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Distinctive Competence and Organizational Performance

Abstract

This study was on distinctive competence and organizational performance. Three objectives were raised which included: To investigate the effects of organizational competence on their competitive advantage, to ascertain the effect of distinctive competence on organizational performance and to ascertain the effect of distinctive competence on organizational profitability. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Dangote cement Plc, Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).

Chapter one

Introduction

1.1Background of the study

Distinctive competence refers to a superior characteristic, strength, or quality that distinguishes a company from its competitors. This distinctive quality can be just about anything innovation, a skill, design, technology, name recognition, marketing, workforce, customer satisfaction, or even being first to market.

The competitive business environment in the twenty first century has resulted into complexity and sophistication of business decision-making which requires strategic management (Olanipekun, 2014). Managing various and multi-faceted internal activities is only part of the modern executive’s responsibilities. The firm’s immediate external environment poses a second set of challenging factors. To deal effectively with all that affects the ability of a company to grow profitably, executives design strategic management processes they feel will facilitate the optimal positioning of the firm in its competitive environment. Strategic processes allow more accurate anticipation of environmental changes and improved preparedness for reacting to unexpected internal and competitive demands (Fiberesima & Rani, 2013).

Competency in recent times is viewed as a prominent area of a mutual knowledge acquisition in organizations; it is also regarded as a process by which information is imparted, streams of technologies are harmonized and the involvement of personnel from all units (different sources of reading). This tends to indicate that businesses are strategically looking for ways in attaining sustainable competitive advantage (Agha et al, 2012). In this regard firms need to rely more on their core competencies. Basically, this tends to indicate that, it is of greater importance for a firm’s strategy to move in competing in core competencies strategy rather than competing for product or service leadership.

Top management of organizations formulation of its strategy, need to consider core competencies as a major factor in attaining profitability (Jamhour 2012). Organizations benefit greatly by becoming immune to competition when the skills of personnel are identified and developed efficiently. In spite of this, a company, which intends changing its core strategy faces difficulties concerning the business process that remains as its core. It is therefore relevant for management to peep inside the organization to utilize its available resources in creating an edge over it competitors. Understanding distinctive competency by top management level will enable the organization enjoy competitive advantage which will result in attaining higher organizational performance

Statement of the problem

Every organisation possesses many capabilities that enable it to perform the activities necessary to provide its products or services. Some of these activities may simply be performed adequately, while others may actually be performed rather poorly. However, successful organisations conceivably possess certain capabilities allowing them to perform key activities exceptionally well. These capabilities have been termed “distinctive competencies” and generally refer to the unique skills and activities that a company can do better than rival companies (Selznick, 1957, Lado, et al, 2002). Moreover, these are the distinctive capabilities that support a market position that is valuable and difficult to imitate. The best test of the distinctiveness of a capability is whether it disproportionately facilitates the provision of superior customer value or permits the business to deliver to customers in an appreciably more cost-effective way

Objective of the study

The objectives of the study are;

  1. To investigate the effects of organizational competence on their competitive advantage
  2. To ascertain the effect of distinctive competence on organizational performance
  3. To ascertain the effect of distinctive competence on organizational profitability

Research Hypotheses

The following research hypotheses are formulated:

H1: there are no effects of organizational competence on their competitive advantage

H2: there is no effect of distinctive competence on organizational performance

Significance of the study

This study contributes to the resource-based theory as it adds a different dimension to the resources that may be put into good use when creating competitive advantage. The resource-based theory focuses on the internal strengths but does not focus on the distribution methods that can be employed to maximise on the internal strengths of the organisation. This study is important for companies because they will be able to identify key competencies, areas for investment and how to improve on the same to achieve a competitive advantage. Company managers will gain insight into the competitiveness of their core competences and find ways of how they can redesign the same with a view to achieving competitive advantage by use of their own known core competences. The research will form an invaluable source of reference for the organizations especially in coming up with policies to guide the industry in the development of good business practices, having healthy competition and good corporate governance. If the industry regulator can focus on what the top companies are doing to remain competitive and profitable then they may impose sound regulations to ensure that business carried out by companies is not merely imitation. They may be able to ensure that all companies focus on what they are most competent at.

Scope and limitation of the study

The scope of the study covers distinctive competence and organizational performance. The study will be limited to Dangote cement Plc, Lagos state

Limitations/constraints are inevitable in carrying out a research work of this nature. However, in the course of this research, the following constraints were encountered thus:

  1. Non-availability of enough resources (finance): A work of this nature is very tasking financially, money had to be spent at various stages of the research such resources which may aid proper carrying out of the study were not adequately available.
  2. Time factor: The time used in carrying out the research work is relatively not enough to bring the best information out of it. However, I hope that the little that is contained in this study will go a long way in solving many greater problems.

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