Question

The importance of a firm's internal characteristics— represented by its resources and capabilities—highlights a shift in the priorities and prescriptions of strategic management research. The field has evolved or developed from a position that understanding industry characteristics and then positioning the firm to take advantage of industry characteristics relative to competitors was of primary importance to recognizing that it is a firm's resources and capabilities (which represent sources of core competencies) that should serve as the foundation for firm strategy.

This shift recognizes that industry attractiveness is not dependent only on industry characteristics. Industry attractiveness is ultimately determined by both industry characteristics (which can be translated into opportunities and threats) or what a firm might do and its internal strengths (its resources, capabilities, and core competencies) which determine what a firm is capable of doing to take advantage of (or exploit) external opportunities.

Can efforts to develop sustainable competitive advantages result in employees using unethical practices? If so, what unethical practices might be used to compare a firm’s core competencies with those held by rivals? How do the Internet’s capabilities affect actions taken to form competitive advantages that will help the firm in its efforts to outperform its rivals

Answer 1

Yes. Efforts to develop sustainable competitive advantages may result in employees using unethical practices.

One of the common unethical practices in the industry is the copy of design material with a slight variation. Through the (slight) variation of specification, the company in question can pretty much copy other design elements from its rival. One of the key example that was seen in the last decade was Samsung’s attempt to copy some design elements from Apple iPhone. Such copying of design, though not illegal, is an unethical practice. Especially considering that Apple’s products’ one of the key strength was its design appeal among the consumers. Hence by copying Apple’s design Samsung attempted to appeal to the same target group and acquire market share that originally belonged to its rival. In addition to copying there are also myriad of examples where organizations have undertaken corporate espionage in order to learn each other’s trade secret. Though such activities does not break any legal boundaries, they do breach the ethical principles of business.

Internet makes data about a company, and its products easily available to its rivals. As a result, keeping a tab on rivals have become easier. In addition to this, internet is also a fertile ground for leaked information from corporates discussions, future product releases and much more. With these information in hand, rivals can take a strategic stance on building/modifying their core competency in order to suit the future market landscape. By doing so the rivals try to outperform each other in the market.