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Main goal of identifying resources is not to know their value but to identify their potential → info on the resource characteristics needed. Opportunities for resources & can they be used more productive (resource economies) or more profitable (resource deployment)? → Intangible Resources: more valuable but mostly invisible on financial sheets → major cause of different market & book values. Brand name & trademarks = reputational asset = important intangible asset. Technology & intellectual property (patents) are also intangible assets; poor intellectually owned technology is a problem. For technological companies the most important resource they own. Profit potential for intangible assets: extend the scope of products to the extent that the intangible assets can be exploited (Nike: shoes → sportswear). Downloaded by Veronica Celada ([email protected])lOMoARcPSD|2074931
→ Human Resources: skills & productive effort offered by employees. Are resources ‘cause they are stable → employees mostly stay long-term. Effort to appraise HR: hiring stage, performance reviews & career planning. Competency Modeling = identifying the skills, knowledge etc (competencies) that are needed for superior performance on a particular job & assessing every employee against that profile. emotional intelligence is also critical; hire for attitude, train for skills. Organizational Culture = intangible resource → can be very valuable.Identifying Organizational Capabilities organizational capability = ability to deploy resources for a desired end result. (=competence). distinctive competences = capabilities that can be a basis for competitive advantage. → Core competencies (Prahalad & Hamel): capabilities fundamental to strategy & performance: 1.make a disproportionate contribution to ultimate customer value or to the efficiency with which this value is delivered 2.provide a basis for entering new markets. Prahalad & Hamel criticize US firms for emphasizing products over capabilities → global leaders are the ones that develop core competencies over long-term. Learn from successes & failures of products & develop capabilities. Two approaches for classifying & disaggregating firm’s activities:→ Functional analysis: identifies capabilities within each of the firm’s functional areas. → value chain analysis: sequential chain of main activities a firm undertakes; distinction between support (the horizontal) functions & primary functions (vertical). The support functions are horizontal ‘cause they are used & needed in every stage of the primary functions (throughout the whole process). For more detailed information: disaggregate the broad functions in the value chain. (Value chain: page 123) Hard to capture capabilities into the value chain (where they are located & identifying them). Capabilities depend on routinizition →organisational routines= regular & predictable behavioral patterns comprising repetitive patterns of activity → fundamental building blocks of firms’ activities & their identity → adaptation & replication of routines causes firms to develop. Hard to remember rarely used routines → tradeoff between efficiency & flexibility.