Enhancing Competences for Competitive Advantage: Volume 12

This volume of Advances in Applied Business Strategy (AABS) presents a collection of studies exploring different ways in which an organization's competences can be enhanced to create competitive advantage that is enduring or intendedly transitional.

Extant work on lobbying primarily focuses on who is lobbying and is lobbied as well as strategies of how to exert influence. More fundamentally, we address (1) what drives firms to engage in lobbying activities at all and (2) what factors determine the alignment of corporate lobbying. More concrete, we investigate why and also how firms do lobbying. Another intention is to further anchor this highly relevant instrument of business practice in the scientific discourse of strategic management.

It turns out that the dynamic, systemic, cognitive, and holistic rationale of the competence perspective is a very strong contributor of fresh thoughts to the debate on lobbying as a strategic means. We adopt this perspective by specifically making use of the Competence-based Theory of the Firm (CbTF) in order to scrutinize this issue in theoretical terms. Especially path-dependent developments when building and leveraging a firm's resources and competences as well as resource/competence specificity cause organizational inertia and limited adaptability to changing environmental conditions. Instead of passively adapting to changing environmental conditions, lobbying activities directly aim at entrepreneurial and goal-oriented attempts to exert influence and to steer changes in the relevant business environment, basic conditions underlying every market process, or institutional migration paths at points of inflection. Acknowledging their discretionary potential to act, agents seek to achieve a strategic fit between market requirements and the output they are able to render based on their competences by using the lever of manipulating their environment.

Empirically, propositions are derived and validated with an integrated set of qualitative empirical methods applied in the German healthcare system between 2004 and 2008.

As an answer for the limited growth potentials of diversification and internationalization, services became increasingly important for industrial firms in recent years. Based on existing and established business concepts, companies explore new segments in their traditional value chains beyond traditional market penetration strategies: they pursue service transition strategies to open up new sources for growth, even in markets that do not promise great expansion potential. Our paper addresses the issue of economies of scope of service transition. In this context, we first explore the question, to what extent the insights about product diversification strategies from physical goods sectors can be transferred to the service sector. Using competence-based considerations on diversification we focus on dynamic economies of scope, whose central idea is exploration and development of new resources rather than the static exploitation of existing ones. Furthermore, we integrate the largely neglected issue of how the phenomenon of service diversification depends on the industry's life cycle stage. In a small empirical study of the German mechanical engineering industry we demonstrate that diversification steps into services require a shift in the resource and competence base of firms. Using a dynamic perspective, we construct a conceptual framework for analyzing and explaining the advantages of service transition strategies. The developed model describes a service diversification trajectory and points out that the establishment of a profitable service business requires the exploration and development of competences and adequate organizational structures.

Small- and medium-sized enterprises (SMEs) often do not have slack resources with which to develop internally a broad spectrum of capabilities and to observe in depth the firm's environment. Therefore, they need to carefully develop abilities to absorb knowledge from outside the firm's boundaries so as to have access to cutting-edge knowledge in spite of limited resources. One strategy is to establish knowledge management (KM) projects for this purpose. In this paper, we describe how KM projects and subsequently emerging KM routines in SMEs facilitate the enhancement of the firm's absorptive capacity (AC; i.e., the ability to recognize, capture, and assimilate external knowledge). Our results indicate the importance of recognizing potential knowledge providers prior to any absorption of knowledge from external sources. Furthermore, we emphasize the relevance of routines for absorbing knowledge and we distinguish between KM routines that are deliberately developed for absorbing knowledge and KM projects where knowledge absorption happens unconsciously. Finally, we point out that different stages of an AC process follow different logics (exploration vs. exploitation) and, thus, a skilful management of the AC cycle is necessary to leverage externally absorbed knowledge.

