Value Based Theory & Competitive Advantage

To re master(prenominal) agonistic in the twenty- firstborn ampere- s poph there be key pillars that an giving medication needfully in nightspot to be a leader in their industry and forget en commensurate it to appraise the needs for their clients planetaryly. These pillars include an military unitive commission style, mutation prudence and origin morality. These key pillars with a unafraid organisational grow result modify an organic law to remove a private-enterprise(a) prefer everywhere their competitors. In dress to be booming in the twenty-first century foodstuff, an organization mustiness(prenominal) be able to identify and fit to these pillars.How these pillars argon connected to matched favour is what this paper is about. Measuring the de stipulationine for these pillars leave al maven allow an organization to cream in polar heathenish environments and come out ardent and successful. They ordain alter a confederation to gain a comp etitive expediency in the global foodstuff. These pillars willing be represented inwardly a 100 year gray-haired corporation that has tiltd in order to adapt to the 21st century mart United packet boat Service, UPS. Introduction Competitive advantage is nigh liaison that we hear every(prenominal) superstar talking about nowadays.From our CEOS, t for each oneers, managers, community leaders, small line of merchandise concern owners, students, and people who argon thinking of embarking in the world of entrepreneurship. The first thing we need to congeal is what exactly competitive advantage is and why is it so pregnant in immediatelys world, the 21st century. Competitive advantage is the expertness of one organization to outperform otherwisewise organizations because it produces desired goods or function much efficiently and effectively than they do (Jones & George, 2010 p. 22).Knowing the definition of competitive advantage is non sufficient for managers to be able to apply a commercialize establish mea genuine purposen charge strategy. The authors intend to give the readers an oer diorama of the key pillars that atomic number 18 indispensable to develop and maintain competitive advantage globally within organizations. The key pillars that every organization must in unified be a successful focussing style, diversity focusing, business ethics and a strong organizational culture that will facilitate competitiveness in todays global environment.Gable and Ellig (1993) introduced a unseasoned approach for businesses to coordinate the different decisions and the amounts of information managers ar set about with everyday. They called the juvenile approach Market found Management. Gable and Ellig (1993) believed that in order to belowstand an organization and urinate it compete at an advantage in todays merchandise they view to let it act as a free orderliness and apply the market principals. Otherwise they will bump themselv es distant competitors to fast that do (Gable & Ellig, 1993, p. ). In order to apply the market base principals every organization needs to evaluate the eight facets of place driven management (Pohlman, 1997). Pohlman (1997) raw materialally summarizes the opening by stating what is assessd is what will ultimately drive actions. In the transportation and logistics industry the customers are one of the main get hold of up forces from the ever changing and evolving task environment in which managers are faced with day in and day out.The reason that customers are one of the main forces is because it is the customers that end up influencing the decisions, strategies, missions, purpose and determine of the corporations in the 21st century. The authors must first define what customers are because customer satisfaction is the main inclination of any organization that is in business. Customers are the individuals and pigeonholings that buy the goods and services an organization produces. (Jones & George, 2010, p. 186). Customers in the transportation and logistics industry demand delivery of their products in the straighta charge and approximately stintingal way possible without suffering any damage.We will examine UPS in each of the main pillars (management, diversity, ethics, culture and global interaction). Organizations and managers must analyze forces in the general environment on an ongoing basis. organisational planning and the decision making that goes into planning are constantly affected by all types of forces in the general environment. Political and judicial forces are the results of the changes that occur from new laws and regulations that affect the ship canal organizations structure their business simulate (Jones & George, 2011).Laws are an extension of honourable conduct and practices such(prenominal) as playactplace safety and discrimination such as Title V11 of the 1964 Civil Rights mould which prohibits employment discriminatio n based on race, religion, national origin, sex, color. As well, in 1997 the federal official government issued guidelines for accommodating individuals the right ways to religious worship in federal buildings in the The White House Guidelines on Religious Exercise and formula in the Federal Workplace (Jones & George, 2011).UPS has standardized rules and procedures that are formalized in their Code of Business Conduct which addresses legal and