Since globalization started companies have been looking for ways to compete successfully on a global scale. Trends in the global environment, such as worldwide sourcing models requiring the management of cultural differences, as well as rapid communication and technology innovation, are still challenging for many industries.
The airline industry being itself a reason for an increasingly borderless world also faces these global trends and fierce competition. Numerous factors have caused a downward trend of profits in this industry. The first factor has been the deregulation process. Under regulation airlines could not compete on price. Therefore, differentiation was only possible by customer service or on-board entertainment. With the start of de-regulation most customers could not find much difference between the offerings of major airlines and became indifferent about which airline to choose.
Airline tickets started to become a kind of commodity goods. So, although deregulation was thought to lead to lower entry barriers, decreasing concentration and competitive prices, practice turned out to be different: expansion and alliance strategies of leading airlines have increased concentration. Besides liberalization, other factors have been the economic slowdown in many countries, terrorism, and rising costs for fuel, labour, maintenance, and security. Also rising customer expectations e.g. regarding convenience, entertainment, innovation, and value for money require the airline industry to change dynamically. Moreover, airlines face demands for CSR and sustainable travel, including pollution control and reduction of noise and CO2 emissions.
Competition from low-cost carriers also gains in importance since their share of global capacity increased to more than 25 % in 2013. So, even if demand for air transportation has grown by an average of 9 % per year since 1960, and global airline revenues reached a new high of US$708 billion in 2013, airlines need to find ways to stand global competition as their environment, as well as economic and social frameworks potentially endanger profits and economic survival.
Table of Contents
1 Introduction
1.1 Terminology
1.2 Problem Statement and Objectives
1.3 Course of Investigation
2 Theoretical Foundation
2.1 Competitive Strategy
2.1.1 Generic Strategies
2.1.2 Competitive Advantage
2.2 Resource-based View
2.2.1 History and Underlying Assumptions
2.2.2 VRIO Model
2.2.2.1 Concept Development
2.2.2.2 Question of Value and Rarity
2.2.2.3 Question of Imitability and Organization
2.2.2.4 Resources and Competitive Advantage
2.3 Corporate Culture
2.4 CSR
2.4.1 History
2.4.2 Pyramid of CSR
2.5 Critical Appraisal
3 Practical Implementation in the Airline Industry
3.1 Strategy
3.1.1 Strategic Purpose
3.1.2 SWOT Internal and External Analysis
3.1.2.1 Strategic Implications
3.1.2.2 Strengths
3.1.2.3 Weaknesses
3.1.2.4 Opportunities
3.1.2.5 Threats
3.2 Corporate Culture
3.2.1 Cultural Values and Aspects
3.2.2 Source of Competitive Advantage
3.3 CSR
3.3.1 Initiatives and Dimensions
3.3.2 Source of Competitive Advantage
3.4 Critical Appraisal
4 Critical Analysis and Recommendation
4.1 Effects of Corporate Culture
4.2 Management of Corporate Culture
4.3 Effects of CSR
4.3.1 Image and Reputation
4.3.2 Stakeholder Management
4.3.3 Financial Performance
4.4 Management of CSR
5 Conclusion and Prospects
Objectives and Topics
The primary objective of this thesis is to critically analyze corporate culture (CC) and corporate social responsibility (CSR) as potential sources of global competitive advantage within the highly volatile and competitive airline industry. The research aims to evaluate how these organizational aspects can be effectively managed to improve a firm's market position, long-term survival, and economic performance.
- Strategic analysis of competitive advantage and resource-based views.
- Evaluation of corporate culture as an organizational asset.
- Investigation of CSR dimensions and their impact on corporate image and reputation.
- Case study analysis of Emirates airline as a best-practice model.
- Development of management recommendations for leveraging CC and CSR for sustainable performance.
Excerpt from the Book
2.2.1 History and Underlying Assumptions
Research on sources of CA has concentrated either on an outside-in-perspective, describing opportunities and threats as environmental conditions leading to above-average performance (cp. Porter, 1985); or used an inside-out-perspective by analysing a firm’s resources as strengths and weaknesses (cp. Barney, 1991; Penrose, 1959; Wernerfelt, 1984). These contrary views are summarized in the figure below.
