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...in understanding about the concept and its implementation as root causes. Review of competitiveness-related literature, by classifying it at three levels, clearly indicated the importance of the firm level. The focus of this paper is on review of literature at the firm level and study of competitiveness-related frameworks and models. The studies are further classified on the Asset-Processes-Performance (APP) framework. Key criteria and sources of competitiveness at the firm level are synthesised and depicted graphically as connotations of competitiveness. Select frameworks and models of competitiveness were reviewed and categorized. A sample matrix that can help select frameworks and models is demonstrated. Utility of the APP framework as a tool for integration competitiveness and strategy is explored.
Key words: Competitiveness, Strategy, Firm, Competitiveness process, Sources of Competitiveness, Flexibility, Frameworks and Models.
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The 21st century seems to have begun with events indicative of the turbulence, challenges and opportunities ahead. Excesses during long economic boom in America surfaced with the dot-com crash. The attacks of September 2001 and the collapse of giants such as Enron and WorldCom have shaken confidence in business. With Japan passing through a decade-long painful transition, two biggest economies of the world are in poor shape.
Survival and success in such turbulent times increasingly depend on competitiveness. Competitiveness has been described many by researchers as a multidimensional and relative concept. The significance of different criteria of competitiveness changes with time and context. Theories and frameworks must be flexible enough to integrate the change with key strategic management processes if their utility is sustained in practice.
While there are many theories about competitiveness and related interdisciplinary fields of strategy, operations, resource-based view (Barney, 2001), and economics, they are not used widely by practitioners in their decisions for enhancing or sustaining competitiveness. Research efforts have brought many interesting perspectives and frameworks at the country, industry, and firm level. The popularity of the competitiveness benchmarking at the country level such as Global Competitiveness Reports, World Competitiveness Yearbooks, and National Competitiveness Reports is an indicator of growing interest in comprehensive frameworks and data for competitiveness-related decision-making. Research into issues of industry-level competitiveness confirmed importance of processes in enhancing competitiveness (Momaya, 1998). At the firm level, theories are many, but they have little relevance to help practitioners who use them rarely. Nonaka et al (2000) have also highlighted limitations of traditional theories and need for a new theory.
Efforts to understand the problems of the slow competitiveness journey in context of the software industry in India identified low clarity about the competitiveness concept and weak integration of competitiveness processes with traditional processes, especially the most important strategic management process. Most companies are organised on functional lines such as marketing, finance, operations, and have narrow views about their contribution to the competitiveness of the whole organisation. Competitiveness comes through an integrated effort across different functions and hence, has close linkage with strategy process. Let us look at some basic definitions to improve clarity of the discussion.
Definitions
Competitiveness is a multidimensional concept. It can be looked at from three different levels: country, industry, and firm level. Competitiveness originated from the Latin word, competer, which means involvement in a business rivalry for markets. It has become common to describe economic strength of an entity with respect to its competitors in the global market economy in which goods, services, people, skills, and ideas move freely across geographical borders (Murths, 1998).
Firm level competitiveness can be defined as the ability of firm to design, produce and or market products superior to those offered by competitors, considering the price and non-price qualities (D'Cruz, 1992).
Competitiveness processes are those processes, which help identify the importance and current performance of core processes such as strategic management processes, human resources processes, operations management processes and technology management processes. The competitiveness process can be viewed as a balancing process that complements traditional functional processes such as operations management and human resources management. It enhances the ability of an organisation to compete more effectively. Key constructs of competitiveness and...
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