Organizational Capability

1. Organizational Capability • Is one of four major sources of competitive advantage. • Dependent on the extent to which managers/leaders understand and apply effective people development principles and processes. • Seeks strategic unity for both employees and customers.

2. Competitive Advantage Model-Dave Ulrich and Dale Lake Logic for Competitive Advantage Critical Questions • Change • Economic Vicious • Circle • Competition • Competitive Advantage • Perceived Customer Value • Uniqueness • Sources of Uniqueness • Organizational Capability • Shared Mindset • Management Practices • Capacity for Change • Leadership at All Levels in the Organization 1.To what extent do we understand economic and social conditions affecting our business? 2.To what extent do we understand and meet customer needs? 3.To what extent does my business demonstrate world-class performance in each source of uniqueness as well as the ability to integrate the four sources? Technological Capability Financial Capability Strategic Capability 4.To what extent do we have a shared mindset inside and outside the organization? 5.To what extent do we use all management practices to build a shared mindset? 6.To what extent do we have the capacity for change? 7.To what extent do we have leadership throughout the organization?

3. Questions and Principles for Organizational Capability To what extent do we have leadership throughout the organization? • External leadership-the ability to translate external needs to internal vision • Internal leadership-the ability to translate vision to employee action To what extent do we have the capacity for change? • Symbiosis-the ability to remove boundaries between external threat and internal action • Reflexiveness-the ability to learn from previous actions • Alignment-the ability to integrate tasks, structures, processes, ands systems at the technical, political, and cultural levels • Self-renewal-the ability to change over time To what extent do we use all management practices to build shared mindset? • Integration-the ability to integrate all the management practices • Unity-the ability of management practices to build internal and external unity

4. Questions and Principles for Organizational Capability Continued To what extent do we have a shared mindset inside and outside the organization? • Internalize customer values-the ability to make customer values employee values • Mindset dispersion-the ability to build a shared mindset inside and outside the organization To what extent does my business demonstrate world-class performance in each source of uniqueness as well as the ability to integrate the four sources of uniqueness? • Paradox-the ability to deal with competing demands To what extent do we understand and meet customer needs? • Customer intelligence-the ability to scan continuously and learn from customers • Competitor intelligence-the ability to examine continuously and learn from competitors To what extent do we understand economic and social conditions affecting our business? • Continuous learning-the ability to learn continuously about business conditions that affect the firm