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Empirical evidence suggests that competitive advantage is of considerable importance to organizations as global competition, extensive changes in technology, and customer demands intensify. However, little work has been done in the management accounting arena to identify critical organizational strategies that might facilitate it. Following a literature review, this study assesses the extent to which product life cycle cost analysis, customer involvement, and cost management contribute to the competitive advantage of firms. The findings of this research show that life cycle cost analysis, customer involvement, and cost management enhance an organization's competitive advantage, consistent with the study's theoretical expectations. The provision of empirical evidence on the utility of these three variables to the promotion of competitive advantage underscores the need to conduct further research focusing on them in management accounting.

This study contributes to the participative budgeting and budget misrepresentation literature by exploring: (1) whether managers’ judgments of fair behaviors are malleable and context-dependent and (2) if these judgments of fair behavior impact cost reporting misrepresentations. Two experiments investigate these questions. Experiment 1 (n = 42) tests whether the behavior that managers judge to be “fair” differs based on the decision context (i.e., initial economic position [IEP]). Experiment 2 (n = 130) investigates: (1) how managers’ deployment of fairness beliefs influences their reporting misrepresentations and (2) how decision aids that reduce task complexity impact managers’ deployment of fairness beliefs in their misreporting decisions. The study found that managers deploy fairness beliefs (i.e., honesty or equality) consistent with maximizing their context-relevant income. Hence, fairness beliefs constrain misrepresentations in predictable ways. In addition, we find more accounting information is not always beneficial. The presence of decision aids actually increases misrepresentations when managers are initially advantaged (i.e., start with more resources than others). The implications from these findings are relevant to the honesty and budgeting literature and provide novel findings of how managers’ preferences for fairness constrain managers from maximizing their income. The chapter demonstrates that contextual factors can influence the deployment of managers’ fairness beliefs which, in turn, differentially impact their reporting misrepresentation. Another contribution is that providing decision aids, which reduce task complexity, may not always benefit companies, since such aids may increase misrepresentation under certain conditions.

The increasing pace of global competition has recast the balance between multinational corporations’ (MNCs’) needs to protect the knowledge that underlies their competitive advantages and their needs to continually create new knowledge. This essay will discuss MNCs’ knowledge-seeking strategies as industry-level phenomena. I will argue that knowledge-seeking strategies demand a concept of industries both as arenas for competition and as global knowledge networks within which firms collaborate to innovate. Contemporary MNCs face challenges to function not only as self-contained production systems that internationalize in the search for efficiency and markets, but also as open systems globally seeking knowledge and innovations. Metanational strategies and organizations represent a new response to these challenges. I present empirical evidence of distinctive metanational industry opportunities and organizational responses from the emergence of the global flat panel display industry. The essay concludes with a framework that outlines the characteristics of a global knowledge-driven generic strategy as an alternative and synthesis of generic product-driven strategies of cost-leadership and differentiation.

Purpose – We seek explanation for the existence of international activity in industries whose characteristics provide conflicting rationales for international expansion. In such industries, the competitive value of some industrial characteristics is magnified by international expansion, whereas the value of others is undermined by these moves. The tension is amplified in the presence of sustainability concerns and the quest for meeting Corporate Social Responsibility (CSR) goals.Design/methodology/approach – The study is based on case studies of the world's largest multinational enterprise (MNE) producers of hydropower plant equipment, which provide representative examples of MNEs in renewable energy industries. We examine the strategic balances that these MNEs strike to deal with the conflicting pressure of international strategy and their performance outcomes.Findings – The insights we generate from the case studies suggest that there might be plural ways to successfully address such tensions, and firms’ histories and competitive advantages shape the choices they make in the face of these conflicts.Implications – Our contribution is of notable merits in the contemporary world whereby the pressure for international expansion extends to industries whose characteristics both favour and inhibit international activity. We outline the distinctive impact that sustainability concerns have in this tension.Originality/value of chapter – Our study serves to deepen the understanding of international activity in the renewable energy sector, a relatively understudied sector, whose significance in the world economy and in international business is growing rapidly. It is novel in extending the tension of international activity to include sustainability and CSR concerns.

Differentiation and revenue growth have heretofore been the focus of marketing practice in large Western companies. That focus is unlikely to work well as growth slows in aging Western markets and volume growth comes from more price sensitive emerging markets. Successful companies will need to deliver not just better products, but better value for money. That will require integrating marketing and operational choices to achieve greater cost-effectiveness. Pricing professionals are uniquely positioned to facilitate that integration and thus to become more involved in defining a profitable strategic focus for their companies. To fulfill that role, they will need to define and target market segments that reflect not just differences in growth potential and “unmet needs,” but also each segment’s “strategic fit” with the firm’s capabilities.

This paper presents a model of resources refinement for systematically and comprehensively deriving competence-based competitive advantages. Competence-based competitive advantages support market-based strategies. They reinforce the overall market-based advantages of low costs, product differentiation and minimal cost differentiation at the business unit level and of carrying out tasks jointly in a performance compound at the corporate level. Competence-based competitive advantages also support resource-based strategies by reinforcing the advantages of product innovation skills at the business unit level and transfer of core competences in a performance compound at the corporate level.

This chapter outlines a dynamic model of compositional strategic advantage for resource-poor firms where the attractiveness of the product offering in terms of scope and perceived value-to-price ratio identifies a number of elementary compositional strategies. A resource-poor firm can establish a compositional strategy composed of one or more of these elementary compositional strategies. It is argued that how the compositional strategic advantage is formed by three indispensable factors of aspiration (asymmetry between ambition and position), attitude (be “ALERT” to change), and action (use the asymmetry to create advantage). It is explained how the underlying theoretical rationales are particularly useful to understand the successful expansion of multinational Chinese firms and coinciding with basic cultural values.

This paper proposes a holistic, resource-based strategy framework for design-oriented industries consisting mainly of small firms. It consists of three main concepts: (1) sources of competitive advantage, especially core competencies, (2) competitive advantage, and (3) competitive strategy. The idea behind the framework is that sources of competitive advantage form the competitive advantages of firms, and these together influence the choice of competitive strategies. The proposed framework was developed on the basis of interview results from the jewellery industry in Finland. A total of 44 small firms each employing less than 25 people were interviewed. Respondents felt that the two most important core competencies were in the area of manufacturing. They were the abilities to design and manufacture products of high technical quality and to offer a broad range of products and attractive models. For the jewellery industry, competitive advantage was largely achieved through various aspects of design. The competitive strategy type most employed was the differentiation-based strategy. The proposed framework should be of value in integrating some of the diverse research in this area and suggesting specific relationships that might be the focus of future empirical studies.