Competence Perspectives on Resources, Stakeholders and Renewal: Volume 9

The competence-based perspective shares with the resource-based view the notion of the fundamental importance of an organization's resources in its competitive outcomes.¹ In his paper “Probing into the nature of resources: Sustainable advantages and appropriable rents in the U.S. motion picture industry,” Jamal Shamsie investigates the sustainability of the competitive advantages that strategically important resources can bring to a firm, as well as the appropriability of the economic profits (rents) that can be derived from the uses of resources. To this end, the paper develops a classification of resource types based on the nature of a resource's ownership and control. Shamsie studies the U.S. motion picture industry to assess the degree of sustainable advantages and appropriable rents that can be generated by three types of resources: contracted resources, owned resources, and embedded resources. His findings suggest that in the subject industry both sustainability and appropriability are likely to be low for contracted resources such as top-rated stars and directors, while the greatest potential for sustainability and appropriability attach to embedded resources that accumulate firm-specific knowledge and learning in the development and marketing of various film genres.

Most of the resource-based literature has concentrated on the sustainability of advantages rather than on the appropriability of rents that can be derived from these. In this paper, we focus on both of these issues by developing a classification of resources based on type of ownership and control. We use the U.S. motion picture industry to assess the degree of sustainable advantages and appropriable rents that can be generated by contracted, owned and embedded resources. We suggest that both sustainability and appropriability is likely to be lowest for contracted resources such as top-rated stars and directors. On the other hand, these are likely to be highest for embedded resources which typically reflect firm-specific knowledge and learning in the development and marketing of various types of film genres.

In this paper the concept of the value of resources is operationalized. It is argued that the resource value is determined in dyads, instead of within one firm. The purchasing model of Kraljic (1983) is used to operationalize “value” from a supply chain perspective. The value of the resource of a firm is determined by the value of the resource as perceived by its customer(s). The presented model can be used by organizations to build and develop their resource base, and thus create better relations with their customers.

The aim of this paper is to give empirical evidence of the fundamental mechanisms underlying the resource systemics: time compression diseconomies, asset mass efficiency, and interconnectedness of assets. It assumes that time, resource properties and interactions are the critical elements leading to accumulation of idiosyncratic resources, firm performance and survival. Results from a Cox regression on a simulated dataset confirm the protective effects of time compression diseconomies, asset mass efficiency, and interconnectedness of assets against firm's death.

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.

Intangible resources are recognized to hold the potential leading to a competitive advantage. Understanding how such resources are developed is, therefore, equally important. Certainly, a leader's job includes the development of intangible resources. One increasingly important area in the development of managerial expertise is a strategic organizational competence. Managerial expertise is the attainment of having master managers throughout the organization. For managers, such master manager skills include not only knowing what to do, why to do it, and how to do it; but, also knowing when to do it. On-the-job experiences often translate into tacit knowledge in areas as they relate to specific productivity tasks, however, knowing what, why, how, and when with management skills are more problematic. This is even more problematic when the skill development program is left up to the individual manager. When should one seek additional training on a regular basis? When can one forgo routine training and only occasionally brush up one's skills through training? The costs of training continue to increase and make the need to determine cost-effective training programs more important than ever before. This paper addresses the combining of assessments into a joint understanding of managerial expertise levels. It presents the results of assessment for several supervisory nursing staff in two hospital departments and the use of these assessments in communicating needed personal improvement plans.

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.

This paper discusses common approaches and understanding of human resources management and development (HRM/HRD), especially pointing out the need for connecting HRM/HRD with strategic logic and objectives. A strategic capability based HRM model is presented. Strategic capability, directly and indirectly value adding professional competence, social capital, and their systemic relationships are discussed in more detail. Empirical studies dealing with relationships of the model are introduced in brief. Discussion is illustrated by examples from various industries.

This paper deals with competence management from a system's perspective. The authors adopt the meta-model for systems, as introduced by Eric Schwarz, and explain the basic systemic categories (components, relations, whole) of the organisation, in terms of competences. The systemic nature and the interdependencies of competence assets, capabilities and core competences are presented. Subsequently, the authors explore the viability of organisations, from the perspective of competences, and building on the characteristics of viable systems as described by Schwarz. They introduce Systemic Competence Management, a way to manage competence assets, capabilities and core competences in support of the viability of the organisation.

