Resource Based View (RBV) and Sustainable Competitive Advantage

Resource based view (RBV) focuses on the internal factors that contribute to a firm’s growth and performance. It highlights the importance of firm’s resources and capabilities. Both of them will together form a competency that can create a competitive advantage. Resources can also be divided into tangible resources and intangible resources. Capabilities of the firm in utilizing the resources have a big impact on how a firm will be able to stand out among other competitors. Competitive advantage arises when a firm has a lower cost structure, products differentiation and niche markets. RBV also concerns in value creation in order to compete with others.… Read the rest

Strategic Thinking Dichotomies: Logical Thinking vs. Creative Thinking

It is mutually agreed that the converses of intuition and analysis generate tension during the strategic thinking process. Researchers and contributors to strategic management making the case for logic argue that for strategy to be effective, the strategic thinking process must involve extensive formal analyses and objective collection and processing of data both from within and without the corporation. Rational reasoning enables managers gain an accurate perspective on the different options available before identifying the strategic option that best serves the organization’s cause: achieving its goals and objectives. Logical analysis encompasses assessing internal and external risks, strengths and weaknesses, market need and so on; so that strategy can be thought out to fit each of the above factors.… Read the rest

Effects of Leadership and Organizational Climate on Innovation

Now more than ever, companies are putting more attention to innovation that make their products and services more competitive, thereby enable them to survive and flourish in the changeable and challenging global environment. Innovation is seen as the first attempt to carry out a new creative idea, and translate it into practice. However, it isn’t easy; it’s a difficult and complex task. There are two primary factors influencing the success of innovation: technical resources (people, equipment, knowledge, money, etc.) and the abilities in the organisation to manage these resources to encourage innovations. However, the latter is the precondition which can place high premiums on innovation.… Read the rest

What is Strategic Innovation?

Innovative thinking can be applied to the strategic planning of an organization to create new opportunities and boost market performance. Strategic Innovation is the creation of growth strategies, new product categories, services, or business models that change the market and generate significant new value for consumers, customers, and the organization. Strategic Innovation takes the road less traveled – it challenges an organization to look beyond its established business boundaries and to create possibilities in an open-minded and creative environment. It has been seen that focusing on the short-term aspects typically yields short-term results, however, firms seeking to make significant breakthroughs identify both, big and innovative ideas.… Read the rest

Stakeholder Theory and Corporate Governance

In contemporary society, business organizations are taking on an increasingly complex and significant role. Some corporate giants control vast resources and possess enormous influence in human daily life. Especially when they enter areas such as health care and education, they can have a more deep relationship and powerful impact on society. However, the nature of business activities is to pursue the best interests and it could lead to some conflicts between different stakeholders. Thus, proper corporate governance needs to be used to ensure corporates continue operating on a normal track. In theory, corporate governance is a kind of system that could direct and control companies.… Read the rest

Evaluation of Porter’s Diamond Model

In the globalization era, we observed an increment of multinational corporations as well as small businesses that aim to internationalize. Those, in order to be successful in their internationalization process, try to find abroad a location that fits them the most institutionally, culturally and opportunities wise. To make this happen, MNCs uses home and host location strategies which reflect to international business theories through different models. Those models assess external environment analysis of a specific country and explain the concepts used behind the chosen location. Out of the many useful models explaining location strategies used by international companies, this article will focalize on the Diamond Model and discuss whether is a useful concept for international firms to pursue the best entry mode and furthermore argue the advantages and disadvantages through the examination of a real case example such as the multinational IKEA.… Read the rest