Abstract
This research study draws on the core competence and value of sustainability in automotive as well as power generation industries in United Kingdom and Nigeria as supported by such comparative case analysis as the main research method being utilized of those industries focused within the dissertation study particularly Honda as part of the automobile industry and Siemens as part of power generation industry. Thus, there can be integration of such competence and sustainability framework that are essential for the industries involved as supported by such questionnaire responses through Likert scaling method as gathered in lieu of determining ideal outcomes of competence and sustainability within automotive and power generation industry in UK and Nigeria. Then, there begins to recognize and adopt positive competence and sustainability factors in giving right amount of understanding as well as application of competence and sustainability theories and concepts as reflected into the background as well as in the literature review section. Thus, explaining certain industry values and principles which are believed to underlie sustainable development that can employ a strong impact on business operations and performance wherein full coverage of industry competence are determined and assessed from within the ideal knowledge centering on business process implication that may reveal such strengths and weaknesses on certain noticeable outcomes of the study.
Comparative model involving such theory assumption can be useful analytical tool, as well as being of considerable intrinsic interest to the researchers in the field of investigative study within the academic field. Indeed, the comparative method is not a new method to reach better grounds for study analysis and awareness thus, by looking at different kinds of automotive and power generation organizations within UK and Nigeria is well and good but can be contrasting among other countries as there adds theoretically sophisticated resource dimension. The method in focus amicably pertains to the industry behaviour as well as the interaction within global industries operating in the United Kingdom and Nigeria respectively and that such impact of competence and sustainability will set forth better business operations and effective marketing options in order for these industries to fully take part in changing the business world into a more advanced transition that may have such substantial reference on the industry’s culture and responsibility.
Table of Content
Overview
This research considers such business paradigm of Honda and Siemens company in terms of realizing ample development in competence and sustainability by means of a system framework thus; looking into methods modified within the preferred model for achieving reasonable process of how such competence and sustainability affects the business in general. Many systems and frameworks that recognize competence skills and continuous sustainable development is truly visible within the industries being served by those companies mentioned that can be within wide range of industry sectors in UK and Nigeria. However, most of the industries carried upon in the study do concentrate on the external side wherein employees can be limited and are being managed in the proper context. This research will then be in form of chapters that will be concerning such availability of resources that may have direct access to related academic studies that may give enough weight on what is being focused on such research findings and application measures however, for the sustainability framework as adopted, current and future drivers of industry change must be known and considered within the competitive markets in auto and power generation industry.
Thus, managing sustainable industry in direct value then, will require a system that provides appropriate access to competence skills acquisition and ongoing development through substantial process denoting such impact on the business as involved that must bring tangible benefits to the management and its team according to industry be engaged in competence and sustainable growth. Then, by means of discussion and consultation with the industries executives such as the stakeholders, there can be possible example of competence framework wherein sustainable setting can incur positive features that could be appropriate for business functionality and effectiveness by such UK and Nigeria affiliated industry sectors. Feedback from these industries particularly at Siemens UK and stakeholders indicated that no one model in its entirety would fit with their requirements, but selected features and benefits could form a model for consideration. It was noted that the framework should therefore be based upon industry defined standards of competence (National Occupational Standards) that demonstrate whether a worker is ‘work ready’. Recognition of competence against this status and quality assurance could be achieved through a number of ways for new entrants and those already in the workforce. Then, the competence model would provide a mechanism for staff appraisal, assist in the creation of employment contracts and act as a recruitment tool as some industries felt that there is a need for harder pay-off, such as reduction in insurance premiums as well as tax payments.
Moreover, at Honda business there maybe a required demonstration of technical competencies into the work status, such as specialist operation of equipment or veterinary knowledge, these must be defined by industry operations and, together with better job competence’ and so, mechanism that allows for continuous sustainable recognition and development at Honda is welcomed. Thus, better management systems could be developed or links to existing quality standards established as the research is aware of complete analysis associated with the competency framework, as both in terms of the business and individual costs and gains, plus the wider government social and economic targets. The physical resources required initiating and sustaining a framework, including the procedures for recognition of prior achievement and quality assurance are considered. However, what is clear is that it is the overall benefits to industry and the workforce that is paramount. The unique aspect of this research study is that it involves research into the extent to which core competencies gives organizations in the automotive and power generation sectors in UK and Africa specifically in Nigeria, strong sustainable environment advantage. It also intends to researching the occurrence of similar or dissimilar core competencies development (and/or deployment) patterns within the two industries It is an intention to deduce the core ideas and processes involved in the development and deployment of these core competencies in order to evaluate how these can be transformed into relevant, specific ideas/processes for other companies.
