Process orientation and core competence management [Elektronische Ressource] : the contribution of the process oriented core competence management to the integration of the market based view and the resource based view / vorgelegt von Fábio Walter
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Process orientation and core competence management [Elektronische Ressource] : the contribution of the process oriented core competence management to the integration of the market based view and the resource based view / vorgelegt von Fábio Walter

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Process-Orientation and Core Competence Management – The Contribution of the Process-Oriented Core Competence Management to the Integration of the Market-based View and the Resource-based View Von der Fakultät für Wirtschaftswissenschaften der Technischen Universität Chemnitz genehmigte Dissertation zur Erlangung des akademischen Grades Doctor rerum politicarum (Dr. rer. pol.) vorgelegt von Fábio Walter geboren am 12.06.1972 in São Sebastião do Caí – Brasilien eingereicht am: 05.Mai.2008 Gutachter: Prof. Dr. Uwe Götze Prof. Dr. Dr. h.c. Jürgen Bloech Prof. Dr. Peter Schuster Tag der mündlichen Prüfung: 30.Juni.2008 ii Gedruckt mit Unterstützung des Deutschen Akademischen Austauschdienstes (DAAD) iii To my parents ivAcknowledgement The present work is the result of not only my personal effort, but also of the support from many people, who I intend to thank now. It is unfortunately impossible to mention everyone here; however I would like to stress some names. Initially, the scholarship provided by the program “CAPES - DAAD” was fundamental to realize this research and I thank both institutions very much for that. Especially at DAAD, I would like to thank Ms. Maria Salgado, who was a very helpful contact person in countless situations.

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Published 01 January 2008
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Process-Orientation and Core Competence Management

The Contribution of the
Process-Oriented Core Competence Management
to the Integration of
the Market-based View and the Resource-based View


Von der Fakultät für Wirtschaftswissenschaften der
Technischen Universität Chemnitz
genehmigte
Dissertation zur Erlangung des akademischen Grades
Doctor rerum politicarum (Dr. rer. pol.)

vorgelegt von

Fábio Walter

geboren am 12.06.1972 in São Sebastião do Caí – Brasilien


eingereicht am: 05.Mai.2008

Gutachter: Prof. Dr. Uwe Götze
Prof. Dr. Dr. h.c. Jürgen Bloech
Prof. Dr. Peter Schuster

Tag der mündlichen Prüfung: 30.Juni.2008

ii
















Gedruckt mit Unterstützung des
Deutschen Akademischen Austauschdienstes (DAAD) iii































To my parents
iv
Acknowledgement

The present work is the result of not only my personal effort, but also of the support from
many people, who I intend to thank now. It is unfortunately impossible to mention everyone
here; however I would like to stress some names.
Initially, the scholarship provided by the program “CAPES - DAAD” was fundamental to
realize this research and I thank both institutions very much for that. Especially at DAAD, I
would like to thank Ms. Maria Salgado, who was a very helpful contact person in countless
situations.
With regards to our institution here, I would like to thank my Doktorvater, Prof. Dr. Uwe
Götze, who supported me at all times, since the application for the scholarship and hence has
played an extremely important role in the development of this work. Not only as a scientific
advisor, Prof. Dr. Uwe Götze was also a friendly partner for non-academic discussions.
Furthermore, have my research activities been helped by the friendly relationship to the staff
members of “our” chair BWL III (Unternehmensrechnung und Controlling). Equally
important was the also close relationship with the team of chair BWL I
(Betriebswirtschaftliche Steuerlehre und Wirtschaftsprüfung). To all of you, former or
current staff members, I want to say my sincere thanks for all the support during my time in
Chemnitz.
My true and deep appreciation of their valuable evaluations also goes to the examiners of my
thesis, Prof. Dr. Dr. h.c. Jürgen Bloech (Georg-August-Universität Göttingen) and Prof. Dr.
Peter Schuster (Fachhochschule Schmalkalden). Moreover, I am also grateful to PD Dr.
Silke Hüsing for her participation on the defence and oral examination.
During my time in Chemnitz I have had the opportunity to win several friends, who
supported me in many ways and will remain forever in my personal circle. This is also true
for the different departments of the TU Chemnitz to which I have had regular contact with
and who provided much help for all my needs. To all of you my heartfelt thank you.
Similarly, in this time, many others in Brazil helped me in some way else. The impulse to
the present research emerged from discussions with Prof. Francisco José Kliemann Neto
(UFRGS), who stimulated me to follow this academic path. Moreover, former research and
work colleagues at UFSC and UNIVALI played a very important role, not only before but
also during this doctorate study. I thank you all very much. v
Finally, I want to acknowledge here the very important participation of Ms. Isabel Heller and
my family. You all provided me with the crucial assistance and encouragement necessary to
have developed this research the way I have been able to and I dedicate my deepest thanks to
you. vi
Content

List of Figures ..........................................................................................................................xi
List of Abbreviations.............................................................................................................. xv

