtedness might be curbed, if tax deductibility of interest was eliminated, perhaps starting with banks.

Relicensing as a Secondary Market Strategy

Secondary markets in the information technology industry, where used or refurbished equipment is traded, have been growing steadily. For original equipment manufacturers (OEMs) in this industry, the importance of secondary markets has grown in parallel, not only as a source of revenue, but also because of their impact on these firms' competitive advantage and market strategy. Recent articles in the press have severely criticized some OEMs who are perceived to be actively trying to eliminate the secondary market for their products. Other OEMs have policies that enhance their secondary markets. The goal of this paper is to understand how an OEM's incentives and optimal strategies vis-à-vis the secondary market are shaped contingent on her relative competitive advantage, product characteristics, and consumer preferences. The critical trade-off that we examine is whether the indirect benefit from maintaining an active secondary market (the resale value effect) can outweigh the potentially negative effect of the sales of used products at the expense of new product sales (the cannibalization effect). To that end, we develop a durable good model where the OEM can directly affect the resale value of her product through a relicensing fee charged to the buyer of the refurbished equipment. We analyze the OEM's strategy in both the monopoly and the duopoly cases, characterize the optimal relicensing fee set by the OEM, and draw conclusions on the conditions that favor stimulating or deterring the secondary market. This paper was accepted by Candace A. Yano, operations and supply chain management.

Growth and competitive effects of Centaurea stoebe populations in response to simulated nitrogen deposition.

Increased resource availability can promote invasion by exotic plants, raising concerns over the potential effects of global increases in the deposition of nitrogen (N). It is poorly understood why increased N favors exotics over natives. Fast growth may be a general trait of good invaders and these species may have exceptional abilities to increase growth rates in response to N deposition. Additionally, invaders commonly displace locals, and thus may have inherently greater competitive abilities. The mean growth response of Centaurea stoebe to two N levels was significantly greater than that of North American (NA) species. Growth responses to N did not vary among C. stoebe populations or NA species. Without supplemental N, NA species were better competitors than C. stoebe, and C. stoebe populations varied in competitive effects. The competitive effects of C. stoebe populations increased with N whereas the competitive effects of NA species decreased, eliminating the overall competitive advantage demonstrated by NA species in soil without N added. These results suggest that simulated N deposition may enhance C. stoebe invasion through increasing its growth and relative competitive advantage, and also indicate the possibility of local adaptation in competitive effects across the introduced range of an invader.

The effects of integrated supply management practices and environmental management practices on relative competitive quality advantage

Superior quality continues to be central to a manufacturing company's success, and firms are constantly striving for quality advantage over their competition. It is therefore crucial for companies to ensure the sound practice of quality management principles. However, companies must also seek additional avenues to enhance the relative competitive quality advantage of their product offerings. In this context, we examine the role of integrated supply management practices (SMP) and environmental management practices (EMP) as drivers of actual and perceived quality. We suggest that these groups of practices, in addition to quality management practices, are crucial in an increasingly transparent, competitive and global business environment. As such, SMP can be leveraged with suppliers providing expertise, capabilities and high quality inputs for the final product, resulting in higher actual quality, but also via the suppliers’ more intangible reputation, generating higher perceived quality. Similarly, EMP can result in process improvements impacting actual quality, but can also create a favourable image of the company among customers, enhancing the perceived quality of the firm's products. Overall, we suggest SMP and EMP as key strategic drivers aiding in the further differentiation of firms. Our hypotheses are grounded in the resource-based view of the firm, and are tested with survey data collected from 434 manufacturing plants.

The effects of buyer‐supplier relationships on buyer competitiveness

PurposeThis paper aims to propose a new theoretical model based on the AAR framework (actor bonds, activity links and resource ties) to examine the effects of the identified buyer‐supplier relationship elements on four indicators of relative competitive advantage for the buyer firm.Design/methodology/approachThe paper bases its findings on data gathered through a survey of 216 key informants within the Australian manufacturing sector. AMOS v. 18 is used to perform confirmatory factor analysis and to estimate a structural model of the proposed hypotheses.FindingsThe paper finds support for the notion that actor bonds between the firm and its largest supplier provide a source of competitive advantage that result in higher relative customer satisfaction, innovation, market efficiency and market effectiveness for the buyer firm. The paper also supports the notion that a positive relationship between information sharing and asset efficiency exists.Practical implicationsThis paper demonstrates that the maintenance of positive relationships with the firm's largest supplier has implications for the firm in terms of its competitive outcomes. There is now more support for managers when building and maintaining relationships with important suppliers since there are potential implications for the firm's own competitive position.Originality/valueThe findings of this study extend previous research in the area of relationship marketing by providing a new link between relationship elements and direct competitive outcomes in a follow‐on market. It also shows that these elements have differential effects on these competitive outcomes.