Aims of dissertation
The project aim is to assess the extent to which core competencies impact on sustained business success. The major reasons for the project is that it is hoped that the knowledge gained from the project will be deployable across different industries and also possibly provide a framework for future work on how to further improve organizational performance through core competencies in most industries.
These major reasons for carrying out the project are further elucidated in the following points.
- To provide a means of improving an organization’s competitive positioning through the application of the knowledge from the thesis
- To provide a means of improving an organization’s overall performance.
Objectives
· To understand the concept of core competences and how they fit into the operational structure of an organization.
· To research the business development of the automotive and turbine sectors in general, and in the UK and Nigeria in particular and to understand the reasons for development.
· To identify the differing core competencies within each industry and to compare and contrast the change of these overtime.
· To research the impact that core competences can have, in theory, on business success.
· To relate this theory to practice to determine the extent to which core competences have impacted on, and are impacting, sustained business success.
· To identify barriers to adoption of core competence best practices within both industries, and to make recommendations for the future.
Chapter 1: Introduction
The issue of core competencies is an essential one for businesses today. Its importance not just to the engineering environment, but also beyond it, cannot be overstated. Organizations are increasingly observing that it is no longer enough to be better than their competitors; they must also be able to learn faster than them and develop greater abilities to meet existing and expected customer satisfaction requirements. Historically, companies have sought to find market niches, to develop particular areas in which their competence can be developed, deployed and exploited. The current state of high as well as changing customer satisfaction requirements necessitates that companies evolve their strategy such that they can develop competencies to match the trends of customer requirements.
However, being able to develop core competencies that will create enabling environments for sustainable success requires that organizations be able to:
· Learn from other organizations that have been able to adapt and/or evolve their core competencies.
· To identify customers requirements and identify the differing core competencies accordingly.
This thesis fits into an industrial framework by proposing a framework for developing, implementing as well as adapting core competencies, evaluating their effect on organization performance and their impact on competitive positioning.
The leading industries of automotive and power generation can be adopting competence and sustainability approaches for keeping and valuing ample industry resources. For example, standard linear supply chains progressively exhaust the reservoir of nonrenewable resources and excrete waste, noxious substances and pollution along the chain, producing ‘bads’ as well as valued ‘goods some organizations are moving to replace supply chains with virtuous cycles of resource use which create ‘supply loops’ that eliminate polluting substances and effluent and redefine the remaining ‘waste’ as valuable resources to be reclaimed, recycled and reprocessed. Similarly in such operational situation, these industries may have used people as industrial cannon fodder to be exploited, burned out, used up and divested. In the new world of work, people are seen as the prime source of wealth and as having value in and of themselves.
In the knowledge based society, commitment, knowledge and skills are vital to corporate success. It therefore makes sense to invest in the development of all corporate members in order to build the human capabilities that create continuing innovation and high performance. Fortunately, the basis of corporate performance and productivity is changing. We are moving from a world where wealth was based on material production and the acquisition of material possessions, to a world where wealth is increasingly based on knowledge production and the availability of services. In the past it may well have been accurate to posit a clash between the push to increase productivity and the need to protect the environment. The need to incorporate a concern with competence and sustainability into real-world decision-making partly accounts for the interest in sustainable development. Stimulated initially by the Brundtland Commission, sustainable development began to carry the hopes and aspirations of peoples and governments. It also came to accumulate more conceptual and political baggage than had encumbered competence and sustainability as such, political coalitions have grown, in UK as well as other improving countries such as Nigeria that cut across class, gender and ethnic differences, to advance the goals of sustainable development and become rallying point for new forms of social and political activity.