1. Introduction.......... 1
1.1 Problem and Motivation of this Work.................................................................. 1
1.1.1 Strategic Management and its Views of Competitive Advantage ....... 1
1.1.2 The Strategic Role of Process-Orientation ............................................. 3
1.2 Objectives and Structure of the Work 4
1.3 Research Contextualization................................................................................... 5
2. Strategic Management and the Views of Competitive Advantage................................... 7
2.1 Basic Definitions ..................................................................................................... 7
2.1.1 Strategy 7
2.1.2 Strategic Management............................................................................. 9
2.1.3 The Evolution of the Strategic Thinking ............................................. 12
2.2 Strategic Planning................................................................................................. 13
2.2.1 Emergence .............................................................................................. 13
2.2.2 The Experience Curve........................................................................... 14
2.2.3 The PIMS Database............................................................................... 16
2.2.4 The Growth-Share Matrix .................................................................... 17
2.2.5 Criticism on the Tools and Practice of Strategic Planning ................ 21
2.3 The Market-based View....................................................................................... 22
2.3.1 The Structure-Conduct-Performance Paradigm................................ 22
2.3.2 The Five Forces of Porter...................................................................... 24
2.3.3 Generic Strategies.................................................................................. 27 vii
2.3.4 The Value Chain .................................................................................... 30
2.3.5 Criticism on the MBV............................................................................ 32
2.4 The Resource-based View 34
2.4.1 Historical Origins................................................................................... 34
2.4.2 Classification and Terminology............................................................ 37
2.4.3 The two Schools of the RBV.................................................................. 39
2.4.3.1 The Structural School.............................................................. 39
2.4.3.1.1 The Cornerstones of Competitive Advantage........ 40
2.4.3.1.1.1 Resource Heterogeneity ............................ 40
2.4.3.1.1.2 Ex post Limits to Competition.................. 40
2.4.3.1.1.3 Imperfect Resource Mobility.................... 43
2.4.3.1.1.4 Ex ante Limits to Competition ................. 43
2.4.3.1.2 The VRIO Framework ............................................ 45
2.4.3.1.3 The Static Approach................................................. 46
2.4.3.2 The Process School.................................................................. 49
2.4.3.2.1 The Dynamic Approach ........................................... 49
2.4.3.2.2 Core Competences..................................................... 50
2.4.3.2.3 Dynamic Capabilities ................................................ 53
2.4.3.3 Comparison of the Schools 55
2.5 Looking for a Complementary Perspective of the MBV and the RBV ........... 57
2.5.1 Comparing the Two Views.................................................................... 57
2.5.2 Towards Integrative Approaches......................................................... 60
2.5.2.1 Considerations on Strategy Formulation.............................. 61
2.5.2.2 The Use of Frameworks to Integrate the MBV and the RBV 62
2.5.2.3 Linking Elements .................................................................... 64 viii
2.6 Chapter Summary and Perspectives................................................................... 65
3. Process-Orientation and Strategy...................................................................................... 67
3.1 The Evolution of Process Thinking..................................................................... 68
3.1.1 Three Phases of Organizational Research........................................... 68
3.1.2 The Process Organization ...................................................................... 69
3.1.3 The MIT Studies .................................................................................... 70
3.2 Changing to a Process-View ................................................................................ 71
3.2.1 Reasons ................................................................................................... 71
3.2.2 Characterizing Processes ...................................................................... 75
3.2.2.1 Definitions 75
3.2.2.2 Classifications.......................................................................... 78
3.2.2.2.1 Core and Support Processes ..................................... 78
3.2.2.2.2 Operational and Management Processes................. 79
3.2.3 Structuring the Process-oriented Organization.................................. 80
3.3 Process Management............................................................................................. 82
3.3.1 Definitions............................................................................................... 82
3.3.2 Process Improvement.............................................................................. 84
3.3.3 Process Reengineering............................................................................ 86
3.3.4 Combining both Approaches ................................................................ 89
3.4 Processes and Strategy ......................................................................................... 92
3.4.1 Processes, Structure and Strategy Formulation ................................. 92
3.4.2 Management Approaches and Strategy Formulation and
Implementation ............................................................................................... 94
3.4.3 Processes and Operations Strategies.................................................... 96
3.4.3.1 Operations Strategies.............................................................. 96 ix
3.4.3.2 Looking for Links between Processes and Operations
Strategies.............................................................................................. 99
3.5 Summary and Partial Conclusions ................................................................... 102
4. Core Competence Management and Process-Orientation .............................................. 104
4.1 Conceptual Characteristics of Core Competences............................................ 104
4.1.1 The Original Concept of Hamel and Prahalad ................................. 104
4.1.1.1 Getting the Future First: Justifying the Competition on
Core Competences.............................................................................. 104
4.1.1.2 Characterizing Core Competences....................................... 108
4.1.1.3 Summarizing the Concept of Prahalad and Hamel ........... 111
4.1.2 Extended Concepts of Core Competence............................................ 113
4.2 Looking for Process-Orientation in Core Competence Management .............. 119
4.2.1 Why to Look for Process-Orientation................................................. 120
4.2.2 The Tasks of Core Competence Management by Hamel and
Prahalad......................................................................................................... 121
4.2.3 The Cycle of Core Competence Management by Krüger and Homp. 125
4.2.4 The Contribution of Hinterhuber et al. ............................................. 131
4.3 Summary and Partial Conclusions ................................................................... 134
5. A Proposal to Integrate Process-Orientation into Core Competence Management ..... 136
5.1 Structuring the Relationship “Core Competences - Processes”...................... 136
5.1.1 Introduction: the Look for Interfaces between Core Competences
and Processes................................................................................................. 136
5.1.2 Linking Capabilities and Processes.................................................... 138
5.1.3 Linking Core Competences and Processes through Capabilities ..... 143
5.2 Integrating Process-Orientation and Core Competence Management ............ 146 x
5.2.1 Step 1: Identification ........................................................................... 147
5.2.2 Step 2: Building.................................................................................... 155
5.2.3 Step 3: Integration and Application................................................... 164
5.2.4 Step 4: Protecting and Improvement................................................. 171
5.3 Evaluating the Contribution of Process-Orientation ....................................... 175
5.3.1 Evaluating the Relationship Frameworks ......................................... 177
5.3.2 Process-Orientation in the Model of Core Competence Management 177
5.4 Chapter Conclusions .......................................................................................... 183
6. Summary, Conclusions and Recommendations ............................................................ 185
Bibliographic References..................................................................................................... 191