Journal articles and books on Toyota's competitive advantage abound. More recent analyses tended to focus on Toyota alone (Coriat, 2000; Liker, 2004) while earlier literature examined the competitive advantage of the Japanese automobile industry as a whole (Asanuma, 1989; Womack, Jones, & Roos, 1990; Fruin, 1992; Dyer, 1994, 1996a, 1996b). Intensive analysis on the Toyota Production System (TPS) notwithstanding, what exactly constitutes the system's inimitability remains elusive. This paper contributes to existing literature by examining how a post-war industrial policy might have given rise to Toyota and Nissan adopting two different strategic logics (or governance structures) as each had a unique set of resources and competences. Different governance structures however, did not appear to contribute to inter-firm performance variance between the two competitors for at least 15 years. What then could be the source of Toyota's competitive advantage and its inimitability? This paper unravels how causal ambiguity might have confounded Nissan, Toyota's only significant domestic rival for the second half of the last century.

Building on the dynamic resource-based view, this paper suggests that increasing market dynamism and continued resource evolution contribute to the development of temporary competitive advantages utilized in the internationalization of high-technology firms. All competitive advantages needed for internationalization can first be seen as temporary by nature, and it is the outcome of managerial selection and competition, conditioned by the determinants of market dynamism and resource evolution that some resources and advantages may become sustainable. Using a case study approach, this paper suggests that sustainable competitive advantages for internationalization emerge from the temporary advantages through a life cycle as the effects of market dynamism and resource evolution decrease, or their determinants lose relevance in the international markets. The paper aims to contribute to the theoretical discussion concerning the nature and consequences of managing temporary competitive advantages and the internationalization processes.

Building on the complementarity nature of extant dyadic and portfolio level alliance research, this paper discusses the role of alliance capability and relational quality as antecedents of alliance performance. Although prior research focused extensively on the influence of dyadic issues on alliance performance, more recent studies focus on firm-level capabilities to manage sets of alliances. We specify an integrated framework that merges these two previously separated streams of research and discuss how firm-level alliance capabilities affect dyadic level relational quality. The framework suggests that relational quality mediates between both alliance capability and alliance performance and provides a detailed discussion on how firm-level mechanisms improve the quality of dyadic relationships. We also discuss implications and options for future research.

This paper has a threefold purpose. First, we offer a literature review on alliance capability based on strategic and competence-based management literature. Second, we extend existing literature on alliance capability by breaking this concept down into five subcapabilities, each of which is linked to a stage of the alliance life cycle. Finally, we suggest how firms can support these capabilities through structural, technological, and people-related tools and techniques. We argue that current literature has focused mainly on organization-wide characteristics, the general alliance function, and alliance experience to explain the level of alliance capability. Although we acknowledge the importance of these elements, we stress that more attention needs to be given to the various stage-specific components, actions, and supportive mechanisms that can result in an improved alliance capability.

Entrepreneurs are action takers. This paper presents an agent-based model illustrating entrepreneurial action choices between rhetoric and action during the very early stages (pre-formal alliance) of an entrepreneur's journey. Environmental factors, inertia, entrepreneurial conation preferences, the context-for-learning, and identified opportunities are all factors that will influence action choices both separately and in configurations. In virtual experiments, we examine the length of time it takes entrepreneurs to reach the stage for opportunity commitment, based on their skills and conation profiles. From the computer simulation, we determined that certain entrepreneurial profiles do make a difference in the overall effectiveness and efficiency of reaching an opportunity commitment. In general, an entrepreneur is more effective in reaching opportunity commitment if the entrepreneur has either a high skills profile, or a high conation profile, while the combination of high-level skills and conation profiles do not provide any real advantage. A high skills profile proves to create the greatest advantage of reaching opportunity commitment in the shortest length of time.

The understanding of competency development has changed to learning toward a higher degree of self-organization of the learning process. This shift leads to increased requirements on the communication processes of employees and superiors. It is postulated that the coordination between self-organization and external organization is deficient, so competency development activities often do not lead to the desired outcomes. An empirical study was undertaken in which a total of 106 companies were involved. The study investigated various expectations surrounding self-organization and external organization in large companies as opposed to SME, together with the conditions under which self-organization and external organization occur in these companies. The empirical study comes to the conclusion that large enterprises emphasize the central role of HR development for the innovation capacity of an organization more than SME. There are also different ways of combination of self- and external organization of competency development depending on the enterprise size. In contrast to the given assumption, it could not be identified that managers as HR developers can improve the success of competency development.