Chapter 2: Background
Ideally, UK’s automotive industry does involve pivotal part of UK manufacturing sector as it is true that such, automotive firms are leaders in global practice in the area of manufacturing that does provide ample resource for such operations to function well and will develop positive competence among other leaders of the industry as a whole. Thus, there maybe instances that UK and Nigeria in terms of competence and sustainable factors will stabilize such management reality that may come along their business that will help such sectors as a means of inward investors to bring in such acceptable degree of sustainable culture and knowledge within the organization. Aside, certain operational practice and skills within the business industry, the automotive and power generation in particular does provide good process in which such competence and sustainable environment will be in the best service. For instance in UK, the situation that Britain leads Europe as a diverse and productive vehicle manufacturing location and as global centre of excellence for engine development and production as there were more than 40 companies manufacture vehicles in the UK. The industry then is supported by dynamic supply chain including many of the world’s major component manufacturers, technology providers, design and engineering consultancies; and it benefits from a world-renowned knowledge base.
Automotive Industry: Honda (UK and Nigeria)
‘Automobiles are an essential part of modern living and from light trucks to minivans to sports cars as Honda continues to transform original ideas into unique vehicles. Delivering unrivaled driving enjoyment and turning trips with family and friends into memorable occasions’ (Cited from, Honda UK, 2006 Report)
Honda (United Kingdom)
During the fiscal year of 2006, unit sales of automobiles rose 4.6%, to 3,391,000 units, mainly due to strong sales of completed vehicles in North America. Net sales in the automobile segment increased 14.9%, to ¥8,004.6 billion, due to favorable exchange rates and higher unit sales mainly in North America and Europe. Operating income jumped 38.9%, to ¥628.3 billion (including a ¥115.9 billion gain on the return of the substitutional portion of the Employees’ Pension Funds to the Japanese government), and the operating margin was 7.9%. It should be noted that this figure for operating income does not include income from affiliates in the UK as well as other countries. However, such income of these companies is reflected in the Company’s net income as shown in the figures below.
Source: Honda Company Report (2006). Honda Review
In Europe, overall automobile demand remained almost unchanged in calendar year 2005, at around 17.66 million units. Nevertheless, Honda’s unit sales in fiscal 2006 climbed 9.0%, to 291,000 units. This was due mainly to increased sales of the five-door Civic, released in January 2006, after a full model change that resulted in a well-received sporty and sophisticated design, and the FR-V series, which benefited from the addition in August 2005 of a version with the Honda-developed i-CTDi*1 diesel engine, and continued robust sales of the Jazz. To meet growing demand for diesel-powered vehicles in the region and to strengthen our manufacturing system, Honda of the U.K. Manufacturing Limited began assembly of diesel engines. We included a diesel model in the new five-door Civic line, and the Accord, CR-V and FR-V are also available with Honda-developed diesel engines. In these ways, we enhanced our competitiveness in the extremely challenging European market.
In Nigeria, the area of sales and service, Honda will continue striving to maximize lifetime customer satisfaction through various initiatives, including our strategy of integrating domestic sales channels. The Honda CR-V, our compact SUV, will undergo a full model change. In the light truck segment, Honda will further strengthen and upgrade our lineup, with an emphasis on both performance and fuel efficiency. In the passenger car segment, Honda will continue broadening our offerings to meet growing demand for fuel efficient models. For example, in addition to the Civic, which underwent a full model change in September 2005, we began sales of the Fit in April 2006. In these ways, we will target further sales growth in North America by introducing highly attractive models in both the light truck and passenger car segments. In addition to boosting production of completed vehicles, Honda will strengthen their local manufacturing capabilities with respect to powertrains. For example, Honda expects to begin producing automobile powertrains and will increase production capacity to meet growing demand. In India, for example, we will begin making Civic models in July 2006 as a footboard for annual capacity of 100,000 units by 2010. Despite entering the automotive industry as late as 1963, today Honda makes a wide auto lineup for a world of diverse needs and lifestyles, bringing the joy of driving and outdoor enjoyment to millions of satisfied customers. Honda sales and product development activities are increasingly successful, one of the largest automotive market but also in many regions worldwide. For instance, a total of 16 million civic Hondas’ have been sold in 160 nations, and in 2005, Honda designed a full-model change of this popular vehicle and started global production of the eighth-generation Civic. Honda’s unique innovation has earned respect worldwide. That’s how we now sell a yearly total of more than 3.5 million vehicles around the globe. Thus, Honda’s outstanding R&D has introduced a long line of unique technological achievements to the planet. These include the low-emission CVCC engine, first to comply with the 1970 U.S. Clean Air Act; the VTEC powerplant, which uses variable valve control for high fuel efficiency and high performance; an anti-lock braking system (ABS), which helps maintain vehicle stability in emergency braking. Moreover, there are numerous recent innovations in natural gas, hybrid, and fuel cell vehicles. The Honda commitment to eco-friendly car-making knows no limits, because it’s our responsibility to the world.
