David Lei

Dynamic Core Competences through Meta-Learning and Strategic Context

Traditional approaches to studying competitive advantage, while valuable, are not adequate to explain how firms can operate effectively in turbulent and often chaotic environments. A resource or skill-based view focusing on development and application of core competences is offered to supplement the traditional approaches. We present a model of the development and outcomes of dynamic core competences based on organizational meta-learning. A firm’s core competence(s) is defined as a set of problem-defining and problem-solving insights that fosters the development of idiosyncratic strategic growth alternatives. Dynamic core competences are based on the integration into systemic meta-learning of universal and tacit knowledge through information transfer, redefinition of heuristics and continuous improvement based on experimentation and the development of firm-specific skills based on dynamic routines. Dynamic core competences can be leveraged to create growth alternatives of global diversification, new applications of existing technologies and/or the development of new lines of business. Finally, dynamic core competences can be used to reduce uncertainty and to induce path dependencies that create causal ambiguity (making imitation from other firms difficult). In so doing, they can form the basis of competitive advantages.

Management practices in learning organizations

Abstract Organizational learning will become even more critical as organizations face permanent “white water.” Peter Vaill, who coined this term, indicates that, in the old days, managers could simply paddle their canoes around on calm, still lakes and go anywhere they wanted to go. Today, those same managers have hit white water, and there is no end in sight. Building learning organizations requires that leaders develop employees who see their organization as a system, who can develop their own personal mastery, and who learn how to experiment and collaboratively reframe problems. Regrettably, too many leaders focus their attention on “adaptation”—a patterned response to events based on “old programming” (to return to Zuboffs machine metaphor). Not only do they practice adaptive learning, they also reward it. In generative learning organizations, leaders and employees give up these reference points and learn to accept, embrace, and seek-not simply change-but transformation. Despite the inroads made by Japanese and other competitors into new technologies, many U.S. firms still remain on the forefront of product and process innovation in a great many industries. New industries are forming every day, while many others are converging and consolidating. These changes represent opportunities for U.S. managers bent on becoming fast and aggressive learners. Organizations that foster generative learning as part of their underlying reward system and culture are able to improve their sources of competitive advantage because mistakes are translated into valuable learning experiences. Given the fervent pace of technology diffusion and change, firms need to be able to experiment with a host of different approaches to product and process development, some of which may not be initially successful. But, given a learning orientation, all of these approaches will provide new insights that could be applied to future endeavors. Yet, generative learning in many ways works against the experience and training of managers accustomed to reward systems and cultures that foster adaptive learning. The process of “un-learning” previous mindsets is a difficult task in itself. Inculcation of such organizational features as empathy, humility, and personal efficacy are vital first steps to help the firm move away from static, risk-averse patterns of behavior to proactive, risk-taking learning.

Strategic Restructuring and Outsourcing: The Effect of Mergers and Acquisitions and LBOs on Building Firm Skills and Capabilities

A conceptual framework examining the relationship between corporate restructuring and outsourcing of key value-adding activities to external suppliers and partners is presented. The model proposes that the restructuring process serves as a catalyst to a series of complex changes within the firm that make outsourcing an attractive alternative to internal investments in the development of new skills and capabilities. High levels of merger and acquisition activity, as well as leveraged buy-outs (LBOs), are expected to produce a diminished resource base for organizational learning and technology development. Continued reliance on outsourcing, in turn, can potentially “lock out” the firm from participating in future technologies and new industries.

Building cooperative advantage: Managing strategic alliances to promote organizational learning

This study focuses on the relationship between strategic alliances and organizational learning. Building cooperative advantage requires partners to realize that the dynamics of collaboration and learning are likely to evolve over distinct stages of alliance evolution. Although alliance relationships will require different sets of managerial skills and behaviors across these evolutionary stages, there are several factors that markedly shape the firm s ability to learn over time. These include the nature of the shared business activity, the type of knowledge that is jointly developed, and the firms reward system.