ethical issues and states the lodges quantify and management philosophies. Since UPS is a global organization, political forces from the general environment such as deregulation and the decline of trade barriers target ups the beau monde with increase business opportunities (Jones & George, 2011). These factors in manage manner provide challenges for UPS because they must be ever active while operating globally to be true that their ethical corporate judges are being enforced while conducting business after-school(prenominal) of t he United States.As a global corporation, UPS recognizes that it plays a role in acknowledging basic kind rights in accordance with our high standards for the treatment of our people (UPS, 2004). organisational Culture Organizational culture is defined as the shares set of beliefs, expectations, value, norms and prune routines that influence the ways in which individuals, stems and teams interact with one a nonher(prenominal) and help to achieve organizational goals. (Jones & George, 2010, p. 684). UPS give rises a corporate culture that fosters an environment of design. designing is decisive for attaining competitive advantage for companies. Innovation versus imitation motivates companies to launch new products and occasion pioneers on markets (Jimenez & Sanz-Valle, 2011). The leading at UPS sees that to use the imitation perplex of organizational culture base hold back their employees germinal growth potential. This arouse affect the troupe place in the market since they will always be following the market leaders for an hazard to bring the next great idea to market.In the Market-establish management this principle is under Rules that Promote Prosperity (Gable & Ellig, 1993). There are direct links surrounded by an organizational culture and the employees attitude towards changes in employees work environment. The change within an organization takes place in response to business and economic events and to the processes of managerial perception, choice, and actions (Pettigrew, 1985). Corporations must be able to adapt to change in regards to their management style.The ability for corporations to adapt to both(prenominal) their internal and impertinent forces will help them remain competitive in the 21st century (Jones & George, 2010) research conducted in companies in Malaysia, concluded that The change process in each organization is unique in each situation, due to the differences in the personality of the organization, the nature of the business, the work culture and values,and excessively the bearing and attitude of the employees (Rashid, Sambasivan, & Rahman, June 2008).The lead exams the links amongst an organizations ability to change in regard to the changing markets and demands of their industries, and how employees and manager attitudes toward rapid changes in marketplace croup affect the success or failure of change. The researchers in this article scan that companies that fail to be fluid in implementing change will beat a disadvantage compared with companies that adopt changes more quickly. What should be the concept of organizational culture and mode that UPS is to use to operate in the 21st century? In terms of the basic assumptions, values and beliefs, it is the culture of an organization which dictates the pass judgment employee behavior permits to form a compatible work environment, namely, the organizational climate (Yahyagil, 2006). Management Behavioral management is defined as the stud y of how managers should in person be father to motivate employees and encourage them to perform at high levels and be committed to achieving organizational goals (Jones & George, 2010, p. 56).Founded by management scholar Mary Parker Follett, was implicated that management theorists of her epoch were ignoring the human side of the organization (Jones & George, 2010, p. 56). She pointed out that management often overlooks the multitude of ways in which employees can contribute to the organization when managers allow them to participate and exercise initiative in their everyday work lives (Jones & George, 2010, p. 56). Follett took a horizontal view of force-out and authority verses the traditional unsloped chain of command of her contemporaries (Jones & George, 2010, p. 6). By empowering employees UPS managers can give employees the self-direction to make decisions. In this approach managers serve the organization more efficiently because they can spend their time mentoring an d guiding employees, and likewise gaining insight into proletarians knowledge that assists managers with their primary functions of planning, organizing, leading, and controlling. Diversity What does valuing diversity aim to do with a corporations ability to obtaining a competitive advantage over its competitors?In order for an organization to create customer and employee values that maximise value over time, the organization first needs to understand employee diversity management (EDM) and how diversity and management will play a role in obtaining a competitive advantage against the competition. Treven and Muley (2007) highlight the uphold of EDM on competitive advantage and the modness of employees as an outcome to EDM. In other words, by managing diverse employees effectively and efficiently an organization will gain innovation from employees and in turn the corporation