Power Generation Industry: Siemens UK and Nigeria
Siemens is one of the premier companies in the international power generation sector providing leading-edge power and energy solutions. It develops and builds fossil fuel power plants and power-generating components as well as wind turbines, turbines for use as mechanical drives and compressors for industrial applications. Instrumentation and control systems, fuel cell technology and extensive services round out the portfolio. Excellent customer service with the right quality to increase customer benefit is at the center of our business.
Siemens (United Kingdom)
‘Siemens is a leading technology company providing innovative solutions to help answer the world’s toughest questions confronting industry, healthcare, energy and the environment. Siemens has been doing business in the UK for 162 years. Today, we provide innovative, high-quality solutions to customers and are behind nearly all of the technology and services people take for granted in every day lives’ (Cited from, Siemens UK, 2006 site) Power Generation Siemens Power Generation is number two worldwide in supplying and servicing power plants.
This includes turnkey power stations to turbines, generators, electrical and electronic equipment and other key components.
Operating Plant Services
Siemens Power Generation provides an extensive range of on-site maintenance services. Its facility at Newcastle, with over 100 years of turbine manufacturing and engineering competence, provides services for a wide variety of power generation equipment.
Energy Solutions & Products
In partnership with its affiliates, the company designs and builds fossil-fuelled and hydro-electric power plants, as well as renewable energy and CHP plants. Siemens Power Generation and its affiliates have built around a third of the UK power generation fleet.
Control & Instrumentation
Siemens Power Generation provides tailored control and instrumentation products, services and solutions to more than 80% of power generating companies in the UK.
Radiation monitoring
Siemens Power Generation’s radiation monitoring (Radmon) business has been designing, manufacturing and supplying detection and monitoring systems for a diverse range of nuclear applications for more than 40 years. The business, which has ISO 9001 accreditation, has served both civil and military radiation users with a variety of specialised products. Today, Radmon provides much of the Royal Navy’s submarine reactor instrumentation and systems, as well as those for many other navies around the world. It also supplied and maintains the UK’s wide-area environmental gamma radiation monitoring system, RIMNET.
Industrial gas turbines
At Lincoln, more than 2,000 employees design, manufacture and maintain small gas turbines. The facility exports around 85 per cent of the equipment it produces to power plant operators worldwide.
Wind Power
Siemens Power Generation offers itself as a turnkey contractor for developing Wind Power within the UK. Wind farms offer pollution free power in to the national power grid. Siemens follows the project from feasibility through to construction and finally operation and maintenance. As a partner, Siemens offers high quality products and solutions, partnered with technical know and project financing opportunities.
Today, Siemens design and manufacture products and systems ranging from traffic lights, gas turbines and turbine spares to the superconducting magnets used in medical scanners and the drives that are behind many of the UK’s manufacturing plants. More than half of our turnover in the UK comes from the provision of services, such as managing back-office processes for Barclays to maintaining a fleet of electric trains on the South West Trains network.
Financial figures
Model for competence evaluation
Model for competence charting
Impact that core competences can have, in theory, on business success
Building of organizational competencies
The term core competence emerged on the management scene in the classic paper “The core competence of the organization”, by Prahalad and Hamel (1990). According to those authors, core competencies are built on intangible assets that cannot be easily imitated by competitors, are the source of the company’s ability to deliver unique value to its customers, and allow the company to be flexible in terms of markets and products. Core competencies are not necessarily related to technologies strict sense: they can be the outcome of excellence in any business function. Notwithstanding, to be a core competence in the long run, any company has to manage a systematic process of organizational learning and innovation, which basically relies on human resources development and education. In practice, the utilization of the concept poses some difficulties: the precise identification of the core competence is not trivial even for the participants of the firm (Porter, 1996; Gilgeous and Parveen, 2001) to build a typology of competencies; we followed the approach used by Woodward (1965) in her classic book Industrial Organization. Thus, we assumed that every firm must concentrate on the development of one among those three competencies; that is the competence in which the firm has to excel to be competitive and competitiveness will be optimized when there is a correct alignment of the core competence and the firm´s competitive strategy. We do not assume that the other two competencies should be left aside; rather we understand that the development of these competencies should always reinforce the core competence. For example, in cases where operations is the core competence and product development and sales and marketing are supportive competencies, their functioning and upgrading should primarily reinforce operations in its dynamic relationship with the competitive strategy of the firm. It is a matter of prioritization and balance among the three competencies.
