Competitive advantage and board members
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Q1. How can a company achieve a sustainable competitive advantage when its industry becomes hypercompetitive? Provide examples of some companies that you believe have been successful at this.
Q2. Read the articles below.
Keifer, J. L., & Keifer, M. C. (2009). A method for embedding business ethics into traditional business analysis. Southern Journal of Business and Ethics, 1, 141-150.
https://search-proquest-com.ezp-02.lirn.net/central/docview/815416676/18B3FC7CC2854BEDPQ/1?accountid=143980
Rao, K., & Tilt, C. (2016). Board composition and corporate social responsibility: The role of diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), 327-347. doi:http://dx.doi.org/10.1007/s10551-015-2613-5
https://search-proquest-com.ezp-02.lirn.net/central/docview/1819072150/B2AFB7C400A445A1PQ/1?accountid=143980
Shaukat, A., Qiu, Y., & Trojanowski, G. (2016). Board attributes, corporate social responsibility strategy, and corporate environmental and social performance. Journal of Business Ethics, 135(3), 569-585. doi:http://dx.doi.org/10.1007/s10551-014-2460-9
https://search-proquest-com.ezp-02.lirn.net/central/docview/1791566756/877514D54F3D47E9PQ/1?accountid=143980
After you have read the three articles, explain what the authors think about the following prompts:
• How can the board of governors incorporate corporate social responsibility in internal audits?
• How can companies recruit for their board of directors to ensure that the company makes the best decisions?
• How does the composition of the board of directors affect the strategic decision making?
• What would you recommend to a company that wants to improve its CSR reporting and strategic decision making?
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Solution Summary
The response provides you a structured of competitive advantage and corporate social responsibility. It also gives you the relevant references.
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1.
You should say that a company can achieve a sustainable competitive advantage even when its industry becomes hypercompetitive. Hyper-competition means rapid and fast-moving competition where competitive advantage is difficult if sustain. The situation during hypercompetitive conditions is such that there is the rapid increase in the price-quality challenge to capture established the product or geographic markets(1).
You should say that sustainable competitive advantage can be achieved by a firm using differentiation strategy by developing & using unique technical expertise, using extremely talented personnel, and innovating its processes. For example, Apple iPhone is regularly redesigned, and unique features are added to fend off fierce competition from global competitors. The competitive advantage is sustained in hypercompetitive conditions because Apple retains its patents, talented personnel, and innovative processes.
Sustainable competitive advantage can be achieved in hypercompetitive conditions when a company is a cost leader by achieving high asset utilization. One of the industry which has experienced hypercompetitive conditions is the airline industry. One company that has sustained competitive advantage in such conditions is Southwest Airlines. Fast turnover and maintenance of aircraft is the high asset utilization method that Southwest Airlines uses. Apart from that, a cost leadership position can be sustained if the company achieves low direct and indirect operating costs. Continuing with the Southwest Airlines example, the company sustains competitive advantage by offering basic no-frills services, reducing customization/personalization of services, and using the same type of plane ( standardization in turning around & maintenance). Finally, cost-based sustained advantage can be achieved in hypercompetitive conditions if the company has the ability to bulk buy for quantity discounts, pressurizing suppliers on price, and connecting with vendors to keep the inventories low or zero. An excellent example is that of Amazon.com that uses this strategy.
2.
You should say that the Board of Governors appoints the audit committee. The audit committee sets the timescale, funding of internal audit, setting the scope of work of the internal audit, and approving the plans for internal audit. It is through the audit committee that the Board of Governors can incorporate social responsibility in ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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