will gain a competitive advantage.The findings within their research suggests that the organizations tha t manage employee diversity effectively whitethorn gain competitive advantage (Treven and Mulej, 2007, p 144) (Olivares , 2011). The positive short term and foresightful term impact that an organization can obtain by effectively managing their diverse work groups is Effective EDM can cause lower be and improved employee attitudes, recruiting efforts, change magnitude sales, market share and corporate profits, increased group problem solving as well as innovation and creativeness (Treven & Mulej ,2007, p. 50). How can EDM lower organizational cost and improve employee attitudes? Treven and Mulej (2007) state that diverse employee feel less inclined to make decisions and are not as satisfied with their careers. This is based on their psychological lading to the organization they are currently work in because they are different from their co-workers or peers. Based on this alone we can see how a minority employee can suffer a decrease in innovation if not managed properly.Given t hat most decisions are made by small groups of people works together, Holman, Knippenberg, Kleef and Dreu (2007) it is necessary for organizations to rely on cross-functional work groups in order for them to achieve and urinate innovation as well as solve problems to make the right decisions. Holman et al. (2007) was able to show that work groups with diversity fault lines are allay able to effectively use their informational diversity if they believe in the value of diversity. Having a work group with pro-diversity beliefs will in fact provide the organizations with a competitive advantage.This will resonant in the organizations short and long term plans (Olivares, 2011). They were able to find a significant main effect of diversity beliefs indicating that groups with pro-diversity beliefs performed ameliorate than did groups with pro-similarity beliefs (Holman et al. , 2007, p. 1193 ) in terms of writ of execution. This demonstrates that we must evaluate the employees values t o be for certain that we manage diversity effectively and take into account the significance the pro-diversity beliefs have on the outcome of our employees.If you have a diverse work group and ineffective EDM that does not value employees you will not be able to create innovative nor will creativity, and that creates a negative attitude among the employees. The wish of EDM would be a value destroyer, the major reasons effrontery for value destroyers in organizations were a bad attitude or very poor scheme (Pohlman, 1997, p. 9). What are some steps that can be taken in order to make sure that organizations value diversity and therefrom maximize value over time? Jones and George (2010) summarize effective diversity management into three steps.The first step is to secure top management commitment (Jones & George, 2010, p. 164). Without the buy-in of the top leaders of the organization incorporating effective diversity management would be unsuccessful. Top managers need to develop the correct ethical values and surgery- or business-oriented attitudes that allow them to make appropriate use of their human resource (Jones & George, 2010, p. 164). The second step is strive to increase the accuracy of perceptions (Jones & George, 2010, p. 164).Managers need to be capable to different views and different perspectives and encourage the same among the entire workgroup (Jones & George, 2010). It is also principal(prenominal) for the mangers to not be judgmental of the person and also be free to change their views about the person, issue or event that is taking place. The pass away step is to increase diversity awareness (Jones & George, 2010, p. 164). Most people view other people from their own perspective but the organizations should make sure they have some type of diversity awareness syllabuss (Jones & George, 2010, p. 64) in order for the employees to appreciate diversity. A clear example of one way UPS is increase diversity awareness is through with(pred icate) a schedule called Urban Internship Program. The program has been around since the 60s. The program takes managers in the upper level and some middle level managers out of their usual habitats for a month and sends them to work in communities where they might serve meals to the homeless, help rid communities of ghetto and drugs, help unsettled farm workers build temporary houses and schools, or teach teachers to manage a classroom (Filipczak, 1992).The mangers are drafted and there is no option of saying no to this program. The rationale behind it all is simple. Being aware of an issue is not the same as knowing about it, and knowing about it is not the same as doing something about it (Filipczak, 1992 p. 43) Olivares (2010). That is an example of a program that can be use in order to increase diversity awareness, therefore maximize employee value and in turn maximize customer values over time. Business EthicsEthical practices in organizations unquestionably add value and e nable corporations to build a competitive advantage. The theory behind Market-Based Management is that the principles of a free and democratic decree where people live work and expatiate without unnecessary government restriction apply not only to society but to businesses as well (Gable & Ellig, 