Operational excellence
Even though we acknowledge the polemics created by Porter by stating that “Operational effectiveness is not strategy” (Porter, 1996), we agree with Hayes and Upton (1998) when they define the “Operation based strategies”: Superior operations effectiveness not only serves but buttresses a company’s existing competitive position; but, when based on capabilities that are embedded in the company’s people and operating processes, inherently difficult to imitate. For this reason, it can provide the basis for a sustainable competitive advantage, even when the company adopts the same competitive position as one or more of its competitors. In this category, we have as role models the enterprises most mentioned in the operations management field: the automotive enterprises, in general, Ford in the past and Toyota in current times. In the electronics industry, Compaq and Dell became the main examples. The objective of a company that adopts the strategy of operational excellence is to offer to the market a product that optimizes the quality/price ratio. In this case, the core competence will be operations, including the whole logistical cycle: purchasing, manufacturing and distribution. That is the competence in which the firm must excel to be competitive and increase its competitiveness.
Process innovation is usually more relevant than product innovation. For example, Honda has recently developed a “revolutionary” type of platform that allows the assembly of vehicles of different models and sizes, thus avoiding the need for a specific type of platform for each size of vehicle. This has a tremendous impact on manufacturing costs. Dell revolutionized the electronics industry with a new concept of supply chain management. In the relationship with customers, those firms acknowledge that diversity kills efficiency. Ford’s famous dictum “The customer can have a car of any color as long as it is black” still makes sense. Therefore, the sales and marketing role is “getting customers to adapt to the operationally excellent company’s way of doing business” (Treacy and Wiersema, 1995).
Product innovation
Companies whose strategy is based on product innovation guarantee their economic success through the systematic introduction of radically new products in the market, usually by making the existing ones obsolete. The core competence is research and development and engineering, the firms that are archetypal of this strategy are mostly mentioned in the technology management literature. In general, industries that are science and technology intensive, such as the IT industries telecommunications, computers and Internet, as well as biotechnology or the biomedical industry would be classified in this category.
The companies that compete in terms of product innovation are continuously investing to create breakthrough concepts of products. They survive and prosper due to the high profitability they achieve in the period where they enjoy a monopolistic market position (Abernathy and Utterback, 1975). The role of operations is different in this type of business. The most important requirement is rapid process development and the implementation of a new production system after a new product has been designed. What matters is the evolution from laboratory to industrial scale; it is not about being “lean”, although this goal might be pursued after that critical stage.
Customer driven
In cases such as that, agile manufacturing is the key concept for the structuring of operations because “market growth will be achieved through increased responsiveness, rapid response and customisation of products” (Kidd, 1994). For this author, “lean manufacturing is not the same as agile manufacturing: … Sometimes the terms are used interchangeably, but this is not appropriate”.
Types of strategies and competencies
The strategy-competence cycle
Determine the extent to which core competences have impacted on and are impacting, sustained business success.
