ORGANIZATIONAL CORE COMPETENCE AND COMPETITIVE ADVANTAGE
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ORGANIZATIONAL CORE COMPETENCE AND COMPETITIVE ADVANTAGE
Chapter one
INTRODUCTION
1.1 Background for the Study
The tough situations we face today have required organisations to improve not only for competitiveness, but also in order to continue operating and remaining in the market.
Various academics have agreed that improved performance is the result of the process of developing a strategy through which the organisation hopes to fulfil its goal and objectives in the end.
As a result, successful performance is also dependent on the existence of each individual organization’s skills and capabilities, implying that the organization’s appropriate use of information technology may be critical in the promotion of organisational performance (Bharadwaj, 2000; Ray, Muhanna, & Barney, 2005).
Core competency is regarded to play a crucial role in the process of establishing synergy amongst strategic business divisions, particularly in large organisations such as PZ Cussons Nigeria Plc. As a result, the experimental results of the core competence will validate the superiority of competitive performance (Besle and Sezerel, 2012).
Many aspects contribute to organisational effectiveness, including communication, job procedures, team, interaction, corporate culture, dedication, climate for innovation, satisfaction, loyalty, and business environment (Lia et al., 2006).
Nowadays, the banking sector has grown in importance, particularly when compared to other sectors such as the industrial sector, which includes PZ Cussons Nigeria Plc. Because of the diversity and variety of services supplied to the public, as well as their contribution to the country’s economic prosperity.
According to a Central Bank of Iraq (CBI) study from 2012, there are 23 private banks licenced to operate in Iraq. This study’s private banks include Baghdad Bank, Commercial Bank of Iraq, Iraqi Middle East Investment, Investment Bank of Iraq, United Bank for Investment, and Dares Salaam Investment Bank, among others.
Core competences should be based on organisational capabilities and resources. Gaining market superiority is dependent on a company’s capacity to identify, create, deploy, and protect unique resources that set it apart from its competitors (Carmeli, Tishler, 2004).
Capabilities-based competition refers to a firm’s ability to maintain consistent product quality, understand changing customer wants, exploit growing markets, establish new companies, or produce new ideas and incorporate them into innovations (Stalk et al., 1992).
Torkkeli and Tuominen (2002) define capabilities as an organization’s ability to utilise its resources. Capabilities determine how resources are used. As a result, a company decides which skills or capabilities will set it apart in the future (Hamel, Prahalad, 1994).
For example, the secret to Wal-Mart’s success versus its rival, Kmart, which was previously a market leader in the retailing business, is a constant focus on meeting consumer wants, maximising the benefits of cross-docking, and, ultimately
its human resource system (Stalk et al., 1992). This study intends to analyse organisational core competence and competitive advantage using a case study of PZ Cussons Nigeria Plc.
1.2 Statement of Problem
Skills and technique knowledge, which are an organization’s core competencies, are utilised to create competitive strategies that are unique to that organisation. As a result, core competence has made a large contribution to the final product, offered access to multiple markets, and made it tough for competitors to replicate.
PZ Cussons Nigeria Plc gains competitive tactics as a result of specialisation inside the organisation. Core competency is a term used to describe collaborative efforts in organisations that control the actions of several individuals with distinct skills and capabilities.
In such a competitive climate, businesses utilise a variety of strategic techniques to obtain market leadership and hence a competitive edge. Some companies, such as PZ Cussons Nigeria Plc, are revisiting their internal procedures and capabilities in order to improve their goods’ consistency and efficiency.
PZ Cussons Nigeria Plc relies heavily on core capabilities to counter competition strategies. The way an organisation utilises its core capabilities has a significant impact on its overall performance.
Customers’ perceptions of organisational value addition and their comparisons of available products and services are heavily influenced by the pursuit of competitive advantages.
As a result, management at PZ Cussons Nigeria Plc must evaluate its core capabilities. However, none of these studies focused on the manufacturing industry, such as PZ Cussons Nigeria Plc, to establish how the organisation has incorporated the core competence concept into its operations and procedures.
There is a need to do a thorough investigation of organisational core competence and competitive advantage in the manufacturing business, such as PZ Cussons Nigeria Plc.
1.3 Research Objectives
The broad or major goal of this study is to evaluate organisational core competence and competitive advantage through a case study of PZ Cussons Nigeria Plc. The precise aims include:
i) To explore the influence of organisational core competencies on their competitive advantage.
ii) To investigate why PZ Cussons Nigeria Plc engages in organisational core competencies for competitive advantage.
iii) Determine the prevalence of organisational core competencies and competitive advantage in PZ Cussons Nigeria Plc.
1.4 Research Questions.
The following are some of the questions that this study aims to answer:
i) How does an organization’s core expertise affect its competitive advantage?
ii) What are the reasons why PZ Cussons Nigeria Plc invests in organisational core competencies to gain a competitive advantage?
iii) Determine the prevalence of organisational core competence and competitive advantage at PZ Cussons Nigeria Plc.
1.5 Research Hypotheses.
The following hypotheses were proposed to guide the conduct of this investigation.
i) Competitive Strategy is unaffected by Core Competence.
ii) Core Competence does not effect corporate performance.
1.6 Significance of the Study
This study contributes to the resource-based theory by adding a new dimension to the resources that can be put to good use while gaining competitive advantage. The resource-based approach focuses on the organization’s internal strengths but does not address the distribution strategies that might be used to maximise such strengths.
This study is vital for insurance companies since it will allow them to identify core capabilities, areas for investment, and how to improve on them in order to get a competitive advantage.
Insurance managers will receive insight into the competitiveness of their core competencies and identify strategies to redesign them in order to obtain a competitive edge by leveraging their own identified core competencies.
This study will also be valuable for insurance marketers since it will allow them to uncover competitive internal organisational competencies that will help them continue organic growth and ensure optimum client retention.
The research will be an essential resource for organisations, particularly in developing regulations to assist the industry towards the development of excellent business practices, healthy competition, and strong corporate governance.
If the industry regulator can focus on what the best companies are doing to stay competitive and profitable, they may be able to implement sound laws to ensure that businesses are not simply imitating one another. They may be able to ensure that all businesses focus on what they are best at.
1.7 Scope of Study
This survey will be conducted among the employees of PZ Cussons Nigeria Plc in Lagos State, Nigeria.
1.8 Limitations of the Study
The time constraint was a limiting element because the investigation needed to be completed quickly. The availability of funds was also a constraint on the study because the researcher is self-funded.
There was no guarantee that respondents would return all completed questionnaires, nor that those who would be interviewed would fully respond to all of the questions posed to them for fear of exposing their noncompliance to the organisation.
To address these limitations, the researcher took time off work to interview the respondents and sought funding from relatives. The staff’s concern of involvement was alleviated by describing the goal of the study and providing the transmittal letter, as well as the supervisor’s contact information for verification purposes.
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