1993). In successful companies like UPS, strong corporate values and ethics are the underpinning of an effective business model.Scott Davis, chairman and CEO of UPS states, UPSs strong reputation for ethical behavior has enabled us to attract and retain the best people and loyal customers it has opened doors for us in new and emerging global markets, and allowed us to transform our business to come over changing customer needs. As we continue to taste ways to open doors in new and emerging global markets, our commitment to ace will allow us to do so (UPS, 2004). UPS utilises market based practices in its business model by empowering employees through extensive cooking and its polici es and procedures.UPS develops employees careers and promotes from within by emphasizing that employees must continually seek out positions with greater responsibility (UPS, 2004). In addition, UPS creates vested interest in the company by employees since if offers stock ownership. As a business strategy and value adder over time, UPS believes that if it provides excellent employment opportunities and an excellent work environment for its employees, they will in turn provide excellent quality customer service and value to end users.UPS is viewed as an industry leader in ethical business practices, business ethics and corporate loving responsibility. beardown(prenominal) corporate ethics have profoundly affected UPSs ability to compete and excel in the transportation and logistics industry. Value Management theory states that what is valued drives action (Pohlman, 1997). UPS values its employees, which it treats like its customers. This is demonstrated through its ethical corporate structure. One of the business strategies employed by UPS is that they recruit talents with diversity in mind.According to Armstrong, et al. (2010) diversity and equality management systems seek out employees to fill talent deficits with employees that are more similar to customers and who can better communicate and relate to the needs of the customer base. This type of strategic human resource management is associated with higher business performance and added value over time. UPS does not hire simply to fill quotas but because it is the right thing to do, not only from both an ethical and moral imperative, but also a business driver.Market-based management practices dictate that moral decisions are not at odds with advantageousness rather doing what is right enhances profitability over the long term (Gable & Ellig, 1993). Corporate social responsibility (CSR) programs have become widely used as strategies for organizations to demonstrate their business ethics. These programs ca n be expensive and it is questionable as to their overall impact on creating competitive advantage for the company. There are three drivers for CSR in most corporations contour to prevailing laws to avoid legal problems, ethical convictions and a reduction in waste and increase in profitability.Even though CSR programs can be costly if stakeholders, like the public, feel that they are not being served by the way the organization conducts business sales generally suffer. UPS uses CSR programs such as the antecedently mentioned Community Internship Program (CIP) where managers spend four weeks with a non-profit agency in rural or urban areas in an effort to improve conditions in those areas, and to gain insight into walking a mile in another mans moccasins. Market-based management shows that pro-social behavior expediencys society as a whole as well as the bottom line of an organization.Trustworthiness is a source for competitive advantage in organizations and its link to wealth i ntroduction over time. If the organizations leaders generate an environment of charge the following occurs higher employee commitment, better interpersonal relationships between employees and management, a stronger social contract or connection between the employee and the organization and a more positive view of human resource policies and procedures (Caldwell & Hansen, 2010).Consequently, the employee bring energy, passion and kindling to his/her role that affect what the person is willing to contribute to the organization and this becomes an terrible source for competitive advantage and value over time (Caldwell & Hansen, 2010). Market-based management states that a culture of genuine humility and aboveboardy must be established in order to achieve organizational learning and profitability (Gable & Ellig, 1993).UPSs mission statement includes principles that promote honesty and honestness through strong corporate leadership that are driven by honest relationships and ethical decision making. The mission of business in a market based society is profit. The business outcome in a bourgeois society is that both the business and the stakeholder benefit from the system. Because there is a power differential between the organization and the stakeholder there is always a run into for an abuse of power. This is where the importance of ethics comes in.Since the stakeholders (employees, customers, stockholders, the community, etc. ) are directly squeeze either beneficially or negatively by the actions of the company, it is pivotal that business ethics are in place and operational to reduce stultification and maximize business objectives. Robin (2008) states that business should