Knowledge is a shared collection of principles, facts, skills, and rules (Stonehouse and Pemberton, 1999). Knowledge can be embodied into a firm’s knowledge assets which consist of its core competences, technology, value-adding activities, processes, systems, procedures, technology, structures, products and services. Embodied knowledge can be regarded as constituting an organization’s knowledge assets through which competitive edge is achieved. Knowledge can be either explicit or implicit. The former is tangible, being clearly stated and consisting of details which can be recorded and stored. Implicit or tacit knowledge is often unstated, based on individual experience and, therefore, difficult to record and store (Demarest, 1997). Invariably, both forms of knowledge begin as individual knowledge but, to substantially improve performance, are transformed into organizational knowledge, an often-difficult feat in the case of implicit knowledge. One of the most important roles of organizational learning and knowledge management is to ensure that individual learning leads to organizational knowledge. However, it is necessary to recognize the diverse nature of knowledge in seeking to understand its potential contribution to the performance of the organization. Knowledge can be specific or generic to varying degrees. This is particularly relevant in relation to the concepts of competences and core competences. Similar competences are usually common in competing firms within a specific industry and, in essence, represent the basic characteristics of successful companies operating within an industry. Core competences, are features of individual firms that give rise to their competitive advantage. Whereas generic knowledge is the basis of the competences possessed by all the firms in an industry, specific knowledge is particular to the individual firm, resulting in core competences and potential competitive advantage (Stonehouse et al., 2000). For example, in the automotive industry, firms possess generic knowledge that underpins competences in design, sourcing, manufacturing, marketing and distribution necessary to build and sell motor vehicles. It is only firms whose performance is above the industry average, according to various measures, which possess specific knowledge and core competences unique to them. Porsche’s specific knowledge of design and engineering technology is at the heart of its core competence and has been an enduring source of competitive advantage. The development of new knowledge depends on access to, and availability of, information. In turn, the creation of knowledge is dependent on “learning” through reasoning and inference. As Nonaka acknowledges, in an uncertain economic and business environment, “knowledge is the one source of lasting competitive advantage” (Nonaka, 1991). Thus, in an increasingly hypercompetitive environment, focusing on organizational learning and knowledge management is seen as a critical route for the rapid development and effective use of knowledge assets that are superior to those of competitors. In short, organizations that learn quicker than their competitors, and as a consequence deploy their knowledge assets most effectively, are better placed to create and sustain a competitive edge. The 1990s have been characterized by the emergence of resource- or competence-based approaches to strategic management. Competitive advantage, it is suggested, is based on firm-specific core competences (Prahalad and Hamel, 1990) or distinctive capabilities (Kay, 1993). Core competences or distinctive capabilities are combinations of resources and capabilities unique to a specific organization and generating competitive advantage by creating unique customer value. Knowledge is inextricably linked to core competence. A core competence must be distinctive, complex, difficult to imitate, durable and adaptable to ensure that it is a source of sustained superior performance. By its very nature, knowledge, specifically tacit or implicit knowledge, is complex and difficult to imitate. Equally, the type of organizational learning apparent in a learning organization results in knowledge-based competences that are both adaptable and durable.
Knowledge plays a unique role in building and conserving core competences. For example, core competences may be based on knowledge of customers and their needs, knowledge of technology and its innovative and distinctive uses, knowledge of products and processes, etc. Furthermore, knowledge of the business environment, of competitors and their behavior, of countries and their cultures, may also assist in building competences that are both distinctive and superior to those of competitors. There are numerous examples of the ways in which knowledge acts as the foundation for competence development and leveraging. Microsoft’s core competences are based on its knowledge of building and marketing operating systems and software. In turn, competitive advantage arises as a consequence of its knowledge of computer hardware and networking, and in-depth knowledge of the organizations producing such products. Thus, one business industry has leveraged its competences in personal computer operating systems and software and developed new associated competences revolving around the acquisition of competitive advantage in computer networking and Internet software. Such competence building and leveraging are essentially knowledge based (Barber, 1998; Pemberton et al., 2000; Stonehouse et al., 2000).
The competence-based approach also emphasizes the potential of collaboration in generating competitive advantage. A network of collaborating organizations allows each network member to concentrate on building highly specialized knowledge and competences that can be shared on a restricted basis within the network, and results in synergies between the various knowledge bases of the collaborating firms. Each network member retains responsibility for, and control of, its own knowledge base, but a pool of network knowledge is created which is greater than the sum of knowledge of the individual organizations in the network. The strength of such an arrangement ensures that imitation by competitors is extremely difficult. By concentrating on specific knowledge areas, the process of learning within the individual organizations comprising the network can be greatly accelerated. Conversely, organizations attempting to build broad-based knowledge may be at risk of slowing the learning process. Ultimately, a learning organization gains sustainable competitive advantage by accelerating learning to develop superior intelligence and knowledge that, when harnessed, produces unique and durable core competences.
