The ability of certain companies being more successful in innovations resulted in a broad academic discussion and did not find an end yet. On the one hand, academics are convinced that the ability of being innovative lies anywhere within the organization, on the other hand there persists a strong belief that the ability depends on the markets and the fit with the firm’s strategy.
It is known that innovations are of fundamental importance for the development, improvement and prosperity of economies and firms. According to Schumpeter innovations represent corporate achievements and a creation and enforcement process of new combinations, whereby a “creative destruction” of the economical equilibrium is caused. Consequently, a considered need for change and the ability to enforce and support this change is required to lead to successful innovation.
In my study I want to derive the well-spring of firm’s success, focusing on the internal perspective of the company. The resource based view provides the theoretical concept, leading to the advanced approach to display firm’s competences as a source of economic welfare. The importance of competences to build innovations comes clearly into mind, since the innovation process is very intangible and abstract, yet you need competences to organize, combine and deploy the tangible and intangible input factors to build innovations.
Table of Contents
Introduction
A. Theoretical Concepts of Achieving Sustainable Competitive Advantages
A. I. Market Based View
A. II. Resource Based View
A. III. The Importance of Innovations for a Firm’s Prosperity
B. Competences in Organisations
B. I. Definitions of Competences
B. II. Identifying Competences
B. III. Functions of Competences
B. IV. Development of Competences
B. IV. 1. Exploiting Competences
B. IV. 2. Exploring Competences
B. IV. 3. Leveraging Competences
B. V. Measuring the Effects of Organizational Competences for Firm’s Success
C. Competences, Innovation and Firm Renewal
C. I. Functions of Competences for Innovations and Firm Renewal
C. II. Dysfunctions of Competences for Innovations and Firm Renewal
C. III. How to Manage and Overcome Competence Rigidities
C. III. 1. Dynamization of Organizational Competences
C. III. 2. Criticism of the Dynamic Capabilities Approach
D. Results and Further Discussion
Research Objectives and Key Topics
This study aims to derive the fundamental drivers of firm success by focusing on an internal, resource-based perspective, specifically examining how organizational competences facilitate innovation. The research explores the complex relationship between maintaining existing competences and the necessity of renewing them to navigate dynamic, competitive market environments effectively.
- The theoretical underpinnings of sustainable competitive advantages via resource-based and market-based views.
- The definition, identification, and development of organizational competences.
- The critical role of innovation in firm prosperity and organizational renewal.
- The phenomenon of competence rigidities and the "dysfunctional flipside" of established abilities.
- Strategies for managing and dynamizing competences through concepts like dynamic capabilities.
Excerpt from the Book
C. III. How to Manage and Overcome Competence Rigidities
The following citation by Dougherty gives a demonstrative insight in how to manage the process of overcoming competence rigidities:
“The incompetences were detached and abstracted from practice, representing an historical practice that did not relate to current experience. Another part of the dynamic was how difficult it was for successful innovators to break out of the incompetences before they could use the competences. This suggests that the core incompetences had, metaphorically speaking, ‘grown over’ the core competences like vines, trapping them and in some cases hiding them. The incompetence had to be ‘hacked back’ before the competence could be accessed. At the same time, the failed innovators fell quite easily into the incompetences, and were not particularly aware that the incompetence hurt their efforts.”51
As seen above there is a possibility to overcome these rigidities by exploiting/exploring competences. As previously mentioned, Danneels identified the second-order competence as “competence at explorative learning”, a kind of meta-competence, which helps firms to dissolve the dysfunctions these competence rigidities may constitute.52
Summary of Chapters
Introduction: Outlines the research focus on the internal origins of firm success and the critical role of innovation as an abstract, intangible process.
A. Theoretical Concepts of Achieving Sustainable Competitive Advantages: Analyzes the market-based and resource-based views as primary frameworks for understanding strategic behavior.
B. Competences in Organisations: Provides definitions, identification methods, and explores the development and measurement of organizational competences.
C. Competences, Innovation and Firm Renewal: Examines how competences drive innovation while addressing the risks of rigidities and the need for dynamic capabilities.
D. Results and Further Discussion: Synthesizes the findings, highlighting the necessity for a differentiated approach that balances historical competence with the needs of dynamic markets.
Keywords
Competences, Innovation, Resource Based View, Market Based View, Firm Success, Sustainable Competitive Advantage, Competence Rigidities, Dynamic Capabilities, Organizational Renewal, Exploitation, Exploration, Leveraging Competences, Core Competence, Incompetences, Strategic Management
Frequently Asked Questions
What is the primary focus of this study?
The study focuses on the internal perspective of companies, investigating how organizational competences serve as the well-spring of firm success and facilitate innovation.
What are the central thematic fields covered?
Key topics include the resource-based view, the importance of innovations for firm prosperity, the development and measurement of competences, and the management of competence rigidities.
What is the core research objective?
The research seeks to understand the correlation between organizational competences and firm success, specifically how firms can leverage and renew competences to thrive in dynamic environments.
Which scientific methods are utilized?
The work utilizes a theoretical analysis of existing strategic management literature, incorporating empirical studies (such as those by Henderson and Cockburn) and theoretical models from authors like Schumpeter, Porter, and Danneels.
What does the main body of the work address?
The main body systematically explores definitions of competences, the dichotomy of exploiting versus exploring resources, the functional and dysfunctional aspects of competences, and approaches for dynamization.
Which keywords best characterize this work?
Key terms include Competences, Innovation, Resource Based View, Dynamic Capabilities, and Competence Rigidities.
What is meant by the "dysfunctional flipside" of competences?
It refers to the phenomenon where previously successful competences become "core rigidities" or "incompetences," leading to rigid routines and innovation failure in changing markets.
How do firms overcome competence rigidities?
Firms can overcome these by employing meta-competences like explorative learning and by implementing dynamic capability approaches to adapt to volatile market conditions.
What distinguishes first-order from second-order competences?
First-order competences relate to direct technology or market expertise, while second-order competences are higher-level abilities to identify, evaluate, and incorporate new knowledge into the firm.
Why is the culture dimension emphasized in the conclusion?
The conclusion suggests that organizational culture, values, and norms are quintessential factors for enabling the learning and change required to remain innovative in increasingly dynamic environments.
- Quote paper
- Christoph Blumberg (Author), 2008, Competences and Innovation, Munich, GRIN Verlag, https://www.grin.com/document/141390