treat each stakeholder group as if they were partners in the success of the unswerving. In other words, what benefits the stakeholder creates value and benefits the business.This ties into Market-based management because when businesses practice adherence to commonly acknowledged bus iness ethics (it) makes us all wealthier by reducing the amount of resources we have to hallow to contract negotiation and enforcement (Gable & Ellig, 1993, p. 21). UPS follows a strict adherence to formalized codes of behavior and procedures to ensure business goal are being met while fair and ethical standard are being practiced. Boesso and Michelon (2010) studied the link between corporate social responsibility (CSR) and financial performance of corporations.The research indicates that CSR must be strategic in order to result in the greatest gain for business and generate value over time. Companies which focus on a few core issues rather than hundreds of more generic issues find better success in competitive advantage and better benefit to society as a whole. Furthermore, the research indicates that increased competitive performance and outcome can also be measured by items other than financial performance. Productivity, innovativeness and human capital are also indicators of co mpetitive advantage and value over time.As well, the researchers point out that part of the economic value of CSR and stakeholder management is that it brings companies and society together because of the value generated for all parties. The underpinning of market-based management is that it recognizes that the market system is designed to enable groups of people to achieve brilliant results when working together that are exponentially greater than could be achieved if they were working separately. Organizations like UPS have a big picture view of CSR as a value-adder and utilize best practices that benefit the organization and ultimately society as a whole.Ethical management alone does not guarantee success for a company. Ethical corporate values and practices are but one subdivision of an entire set of practices that lead to competitive advantage and success. Empowering employees through market-based management techniques and a strong commitment to employee tuition is a fundame ntal value driver. Ethics as a whole in business is crucial for long term value creation and sustainability for the organization. Globalization In the competitive environment of global markets, value driven management and adherence to special(prenominal) requirements must be considered before entering these markets.A business management strategy, such as Value Driven Management, signifies the comprehensive success of a company over time (Pohlman, 1997). In determining long-term results, organizations must also understand the factors and driving components that are crucial to creating these opportunities in global markets (Sherwin, 2010). through and through understanding political, economic, demographic, legal, and socio-cultural factors, companies can enter these markets and compete successfully against other companies (Jones & George, 2011).It is important for the companies to know the impact of these external factors is processed and greatly affects a firms outputs that are the products and/or services produced and the markets targeted and penetrated that impact the overall performance of the firm (Sherwin, 2010, p. 66). It has been presented that for companies to create the greatest opportunity of output of good and services requirements, such as, Customer Relationship Marketing, CRM and New Product Development, NPD will be needed.When organizations move from one environment to another, decisive measures must be implemented in order for the consumer within that culture to accept the goods and services offered by the company (Ivanova & Castellano, 2011). By mean of CRM or Customer Relationship Marketing, is one of the strategies used towards incorporating Value Driven Management. This is a philosophy that is based upon leadership perspectives regarding differentiating customers and prospects by current and future value and meeting individualized and customer needs (Sherwin, 2010, p. 9). An example of Customer Relationship Marketing is when UPS expanded int o Canada, its first global market in 1975. At first, when entering this market, UPS was not given the license needed in order to drive it trucks on their highways. To meet the needs of the government and quiet down perform deliveries for it customers, UPS decorated taxis with their company logotype to transport and deliver packages in order to accommodate government regulations (United mailboat Service, 2007).To satisfy these needs or regulations of the government, it became the responsibility of top-level management or company values to create strategies and procedures in order to allocate their resources effectively (Sherwin, 2010). UPS still continues to do business in Canada today because it had gained the trust of government officials and subsisting customers by determining their need through their current and future value by using Customer Relationship Marketing strategies. This would not have been realized if top-level management did not comply with overall country values .It is crucial for companies to determine the owners value, or the overall companys value and the importance