The incentives for organizations to practice good corporate citizenship include social expectations and pressures, the ingrained values of corporate leaders, and citizenship's contributions to business performance. In addition, healthcare organizations have a unique citizenship incentive because of the relationship between practicing corporate citizenship and achieving the core, health-enhancing purposes of these organizations. A template of six organization behaviors that have been empirically determined to be widely used citizenship-related behaviors is described, along with how a large healthcare organization exhibits these behaviors. A three-step process is described through which healthcare organizations can build competence in corporate citizenship by (1) incorporating citizenship commitments into their missions and giving citizenship a high priority; (2) organizing to build competence in corporate citizenship, and to facilitate and sustain citizenship performance; and (3) maintaining commitment to citizenship competence and increasing citizenship performance by conducting periodic citizenship audits, and acting on the results.

This paper draws upon the idea that an organisation can be understood as an open system embedded in a larger social system. We propose that geographical proximity is a key determinant of the porous boundaries of organisations. Proximity produces repeated, trusting and long-term perspective relationships. Consequently, clustered firms (i.e. in an industrial district) develop relevant relations and interactions within this social system. Firms acquire new resources and capabilities using external endowments. In an industrial district, firms benefit from a common reputation, from an intense exchange and combination of resources, and the presence of different local institutions. As a result, firms in the industrial district may improve innovation and net-value creation capacities, which explain the competitive superiority of these firms. Our study draws on an empirical study involving a sample of 350 Spanish industrial firms in which we compared district and non-district member firms. Findings suggest relevant conclusions with respect to our theoretical propositions.

A stakeholder-oriented perspective stimulated the discussion concerning competence-based strategic management. This perspective enlarged the range of causalities that provided core competencies and widened managerial discretion. The aim of this paper is to gain empirical insights based on the situation in nine companies. Here we focus on three research questions: Why did the firms adopt a broader stakeholder orientation? How does this perspective affect the firms’ strategy, structure and culture and to what extent are the stakeholder interactions considered as core competencies? How is this implemented in reality? To answer these questions we conducted interviews and held workshops with nine firms. The results of this empirical study are reported and conclusions for the practical management are drawn.

How do large well-established firms renew themselves in an increasing turbulent environment? Is there a generic pattern of change or is each change journey rather idiosyncratic? We posed five questions about the nature of renewal patterns. First, how do firms combine external versus internal initiatives in a trajectory of strategic renewal? Second, how does the balance of competence building and competence leveraging evolve in a trajectory of strategic renewal? Third, what are the sequences of action in a strategic renewal process? Fourth, do firms differ regarding speed of their renewal processes? Finally, do different strategic renewal trajectories give rise to different or similar outcomes? Using a simple framework and new metrics we described and analyzed the strategic renewal journeys of the five largest financial service firms in the Netherlands during the period 1990–1997. We found equifinality in viable trajectories of strategic renewal. In four out of five firms, they result in similar outcomes due to mimetic behavior. Nonetheless, one firm showed deviant strategic behavior.

This paper applies a complexity-theory-based simulation to the diverse field of organizational behavior. The specific form or level of competency emerges from the involved people and resources and the interactions among them. This paper focuses on an organizational competency of being capable to change which arises from the set of individuals involved (a leader and direct reports) and their interactions. This model is a simplified version of reality that may provide insight into the complex processes of organizations. The Context-for-Learning (CFL) competency is based on the work of Black and Boal 1997. Leader behavior is based on Quinn's competing values framework (1984, 1988). In addition to complexity theory, the simulation uses social constructivism to explain the coevolution of the individual, leader, and organizational capabilities. Using the same set of individual responses for a set of subordinates and varying leader behavior, we examine the resulting level of organizational CFL. This simulation demonstrates that leader behavior impacted the level of the emerging CFL in ways that were unique to individual leaders. Even two “good” leaders had surprisingly different impacts.

Which courses of action and levers are used by companies in the quest for renewal? Do renewal initiatives create value for the company? Can successful renewal initiatives provide models for managers committed to change, enabling them to identify certain levers that can be exploited in their own drives for renewal? This paper aims at providing answers to these questions by describing different aspects (implementation and corporate value creation perspectives) of the renewal experience conducted in 1993 by a large French electrical engineering company, Spie-Trindel. In this company, a competence building process was identified and analyzed as a driving force behind renewal. Thanks to an analysis of different performance measures (return on investment, return on equity and stock market prices) of Spie-Trindel, the competence building process was studied as a transformational leverage and its impact on the resulting value creation of the company was put into light. Moreover, this paper provides a concrete and detailed description of a specific competence building process which led the company to both alter the hierarchy of competences (see “reordering mechanisms”) and institutionalize new competences (see “institutionalization and routinization mechanisms”) within its core competence portfolio.