Strategic Management

Those who analyze the firm’s internal organization use global mind – set, which is the ability to analyze, understand and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture or context. The analysis of the firm’s internal organization requires that evaluators examine the firm’s portfolio or resources and the bundles of heterogeneous resources and capabilities managers have created. This perspective suggests that individual firms posses at least some resources and capabilities that other companies do not, at least not in the same combination. An organization's core competencies creates and sustains its competitive advantage.

By exploiting their core competences to meet if not exceed the demanding standard of global competition, firms create value for customers. Value is measured by a product’s performance characteristics and by its attributes for which costumers are willing to pay. Firms create value by innovatively bundling and leveraging their resources and capabilities. Firms which are not able to do this, suffer performance declines.

Strategic decisions are non-routine, have ethical implications and influence the organization’s above – average returns. These decisions involve choices about the assets the firm needs to collect and how to best use those assets. Decisions are about identifying, developing, deploying and protecting firms’ resources, capabilities and core competencies. Difficult managerial decisions concerning resources, capabilities and core competences are characterized by three conditions: 1) uncertainty, 2) complexity, 3) intraorganizational conflicts. Managers face (1) uncertainty in terms of new proprietary technologies, rapidly changing economic and political trends, transformations in societal values, and shifts in costumer demands. However environmental uncertainty increases the (2) complexity and range of issues to examine when studying the internal...