This paper covers 8 critical questions related to organizational theory, design, strategy, and technological change. It explores differences in quantum and incremental technological change as well as ways that organizations can employ key strategies to develop a competitive edge and leverage power structures to advance the organization. Organizational change - evolutionary and revolutionary - are also discussed.
Organizational Theory #2
What core competences give an organization competitive advantage? What are examples of an organization's functional-level strategies?
Core competencies are those capabilities that are critical to a business achieving a competitive advantage in the marketplace. Typically, core competencies can be identified by certain common characteristics -- offering a benefit to the customer, difficult to imitate, uniquely identify the organization and easily leveraged to create many products or operate in many markets (Kern, 2010). The organization that is best able to use its resources to create value is in an ideal position to outperform the competition, thus creating advantage (Jones, 2010). Core competencies tend to change in response to changes in the environment. They are flexible, evolve over time and enable the company to enter apparently different markets with a clear and distinctive brand proposition. Examples of core competencies include manufacturing, research and development, new technology or organizational design and change. They should be difficult for competitors to imitate -- truly unique in nature (Kern, 2010).
Functional-level strategy relates to a single functional operation and all its related activities. Decisions at this level within the organization are often described as tactical (Jones, 2010). Functional strategy deals with relatively restricted plans providing objectives for specific function. It also involves the allocation of resources among different operations within that functional area and coordination between them (Kern, 2010). Below the functional-level strategy, there may be operations level strategies as each function may be divided into several sub-functions. For example, marketing strategy, a functional strategy, can be subdivided into promotion, sales, and distribution -- all contributing to the functional strategy. Human resources, research and development, and information technology are all examples of functional levels.
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