Collaborative Innovation with Customers: A Review of the Literature and Suggestions for Future Research

Collaborative innovation with customers or users is increasingly important for the development of new products and services. In this paper we provide a review of the literature, placing emphasis on how firms engage in collaborative innovation with individual and business customers. Our review develops a synthesized conceptual framework from three existing models, and other streams of research, to organize this diverse body of literature. We review studies from several disciplines including innovation, strategy, management, marketing and information technology. Although much of the literature assumes net positive benefits from such collaboration, we also discuss contrary perspectives. We highlight areas in which research is needed for greater understanding of the strategic issues and for managing the collaborative process, and provide suggestions for future studies.

Industry evolution and competence development: the imperatives of technological convergence

This article examines the growing impact of technological convergence on the evolution of industry structure and the development of core competences, knowledge, and skill sets within firms. Technological convergence occurs when advances or innovations commercialised in one industry begin significantly to influence or change the nature of product development, competition, and value-creating processes in other industries. By promoting the creation of higher value-added substitute or complementary products that redefine an industrys structure, convergence may lead to competitive conditions in which one industrys products or services are increasingly linked, absorbed, or blended with another industrys expanded range of offerings. In turn, convergence leads to the steady erosion of once-distinct boundaries among industries as they begin to share more similar competitive, market-based, and technological characteristics. As industries become closer, firms need to learn and invest in new types of core competences that allow them to deploy value-creating skills and core product platforms, which can be easily reconfigured and adapted to a wider base of customers across different markets. Sustained learning of new core competences requires the cultivation of multiple dynamic routines that foster the creation of new sources of knowledge, insights, and capabilities. Internal R&D and strategic alliances with partners from a range of different industries can promote corporate strategies that enable firms to enact upon converging environments.

Offensive and defensive uses of alliances

Abstract This paper focuses on the relationship between learning, skill acquisition, and strategic alliances to build competitive advantage. In particular, we focus on how senior management can structure their alliances as learning platforms to assimilate new technologies and skills to revitalize their core operations and to find new uses for existing skills. Firms that enter strategic alliances without recognizing how to knowledge and skills form the basis for future competitive advantage are likely to lose not only their technologies and skills, but also their ability to shape future products in that industry. Co-operation or interaction with an alliance partner to enter new markets or to develop new products also leads to competition in learning new skills and insights from one another.

Computer‐integrated Manufacturing (CIM): Redefining the Manufacturing Firm into a Global Service Business

The transformation of US manufacturing, led by computer‐integrated manufacturing (CIM) systems, has already begun to take root. This article examines the potential benefits to firms which understand and can exploit CIM technology to its fullest extent. Because CIM simultaneously provides high product variety with low costs, conventional assumptions about competitive strategy and organisation design need reevaluation. As companies must work with increasingly scarce capital, human resources and time, CIM becomes an attractive option not only for highly capital‐intensive industries such as automobiles, but also for fast‐changing areas such as textiles, fashion design, and consumer appliances. CIM combines the benefits of economies of scope with the scale economies traditionally garnered only with large, rigid and dedicated factories. Success with CIM and other new manufacturing technologies depends on new organisational designs and incentives that foster fast innovation and cross‐functional integration. CIM′...

Marketing implications of newer manufacturing technologies

Recent advances in product design and manufacturing technologies allow for high levels of product variety at low cost, leading to economies of scope. Economies of scope allow for multiple product operations without the cost penalty of traditional economy‐of‐scale‐based technology. Examines the implications of flexible manufacturing for marketing strategy and organization. Shortening of product life cycles, re‐acceleration of product differentiation strategies and more customer involvement in the entire manufacturing‐to‐marketing process are some of the effects of advanced manufacturing technology on the marketplace.

In Search of Excellence Ten Years Later: Strategy and Organisation Do Matter

The Peters and Waterman framework of eight management principles, focused largely on organisational design issues, is used to examine differences between 19 “excellent” and 50 “non‐excellent” firms. Data from large United States manufacturers show that the “excellent” companies earn higher returns on capital, have less variable returns and are more innovative. They also tend to operate businesses which emphasise high value‐adding activities further downstream, closer to the final market. Twenty‐two measured items associated with the eight Peters and Waterman principles differ systematically between the “excellent” and “non‐excellent” firms. In addition, 13 measures associated more directly with strategy also differ systematically. High investment in R&D, a strong international posture, and strong market positions provide an alternative explanation to the Peters and Waterman principles for good profit and innovation performance by the “excellent” firms, thus reinforcing the need to better understand indust...