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Whence Competitive Advantage Resource Based Theory of the Firm

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Computer Technology, if not homogeneous, is certainly mobile. ... IS Technology. IS / User. Relationship. IS Human Res. Strategically. Aligned. Planning ... – PowerPoint PPT presentation

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Title: Whence Competitive Advantage Resource Based Theory of the Firm


1
Whence Competitive Advantage? Resource Based
Theory of the Firm
  • Prior Theories Porters Competitive Forces,
    Value Chain, Customer Resource Life Cycle models,
    et. Spectacular Examples ASAP SABRE
  • Problem Sustained competitive advantage only
    comes from assets that cant be duplicated, not
    homogeneous and not mobile.
  • Computer Technology, if not homogeneous, is
    certainly mobile. IT may be non-sustainable, a
    competitive necessity vs. a competitive advantage.

2
Resource Based Theory of the Firm
  • Strategic Resources are
  • Valuable
  • Rare
  • Inimitable
  • Without Available Substitutes

3
What Makes an Asset Tough to Imitate? (ala
Dierickx and Cool)
  • requiring long time to develop, or
  • dependent upon unique historical conditions, or
  • link to advantage not understood, or
  • socially complex

4
Research Questions
  • How can IT managers contribute to business value?
  • What are impacts of new IT management practices
    on
  • business value?
  • How do new practices create value over time?

5
Research Design Selecting Cases
And Entering the Field
Interviews with 50 CIOs
new management practices
1-day of interviews in 12 firms
3 more days of interviews over
18 additional months in 7 firms
Generalization to Theory
6
What We Expected to Find
New IT
Management
Practices
Production
Business
Process

Value
7
What We Found
New IT
Management
Practices
Production
Business
Asset Base
Process

Value
Feedback Additions or Subtractions to Asset Base
8
Three Key IS Assets
IS Human Res.
IS Technology
IS / User

Relationship
9
IT Processes
IT Assets
Strategically Aligned Planning
Leveraging
Building
Leveraging
Fast, Low Cost Delivery
Business Value
IS Technology
IS Human Res.
Building
IS / User
Relationship

Cost Effective Operations and Support
Leveraging
Building
10
What Makes an Asset Tough to Imitate? (ala
Dierickx and Cool)
  • requiring long time to develop, or
  • dependent upon unique historical conditions, or
  • link to advantage not understood, or
  • socially complex

11
Mgmt Practices Only Slowly
Increase Such Assets
Policies that
increase the level
of the asset
IS / User Relationship
Policies leading to
asset decay, attrition
12
Synergies Heighten Inimitability of 3 Asset
Bundle (Interconnnectedness of asset stocks, ala
Dierickx and Cool)
  • Need history of fast, cost effective, delivered
    benefits for strong relationship
  • Need a strong relationship to identify the
    systems that bring the most business value
  • Need good infrastructure and good business
    knowledge for fast, cost effective systems
  • Need strong relationship to obtain investment
    dollars to build strong infrastr.
  • Need good relationship to build bus knowl.

13
Conclusions
  • A new way of thinking about managing IS
  • for short run value, leverage existing asset base
  • for long run value, build appropriate asset base
  • Potential management actions should be considered
    in light of the impacts on the asset base
  • Puts management of IT infrastructure in
    theoretical context.
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