The Role of Resources in Global Competition

The Role of Resources in Global Competition

The Role of Resources in Global Competition

The Role of Resources in Global Competition

Synopsis

Increasing levels of international trade and foreign direct investment, the growth of multinational corporations and the emergence of new centres of economic prosperity all present challenges to businesses.

Excerpt

In recent decades, the level of research attention being given to questions relating to why organisations work in the ways that they do has grown dramatically. But as our stock of knowledge grows and consolidates, so too, it appears, does the complexity of the tasks which managers face. Conferences are convened and special issues of journals are dedicated to the search for new paradigms suitable for the modern competitive environment. It has become commonplace to talk about the information age, the post-industrial society and the new economy. Thinkers like Charles Handy talk about an 'age of unreason' (Handy 1989), which requires radical, 'up-side down' thinking and new approaches to solving business problems. A variety of terms have entered the business lexicon, including business process reengineering, downsizing and rightsizing, the knowledge organisation and core competencies, to mention but a few. The business of seeking answers to today's and tomorrow's business problems has become a booming industry worth some $20 billion a year (Economist 1997a). The emergence of these 'new' solutions has been greeted with scepticism in some quarters. For example, Hilmer and Donaldson (1996) argue that the seemingly endless flood of new fads serves only to undermine management theory by urging managers to cast aside well-established practices in favour of new ideas. Others have argued that it is time to get off the 'verbal merry-go-round' and return to an action perspective on management research where the value of research is measured by usefulness rather than by newness (Eccles and Nohria 1992).

Though the search for new management ideas may have been taken too far, the kinds of challenges facing today's managers is aptly demonstrated by a recent special issue of the Strategic Management Journal. The editors describe a new competitive milieu that is forming as a result of a combination of ten different pressures, ranging from deregulation to environmental concerns to technological discontinuities (Prahalad and Hamel 1994). It is noteworthy that three of the proposed ten pressures for change all relate to the increased globalisation of business, namely, the decline in protectionism, the emergence of trading blocks and global

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