Modern businesses have acquired a level of success in their individual fields because they have demonstrated higher value to their clients. This edge over the other players in the field translates to their competitive advantage. However, the current demands of the market do not only require one to achieve its individual competitive advantage, one must learn to sustain it. The problem in this scenario is that sustaining such an advantage is never an easy task. Elements from the environment will always be affecting the operations of any organisation. These may come from the internal environment or from the external environment. The good news is that organisational studies have continuously sought to improve the existing conditions of the modern company and allow it to easily adapt to its immediate environment. This study will be specifically discussing these measures on which an organisation is able to sustain its competitive advantage. To provide some semblance of coherence, the major points pertaining to the main topic will be discussed separately. Specifically, the arguments and observations pertaining to the internal and external aspects of the environment will be pointed out individually. Consequently, a summation of these discussions will be done and integrate it as a foundation of the conclusion for this paper. Moreover, to support the arguments and observations made by this paper, past and existing literature on the topic of organisational development and management will be used.
For the modern organisation, organisational development is one of the best tools not only for achieving success but also for maintaining competitiveness in the industry. (Bailey and Palmer 2005, 11) In general, this type of development influences both the internal and external environments of the organisation. With the expected and unanticipated changes in the current volatile environment, improving the faculties of the organisation is nothing less than imperative.
The internal environment is no less volatile that the external environment. Early studies have noted that managing the internal environment will establish a much stronger front in battling the demands of the external environment. However, that claim varies for every type of organisational theory. One of the major theories of organisational change is strategic management. The foundation of this theory is anchored on the principles of planning. In the 50s, strategic management believes that long-term planning is the key to sustaining an advantage over the other players in the industry. (Drejer 2002, 2) This shows the early belief that stability through using a simple and expanding situation goes a long way in organisational development. Thus, the strength of the company relies highly on the strength of the plan. In the 60s and early 70s, strategic management focused more on strategic planning. In this perspective, proper economic management, marketing, and product management has been the key elements. (Drejer 2002, 3) In this point of view, the satisfaction of the consumer and the consequent profit yields are held highly. The third perspective on strategic management is held closely to competitive advantage. In this school of thought, elements like market share, market position, and strategic plans spell the necessary ingredients for success.
Another element that seeks to improve and consequently maintain the competitive advantage of the company is through its leadership styles imposed in the organisation. Recent studies have maintained that the most strategic position in the company is held by the managers. The study of Huy (2002) reinforces this claim as they are the ones who deal directly with the top management and the rank and file. In the same manner, they are the ones who could help the management to determine the exact culture present in the organisation. In the same manner, they are the ones required to determine which type of leadership style would fit the needs of the company and complement the existing culture in the organisation. (Laclair and Rao 2002, 17) This is seen in the case of Procter & Gamble where the authoritarian manner of leadership was booted as the organisation preferred participative leadership. (Madapati 2003) In this regard, its long-term plan has become much closer to its realisation.
Organisational studies have incessantly provided the empirical data pertaining to the importance of organisational culture. Specifically, recognition of the culture as well as the fit it requires with reference to the necessary initiatives of the organisation is one of the age old principles in modern businesses. These set of accepted beliefs is noted by Markoczy (1994, 5) as the cultural web. This web is the interrelation of stories and routines meshed with the organisational structure and the control systems of the company. In determining the type of culture that an organisation possesses, the more likely that the management is able to determine the possible initiatives to address any changes in the internal environment brought about by the external environment.
In any endeavour towards development, change is an inevitable subject. However, early accounts of organisation dealing with change show their predilection to guesswork. In the realm of modern business, one could not afford to take on change initiatives haphazardly. Aside from significant financial loss, the competitive advantage of the organisation is at stake. (Zahra, Nielsen, Bogner 1999, 169) Specifying the where, how, and when in organisational change will take place is necessary to minimise the losses and ensure that the ends of development will actually take place.
Moreover, it must be emphasised that change management is entirely based on the cultural element of the organisation. As Brewer, Juras, and Brownlee (2003, 49) puts it, the implications of managing change depend largely on the level on which the employees will be resisting these change initiatives. Thus, in order to induce change and effectively achieve the needs of the company, attempts to lessen this level of resistance are the key. For instance, Carroll and Arneson (2003, 35) mentioned in their work that involving the workforce by empowering them in the change process will lessen the resistance level in the organisation. In the same manner, determining the proper way of handling the workforce will also add up to the success rate of the change management initiatives of the firm. (Huy 2002) In addition, the communication of the change in the organisation is equally important. (Lerro and Schiuma 2005, 585) The employees have to be aware of the courses of action and the management should practice transparency by opening up the communication lines. In this regard, feedback is easily acquired and certain adjustments are readily implemented in the change process.
One of the more recent and most frequent endeavours of the modern organisation to sustain its competitive advantage is by integrating computer processes and its operations through automation. (Alsense, 1994, 657) Recent studies even characterised the automation of the modern organisation as a ubiquitous phenomenon as almost every type of company, from manufacturing to agriculture, are taking on automation efforts. (Lee and See, 2004, 50) This shows that the promised consequences of efficiency and convenience in the operations of the modern organisation have been highly regarded by companies. Other benefits of automation is seen in the work of Lucas and Olson (1994, 157) indicating that the use of IT in the operations of the company eliminates significant barriers that are usually encountered in a daily basis. It basically bestows the company flexibility in dealing with possible crises and allows a faster reaction rate for the organisation. With the anticipated quicker access to information, the infusion of IT technologies also opens the door of the organisation to numerous possibilities. (Scerbo, 1999, 11) However, to maximise these possibilities, the company must be able to acquire a significant level of knowledge regarding the technology. Otherwise, the company will inevitably incur significant losses.