Penrose (1959) provided the foundations for the resource-based view (RBV) by introducing the idea of looking at firms as a collection of resources which are used for the production of goods and services, profit making, and firm expansion (cp. Penrose, 1959). The first strategy researcher who further developed this understanding was Wernerfelt. He gave the RBV its name by presenting the notion of analysing a firm from the resource rather than product side (cp. Wernerfelt, 1984). This concept was subsequently refined by Barney who is viewed as the leading author about the RBV theory today.
So, dating back to the 1980s the RBV is not a new theory. But the analysis of resources and capabilities as sources of SCA can still help to explain why some firms consistently outperform others (cp. Barney, 2001, p. 649). The terms (organizational) resource and capability need to be defined first. Resources are all input factors (tangible and intangible, human and nonhuman) into the production process of goods and services which are owned or controlled by a firm (cp. Lado & Wilson, 1994, p. 701). These include all assets, organizational processes, attributes, information, knowledge, etc. which might enable a firm to find and implement strategies improving its efficiency and effectiveness (cp. Barney, 1991, p. 101). Organizational resources comprise a company’s history, relationships, trust, and organizational culture (cp. Barney, 1995, p. 50). Organizational capabilities represent “a firm’s capacity to deploy resources for a desired end result” (Grant, 2010, p. 131). Literature uses the terms capability and core competence synonymously. Thus, core competencies are capabilities which are essential for a company’s strategy and performance (cp. Prahalad & Hamel, 1990).
Summary of Chapters
1 Introduction: This chapter defines key terminology such as Corporate Culture, CSR, and Global Competitive Advantage, outlines the problem statement regarding intense competition in the airline industry, and defines the research scope.
2 Theoretical Foundation: This section provides the theoretical framework, covering competitive strategies, the resource-based view (RBV), the VRIO model, and the conceptual definitions of corporate culture and CSR.
3 Practical Implementation in the Airline Industry: This chapter applies the previously established theories to Emirates airline, analyzing its strategic purpose, SWOT, corporate culture, and CSR initiatives to evaluate their potential for competitive advantage.
4 Critical Analysis and Recommendation: This section examines the effects of corporate culture and CSR on corporate performance, providing a critical assessment and recommendations for management to leverage these assets effectively.
5 Conclusion and Prospects: The final chapter summarizes the findings, reiterating that CC and CSR are sophisticated forms of differentiation that, if managed strategically, can serve as sources of sustainable competitive advantage.
Keywords
Corporate Culture, Corporate Social Responsibility, Competitive Advantage, Airline Industry, Resource-based View, VRIO Model, Strategic Management, Stakeholder Theory, Reputation, Financial Performance, Sustainability, Global Strategy, Differentiation, Organizational Behavior, Innovation.
Frequently Asked Questions
What is the primary focus of this thesis?
The thesis focuses on analyzing whether corporate culture and corporate social responsibility can act as sources of sustainable global competitive advantage for airlines, using Emirates as a case study.
Which theoretical frameworks are utilized?
The analysis relies heavily on the resource-based view (RBV) of the firm and the VRIO model, alongside Porter's generic strategies, to determine the strategic value of internal resources.
Why is the airline industry chosen for this study?
The airline industry is selected because it is highly competitive, volatile, and dependent on trust and service quality, making it an ideal candidate for evaluating "soft" strategic assets like culture.
How is Corporate Social Responsibility defined in this work?
CSR is interpreted as a multidimensional, proactive strategic choice that goes beyond legal requirements to include environmental, social, and economic aspects of business operations.
What is the role of Emirates in this research?
Emirates serves as a "best practice" example to demonstrate how a globally dominant carrier manages its corporate culture and CSR initiatives to distinguish itself from competitors.
What are the key findings regarding the link between CSR and financial performance?
While empirical studies often show conflicting results, the thesis concludes that strategic, proactive CSR engagement can positively influence reputation, stakeholder relations, and long-term financial success.
What is the significance of the "VRIO" acronym in this context?
VRIO stands for Value, Rarity, Imitability, and Organization, a framework used to test if specific resources, such as Emirates' diverse culture, can provide a sustained competitive edge.
How does the author view the "stuck in the middle" concept?
The author adheres to the traditional view that failing to choose between cost leadership and differentiation leads to poor economic performance, emphasizing the need for a clear, focused strategy.
- Citar trabajo
- Lisa Guhl (Autor), 2015, Critical Analysis of Corporate Culture and Corporate Social Responsibility as Sources of Global Competitive Advantage in the Airline Industry, Múnich, GRIN Verlag, https://www.grin.com/document/342719
