Adapting company competences

Abstract

The topic of company competences is approached by many theories in literature, each from its own perspective. In this thesis the focus is mainly on the competence-based view. The competence-based perspective claims that core competences are the source of sustainable competitive advantage, and are the unique capabilities which span over multiple products or markets. Competences are one of the several factors that can influence the competitive advantage of the firm. In its turn, competences may be dependent on many factors itself, such as the Technology Life Cycle (TLC) phase and the type of industry. In practice many of the companies involved in the process of development and diffusion fail even before their products manage to reach the mass market. Because of dynamic markets organisations are showing more interest in managing change processes within their firms. Responding to the environment by creating, leveraging, and managing competences has taken a greater role in firms’ strategic flexibility. This area in research raises many questions: Why do some firms succeed while others fail? Is the success of firms rooted in anything more than luck? Are there systematic patterns that discriminate those companies who are able to change and survive versus those that fail? How do firms adapt to their dynamic environments? And is exit and failure of a firm the same? The goal of this research is two-folded: A general list of company competences is developed and categorised which can be used in the future as a checklist; and an extensive study is conducted on how companies adapt to the environment which provides insight in competence-building. This is mainly done through literature research and qualitative meta-analysis. The developed list of company competences consists of the following main competences: Market-oriented competences; technology-oriented competences; network-oriented competences; and management-oriented competences. The literature on company’s competence adaptation leads to a division of the findings into three categories. First, there is literature claiming that firms are not able to evolve along time but replaced by new firms that better fit the changed context. Second, there is literature that claims that firms are able to cope with changing markets through evolving along time. And third, there is literature that claims that firms cope with changing markets by being ambidextrous which is a firm that both explores and exploits. There are different factors explained that influence competence-building or altering: The types of learning that a company adopts; the knowledge development and managing system; reordering and revitalising strategies; internal growth; external growth (acquisitions); strategic alliances and networking; industry-level changes; management cognitions; strategy; configurations of discipline, stretch, trust, and support; and modularity. This research will lead to theory expansion. Researchers benefit from this work as it provides an overview and analysis of the main organisational theories on this topic and in this way fills a scientific gap. This work can be used as a basis in future research which researchers can consult when for example they want to make sure they have taken the main factors into account in their research. From a managerial perspective the findings gathered in this thesis are also of value, as they provide more insight into organisational processes which will benefit the decision-making abilities of managers, and because potential tools are presented to lead firms in a dynamic environment towards enduring competitive advantage. This knowledge can be used for discussion and brainstorming on which competences their company should internalise.