It is important to point out that automation is not entirely milk and honey. It also provides significant risks for the company. For instance, Tapang (2002, 46) mentioned that possible resistance is almost always anticipated in instances where automation is proposed. Moreover, there has been early studies that indicated the propensity of people to naturally feel intimidated by new technology. (Aiken, Krosp, and Vanjami 1995, 38) In the area of the organisation, this may be because of the required skill levels in operating such technologies. (Kacmar, McMahan, and Wright 1997, 104) On the part of the management, once they have taken on automation initiatives, it is required upon them to continuously train their workforce and incessantly find ways to improve the existing technology in the organisation. (Gilsdorf, 1998, 173)
The external environment, on the other hand, is the part of the organisation which involves the consumers and the marketing operations of the company. One element that should be given importance by the organisation to sustain competitiveness is the behaviour of the consumers. Jacoby, Johar, and Morrin (1998, 49) consider consumer behaviour as the amalgamation of consumption and dispositions pertaining to products and services of a particular company. This means that consumer behaviours rely largely on the factors affecting the decision making of the consumers. It could easily be labelled as one of the major concepts in the theories involving marketing. (Haugtvedt, Petty, and Cacioppo 1992, 239)
Major considerations in determining the behaviour of the consumer involves the personality of the consumer and the product. In the context of consumer personality, theories of Veblen pertaining to consumerism are frequently cited. (Schleuning 1997, 128) In the same manner, the theory of Hofstede pertaining to culture has also been used to determine the personality of the consumer. (Dawar, Parker, and Price 1996, 497) In the context of product personality, these intimate the realisation of what the consumers need, particularly of the local market. (Julian 2003, 213) In the study of Kim and Chung (1997, 361), they pointed out elements like brand popularity and country image as key ingredients in having effective product characteristics. In any case, these elements add up to the overall attractiveness of the product. (Ealy and Troyano-Bermudez 1996, 62)
Making the product and service attractive to the consumer is essentially for providing brand loyalty for the organisation. Increasing the value of the product or the service renders higher rewards for the company. (Kim and Chung 1997, 361) One sure thing that comes out of brand loyalty is the positive effects on the company’s market share. (p 361) This means that as a set of loyal consumers is created, then it is assumed that the market share of the company has improved. In the same manner, it also means that the company will have to work even harder to maintain this newly acquired level of market share. Kim and Chung (1997, 361) observed that a clear-cut formula in obtaining brand loyalty is by providing the public with a level of convenience. With a little touch of differentiation, consumers will be lining up to acquire the company’s product or service. This is seen frequently in the industries where innovation and technology are esteemed elements of their products. Companies like Nokia and McDonalds have mastered this process of innovation and differentiation and thus amassed a good number of followers all over the world.
These said multinational companies basically followed another model to consider in international business. This is the paradox of internationalisation and localisation. This is mentioned in the article of London and Hart (2004) where they maintained the notion of native capability. On the whole, it pertains to the requirement for market research for organisations that are determined to work in the international stage. Particularly, an extensive evaluation of the particular elements that would consent the company to discover the ideal marketing mix of a particular state is needed at this point in time. Again, a complementary fit with the internal environment will have to be at hand with the market to create a firm clench on the market. (Melawar and Saunders 1999, 583) This makes up the concern of the existing principles and social institutions of the individual states that the business means to infiltrate. For example, there are sacred standards in some countries that forbid the individuals to devour certain products like dairy and pork. It is in this circumstance that global companies have a tendency to regulate their individual processes with these states.
Seeing the arguments above, it seems that the paradox could be employed in agreement of multinational organisation. In order for this to work out, proper data should be acquired initially to seal the deal. Research on the particular behaviour of the consumers in the target state should be done. To illustrate, there are certain states that the price of the products or services are given preference by the consumer. (Nachum and Wymbs 2005, 415) Similarly, there are certain countries that place high esteem on the brand of the product or the reputation of the company. Regardless, the company have to take in all these information in order to realise what type of action they are to implement. It is these type of research that infallible strategies are made.
This forms the fact that information is very important for organisations. It is necessary if they anticipate success in their international endeavours. More decisively, it has proved the fact that success will be attained simply by being intimately familiar with the environment on which it seeks to operate. As Brouthers and Nakos (2005, 363) mentioned in their article, it is the capacity of the organisation for market research that will diminish the uncertainties on the potential rank of the company.
With these data coming from market research, the business is capable of recognizing the likely changes on their branding strategies and marketing decisions in certain states. This provides an ideal logic as this procedure entails a methodical and technical manner of foreseeing the development of the market. (Vredenburg and Westley 1999, 239) Fundamentally, this will not simply guarantee the organisation with an excellent market position, but also promise that the company will be capable of maintaining that competitive advantage for an extremely long period.
Other studies claimed that organisations could employ market research schemes to employ segmenting initiatives for the global market. (Craft 2004, 40) This shows that by means of this market research, branding strategies could be created derived from the segmentation of particular markets into groups. This will deal with the demands of consumers that show similar behaviours and purchasing patterns. All things considered, this procedure offers the business an image of a certain market’s pleasant appearance with particular focus on the potentials and flaws of the market regarding the resources of the company. It is this collection of data that sets up the tools for the organisation in tackling the demands of running an international business.
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