5 - Strategic capability and competencies

Question 1

Learning outcomes - chapter 5

Answer 1

• demonstrate how resources fuel the capabilities that are needed within any organisation
• comment on how the capabilities can be aligned with competence to drive competitive advantage
• understand different types of competitive advantage and their different organisational impacts
• demonstrate the need for the company secretary or governance professional to have a holistic understanding of how and where strategy is derived

Question 2

Define organisational capability

Answer 2

Potential to achieve an outcome

Question 3

Define organisational competence

Answer 3

The ability to apply and utilise a capability to perform required activities

Question 4

Explain how strategic capabilities are both common and unique

Answer 4

Common - may capabilities required by all organisations which can be assessed to understand orgs’ relative success

Unique - combined capabilities of an org’s unique individuals provides the org different capabilities to any other org

Question 5

3 classifications of resources available to an organisation

Answer 5

Tangible (financial, physical)
Intangible (tech, culture)
Human (communication, motivation, etc.)

Question 6

Capabilities of organisation need to be understood from three aligned perspectives:

Answer 6

Organisational - infrastructure, leadership

Potential - utilisation of resources

Challenge - accumulation of resources

Question 7

2 basic types of competitive advantage

Answer 7

Cost advantage
Differentiation advantage

Question 8

Arie de Geus - what ‘may be the only sustainable competitive advantage’

Answer 8

The ability to learn faster than our competitors

Question 9

Two types of integration between organisations (brief explanation)

Answer 9

Horizontal integration (org’s on same level of supply chain working together)

Vertical integration (organisation works with customer / supplier)

Question 10

(acronyms) Frameworks used to identify and consider significance of competitive attributes re. resources and capabilities

Answer 10

V value
R rarity
I inimitability
N non-substitutability

V value
R rarity
I inimitability
O organisational support

Question 11

VRIN/VRIO - value

Answer 11

Ability to use resources and capabilities to address opportunities and threats

Question 12

VRIN/VRIO - rarity

Answer 12

The rarer, the more competition will be deterred / prevented

Question 13

VRIN/VRIO - inimitability

Answer 13

How accessible is the inimitable resource to competitors?

Question 14

VRIN/VRIO - non-substitutability

Answer 14

How easily can alternative product or service be sourced by customer?

Question 15

VRIN/VRIO - organisational support

Answer 15

Ongoing support of organisations to their customers

Question 16

Porter’s value chain analysis separates the org structure into which 2 aspects?

Answer 16

Primary activities
Support activities

Question 17

Porter’s value chain analysis - 5 primary activities

Answer 17

Inbound logistics
Operations (transformation of materials into final product / service)
Outbound logistics
Marketing and sales
Service

Question 18

Porter’s value chain analysis - 4 support activities

Answer 18

Procurement (of resources)
Technology development
Human resource management
Firm infrastructure (formal systems of planning, quality control, etc.)

Question 19

What is gap analysis?

Answer 19

Analysis of the difference between anticipated performance and actual performance

Question 20

3 benefits of benchmarking

Answer 20

• Alignment of performance against strategic goals and objectives
• Acceleration of management of change
• Improvement of operational processes

Question 21

What are the 7S of the McKinsey 7S framework (which are hard and soft elements)

Answer 21

HARD
Strategy
Structure
Systems

SOFT
Style
Staff
Skills
Shared values

Question 22

Mckinsey 7S hard and soft explained

Answer 22

Hard - easy to define and identify, largely determined by strategic activities of people

Soft - less tangible, parts of culture

Question 23

What is the principle that sits behind the Mckinsey 7S model?

Answer 23

Each of the elements are constantly interacting with each other in daily operation of organisation

Question 24

Most practical way to use 7S model

Answer 24

Matrix requiring each cell to be completed in recognition of how resources and capabilities can be utilised to achieve competitive advantage

Question 25

Which two resources are considered key in driving competitive advantage

Answer 25

People
Money