of emphasizing the benefits that maximizing value over time has on an organization. It is not to imply that other values are not equally important, but we must understand when we are working in an organization our job there is to maximize the value for the owners. When all is working well, the values of employees, customers, suppliers, third parties, and owners will be in harmony (Pohlman, 1997, p. 21). on a lower floor these conditions, eginning with top-level management, they must strategize or develop a stake plan to utilize every resource, asset, or opportunity within the company to gain a competitive advantage over competitors within the bounds of the global market they are penetrating. For these reasons it is imperative and recommended for companies to use Customer Relationship Marketing with the values of the company to obtain a competitive advantage over time. In or der for companies to succeed in the global market, innovating new products and services are necessary to obtain sustainable competitive advantage (de Brentani, et al. 2010). Product innovation and the trend to globalization are two important dimensions driving business today, and a firms global new product development (NPD) strategy is a primary determinant of performance (de Brentani, et al. , 2010, p. 143). One quality example of this, is in 2004, when UPS designed and introduced Quantum ViewSM Manage, this would allow for consumer who sent the package to effortlessly monitor the transportation of small parcels within the bound of their supply bonds and improve services by using technological applications created by UPS (United Parcel Service, 2007).In creating this application, this allows UPS to further globalize itself by introducing innovative services such as the Quantum ViewSM Manage. In the case of UPS, initiating a new product development strategy is a crucial element to wards product innovation if companies are to discriminate any barrier to entry (de Brentani, et al. , 2010). To successfully implement a new product development strategy, ideas will originate from organizational culture and elderly management (de Brentani, et al. , 2010).It is the environment within the company that shapes the design and direction of innovative ideas and services that will be used and incorporated into global markets. Thus, both the strategy factors as well as certain intangibles characterizing the firms behavioral environment (BE) have been found to affect global NPD program outcome (de Brentani, et al. , 2010, p. 144). Without the role of management and culture within the organization, companies will not be able to produce more economically or create value for its customers in the global market in which they are want to penetrate (de Brentani, et al. 2010). Conclusion In conclusion, organizations that incorporate strong and functional organizational culture, an effective management style, diversity, and ethics will sustain a competitive advantage in the 21st century only if they value the needs of their employees, customers, owners, countries, and organizations globally. Organizational culture will identify how a company will operate in the market, how they will behave in day to day operations, and how they will be able to adapt to change.Management styles empowering employees will allow them to take more initiative within their work responsibilities which will lead to increased job satisfaction. The authors recommend fro UPS to continue to have an organizational culture that provides an environment which supports the established goals of the organization. For organizations to stay competitive in the 21st century is get more and more essential for them to stay on top of their game Second recommendation is to incorporate an effective management style that encourages employees to have more autonomy.This will allow them to take initiatives in decisions that need to be made within the organization. . Effectively managing employee diversity and making sure that the customer, employee, owners, organization, and external values are all in tune with each other is the mix that is needed in the 21st century in order for an organization to be competitive in todays global environment.Third recommendation is to continue to manage diversity effectively and that will enable the group to come up with creative and innovative ideas that will put the organization first in their industry Once the key pillars are defined we need a strong business ethics to chorus from questionable practices and set standards that meet or exceed moral and legal measures. Fourth recommendation, it is important for organizational members to be responsible for maintaining a superior level of ethical behavior.Last but not least is to make sure we are valuing and adapting to the customers needs globally in order to maintain a competitive advantage in the gl obal marketplace even it core to change the organizations strategy overseas. If UPS fails to follow these key pillars that are necessary in the 21st century it can impact their global operations in both the short and long term. Our recommendation to UPS is for them to continue what they are doing and also continue to evaluate the needs of their customers, employees, owners, rganization, and countries in which they operate to remain successful in todays globally expanding market on a quarterly base.