Organizational Core Competence and Competitive Advantage

Introduction

1.1 Background to the Study

The challenging environments we have today have imposed on the improvements organizations not only for competition, but in order to keep going and stay in the market. Various researchers have agreed that higher in performance is a product of the process of formulating a strategy through which the organization seeks to achieve its mission and objectives at the end.

As a result of this, the successful performance also depends on the existence of the skills and capabilities of each individual organization, pointing to the fact that an appropriate and use of information technology by the organization may be crucial in the promotion of organizational performance (Bharadwaj, 2000; Ray, Muhanna, and Barney, 2005). Core competence is thought play an important role in the process of creating synergy between the strategic business units especially in a large organisation like PZ Cussons Nigeria Plc. Therefore, the experimental results of the core competence are to obtain confirms the superiority of competitive performance (Besle and Sezerel, 2012). The organizational performances defined is a final result of a work include many factors like: communication, job processes, team, interaction, corporate culture, commitment, climate for innovation, satisfaction, loyalty and business environment (Lia, et al., 2006).

Nowadays, banking sector has gain large importance, especially when compared with other sectors like manufacturing sector which PZ Cussons Nigeria Plc is included. Because of the diversity and multiplicity of services provided to the public and its contribution to the economic growth of the country. According to report of Central Bank of Iraq (CBI), 2012), there are 23 private banks licensed to work in Iraq. The private banks of this study are includes Baghdad Bank, Commercial Bank of Iraq, Iraqi Middle East Investment, Investment Bank of Iraq, United Bank for Investment, Dares Salaam Investment Bank and the likes.

Core competencies should be built upon organizational capabilities, and resources. Gaining superiority in a competitive market depends on a firm’s ability to identify, develop, deploy, and preserve particular resources that distinguish it from its rivals (Carmeli, Tishler, 2004). Capabilities-based competition means the consistency of firm’s product quality, the insight into evolving customer needs, the ability to exploit emerging markets, enter new businesses, or generate new ideas and incorporate them in innovations (Stalk et al., 1992). Capabilities are considered to be the organisation’s ability to make use of its resources (Torkkeli, Tuominen, 2002). Capabilities make the difference in using resources. Hence, a company determines what skills or capabilities will make them unique in the future (Hamel, Prahalad, 1994). For example, the secret of Wal-Mart’s success against its rival, Kmart, which is once an market leader in retailing industry, is a relentless focus on satisfying customer needs, gaining the full benefits of cross-docking, and finally, its human resource system (Stalk et al., 1992). It is against this background that this study seeks to investigate organizational core competence and competitive advantage by using study of PZ Cussons Nigeria Plc.

1.2 Statement of the Problem

Skills and tactic knowledge which are core competence of an organization are used to develop competitive strategies that are unique to an organization. Hence, core competence has given significant contribution to the end product, provided access to more than one market, and has become difficult for competitors to imitate. PZ Cussons Nigeria Plc gain competitive strategies as the impacts of specialization in the organisation. Core competence is a concept used in explaining collaborative efforts in organisation to be initiative which co-oversee the activities of different persons in an organization with diverse skills and capabilities.

In such competitive environment, organisations are making use of different strategic tools to gain market leadership in order to gain competitive advantage. Some organisations like PZ Cussons Nigeria Plc are going back to enhance their internal processes and capabilities in a bid to make them more consistent and efficient by improving their products. Core competencies are very important to PZ Cussons Nigeria Plc to counter competitors’ strategies. How the organisation utilizes its core competencies to large extent determines the eventual organizational performance. The search for competitive advantage largely borders customers’ appreciation of organisational value addition and their comparisons among the available products and service. Therefore it becomes necessity for PZ Cussons Nigeria Plc management to assess its core competencies. However, none of these studies focused on manufacturing industry like PZ Cussons Nigeria Plc to determine how the organisation has entrenched the core competence concept, its operations and processes. There is need to critically investigate organizational core competence and competitive advantage in the manufacturing industry like PZ Cussons Nigeria Plc.

1.3 Research Objectives

The general objective or main objective of this study is to investigate organizational core competence and competitive advantage by using study of PZ Cussons Nigeria Plc.

The specific objectives are:

1. To investigate the effects of organizational core competence on their competitive advantage
2. To examine the reasons why PZ Cussons Nigeria Plc engage in organizational core competence for competitive advantage
3. To determine the prevalence of organizational core competence and competitive advantage in PZ Cussons Nigeria Plc

1.4 Research Questions

The following are some of the questions which this study intends to answer:

1. What are the effects of organizational core competence on their competitive advantage?
2. What are the reasons why PZ Cussons Nigeria Plc engages in organizational core competence for competitive advantage?
3. To determine the prevalence of organizational core competence and competitive advantage in PZ Cussons Nigeria Plc?

1.5 Research Hypotheses

The following hypotheses were postulated to guide the conduct of this study;

1. Core Competence does not affect the Competitive Strategy
2. Core Competence does not affect the Corporate performance

1.6 Significance o the Study

This study contributes to the resource-based theory as it adds a different dimension to the resources that may be put into good use when creating competitive advantage. The resource-based theory focuses on the internal strengths but does not focus on the distribution methods that can be employed to maximise on the internal strengths of the organisation. This study is important for insurance firms because they will be able to identify key competencies, areas for investment and how to improve on the same to achieve a competitive advantage. Insurance managers will gain insight into the competitiveness of their core competences and find ways of how they can redesign the same with a view to achieving competitive advantage by use of their own known core competences. Insurance marketers too will find this study useful as they will be able to identify competitive internal organizational competencies which can aid them to sustain organic growth and ensure maximum retention of customers.

The research will form an invaluable source of reference for the organizations especially in coming up with policies to guide the industry in the development of good business practices, having healthy competition and good corporate governance. If the industry regulator can focus on what the top companies are doing to remain competitive and profitable then they may impose sound regulations to ensure that business carried out by companies is not merely imitation. They may be able to ensure that all companies focus on what they are most competent at.

1.7 Scope of the Study

This study shall be carried out among the staff of PZ Cussons Nigeria Plc in Lagos State, Nigeria.

1.8 Limitation of the Study

Time constraint was a limiting factor because the study is to be concluded within a short time. Availability of funds was also a limiting factor to the study since the researcher is self sponsored. There was no assurance that the respondents will return all the questionnaires duly completed, neither was there a guarantee that those who will be interviewed would respond to all the questions put forward to them comprehensively for fear that it would expose their noncompliance to the organisation. To counter these limitations, the researcher took leave from work to make time to interview the respondents and also sought for funding from relatives. The staff fear of participation was overcome by explaining to them the intent of the study and issuing the transmittal letter as well as the supervisors contact for verification purposes.