Toward Creating Learning-Based Competitive Advantage: An Empirical Investigation

Article excerpt

EXECUTIVE SUMMERY

This paper is a case study of creating learning-based competitive advantage through organizational learning. It examines how two business firms create competitiveness through transforming themselves into learning organizations. The research methodology employs a fact-based principle that combines quantitative and qualitative methods. Data was collected and analyzed at corporate level of the subject organizations. A conceptual model of creating learning-based competitive advantage through organizational learning has been developed based on the findings.

Keywords: Learning-based competitive advantage, Organizational learning, knowledge, skills, performance

INTRODUCTION

In quest of competitive advantage, resource-based theory (RBT) has suggested that competitive advantage is derived from a bundle of strategic resources and focused on individual resources while under-exploring multiple resources interactions (e.g., Barney, 1991; Dierickx and Cool, 1989; Peteraf, 1993; Smith, Vasudevan & Tanniru, 1996). Organizational economists have begun viewing organizational learning (OL) as a strategic resource (e.g., Cohen and Levinthal, 1989; Smith, Vasudevan & Tanniru, 1996). Fiol and Lyles (1985) suggest that OL includes changes in both of cognition and behavior dimensions. Importantly OL presumes benefits from interactions between resources and their use (Smith, Vasudevan & Tanniru, 1996).

However, the literature fails to capture advantages derived from dynamic OL (Smith, Vasudevan & Tanniru, 1996). Particularly, it lacks empirical studies in how the firm reconfigures and operates its resource base under the new conditions through OL (Fiol & Lyles, 1985; Smith, Vasudevan & Tanniru, 1996). This paper is a case study to examine how the firm creates competitive advantage through organizational learning.

Two business firms-Unisys Corporation and Dow Chemical Company were selected from the 2004 ASTD's1 29 BEST Awards winners of organizational learning and performance in five countries. Data collection has been conducted through the company's website, interview and documentation such as annual reports, archival records, financial reports, electronic databases, and other publications. Interviews were conducted with focused topics. Interviewees include Sonya Davis and Don Gaertner, both are senior human resource development specialists at Dow, and president Mary Shacklett of Transworld Data. Transworld Data was Unisys' partner involved in establishing Unisys University.

The corporate performance literature has documented two market-oriented outcome measures of intellectual assets-Tobin's q^sup 2^ and market value added (MVA^sup 3^) to explain a wide variety of phenomena, particularly the value of intangible assets (e.g. Bharadwaj, Bharadwaj & Konsynski, 1999; Bosworth & Rogers, 2001; Dzinkowski, 2000; Hall, 1993; Hirschey, 1982; Lang & Stulz 1994; Megna & Klock 1993; Salinger, 1984; Simon & Sullivan 1993; Smirlock, Gilligan & Marshall, 1984; Wernerfelt & Montgomery, 1988). Particularly, Ellinger, Ellinger, Yang & Howton (2002) employed Tobin's q and MVA to assess the association between OL and the firm's performance.

This study combines quantitative and qualitative approaches to the analysis of data. Due to data availability, Tobin's q, MVA and well-recognized business rankings are employed as the proxies of qualitative measurement to assess Unisys' corporals performance and cost savings to measure Dow's learning initiative.

UNISYS CORPORATION

Headquartered at Blue Bell in Pennsylvania, USA, Unisys is a worldwide information technology services and solutions company with more than 36,000 employees and operates in more than 100 countries around the world.

In 1986, as the second largest computer firm in the nation Unisys stepped up diversification of its product line. Since the mid-1990s Unisys began to shift to service and continued it restructuring. …