Industry competitiveness view of global strategy versus the resource-based view
Global strategy refers to the conscious and tactical plans laid by organisations in a bid to fit into worldwide business arena (David, 2012, p. 49). Companies have embraced different methods and views of how to exert authority and gain the upper hand in terms of competitiveness on the global platform. The two commonest approaches are the competitiveness and resource-based views of global strategy. Despite their effectiveness, both differ enormously in terms of foundational principles. More importantly, resources used to help organisations acquire a favourable state as touching global strategy can easily become weakness or liability that propels companies in the unexpected direction (Ghemawat, 2013, p. 80). This paper contrasts the competitiveness view to the resource-based approach and critically assesses the opinion that resources can actually turn into liabilities to pull organisations down, providing examples for both occasions.
While the resource-based view emphasises on the assumption that a firm can only acquire a competitive edge by maximising the resources at its disposal (Ghemawat, 2013, p. 81), scholars backing the competitive view believe that firms have to follow certain principles to achieve the same goal. Scholars from the competitive school of thought emphasise on the need to foster efficiency in terms of economies of scale geared towards access to a wider market and clientele base (Peng, 2013, p. 80). Despite arguments that both schools of thought provide similar results, practical evidence from existing organisations
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Thus institutional influences induce a certain degree of resemblance in structures and practices across organizations. Opposite to that is the resource-based view, which emphasizes an individual company’s capability to capitalize on its own internal resources and know-hows to differentiate itself from competitors in the same environment and build competitive advantage (Barney, 1991; Carmeli & Tishler, 2004; Collis & Montgomery, 1998; Wernerfelt,
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This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
A strategy, according to Robbins and Barnwell (2002, p. 139) is “the adoption of courses of action and the allocation of resources necessary to achieve the organisation’s goals”.
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