Furthermore, networking of knowledge enhances flexibility and responsiveness of the businesses as new knowledge and competences can be acquired by admitting new members with desirable knowledge and competences to the collaborative network. Yet again, the airline industry provides ample evidence of this. New partnerships and alliances within the sector have been the norm for several years (Barber et al., 1993), but developments such as the Internet have meant that additional parties have been enlisted to develop new ways of conducting business using this medium (Pemberton et al., 2000).
Barriers to adoption of core competences best practice within automotive and turbine industries
Most of today’s successful businesses can be considered learning enterprises, of which there are many (Quinn, 1992). Ghoshal and Butler cite the Kao Corporation as a learning organization, its core competence based on an “integrated learning capability” (Ghoshal and Butler, 1992). They identify the key elements of Kao’s learning culture as centering on the principles of equality, individual initiative and the rejection of authoritarianism, supported by a flat organizational structure within which organizational boundaries and titles have ceased to exist. Ghoshal and Butler regard the company’s ICT as an integral part of the learning environment and a means of operating an open access policy by making information and knowledge available to all employees.
Learning organizations learn about learning, they not only Endeavour to learn about their own business, but attempt to understand the processes by which individual and organizational learning take place. In this way, they can improve and accelerate the process of building and applying new knowledge. Quinn cites the case of Intel which was able to accelerate its learning curve by concentrating on key points in the learning process (Quinn, 1992). Similarly, Grant reports that companies such as Andersen Consulting and Skandia have developed corporate-wide systems to track, access, exploit and create organizational knowledge (Grant, 1997). Within such organizations, questioning and creativity are encouraged, as are trust, teamwork and sharing. Furthermore, infrastructures have been created that support learning, assist in the storage and controlled diffusion of knowledge, and co-ordinate its application in creating and supporting core competences. The learning organization is evolutionary by nature. As individuals and organizations share knowledge, it is modified, improved and amplified to produce a new higher knowledge base for the next cycle of growth. The development of knowledge-based core competences is a necessary feature of the learning organization. The resulting adaptability and increased organizational responsiveness ensure that competitors find it difficult to identify, understand and emulate such competences.
Converting knowledge into core competences and competitive advantage essentially depends on sharing and co-coordinating knowledge within the organization and with collaborating businesses. Learning organizations, because of their superior ability to learn and share, appear more able to anticipate and even create new customer needs, thus generating new sources of competitive advantage. This remains a challenge for all businesses, but knowledge acquisition is an integral feature of the cultural and learning environment that exists within the learning organization and one which looks set to equip them for the demands of global business in the twenty-first century.
Knowledge storage and communication
The organizational learning and knowledge management environment
The concept of core competencies is far reaching and diverse. It is a major source of competitive advantage to organizations that seek to gain the leading edge by innovation or specialization. The starting point for analyzing core competencies is recognizing that competition between businesses is as much as race for competence mastery as it is for market position and market power. As such it applies to virtually every industrial set up. Hamel and Parahalad in 1990 defined core competency as the collective learning in an organization, especially how to coordinate diverse skills. Core competencies also relates to various industries as it relates to how each is able to make its most significant contribution(s) to customer satisfaction as well to differentiate themselves from competitors. The implication of this is that the extent of the thesis ranges from companies who simply want to be better than their next door competitors to those that want to be best in industry or even world class. Consequently, in view of the size of the topic, the scope of this work will be restricted to core competencies across two different industries, automotive industries and installation and maintenance of power generation turbines. This is to be able to deduce trends in core competence that have resulted in improved organizational performance in these industries and how these can be improved upon and adopted in other organizations, it will also involve the geographical location of industries in Nigeria and UK, company strength which is about medium or large and finally the time scale of industries, the author is looking at which is between 10 to 15 years of existence.
Source: Hamel, G & Prahalad, C.K. (1990) ‘The Core Competence of the Corporation’. Harvard Business Review, Vol. 68 (3) pp. 79-91
Hayes, R. et al. (2005) Pursuing the competitive edge. New Jersey: John Wiley & Sons Inc.
The term “competence” has traditionally been described in terms of the attributes and resources of an organization that allow it to outperform others in the same industry or product market (Christensen and Fahey, 1984; Kay, 1994; Porter, 1980). In contrast, the term “sustainable” considers the protection such attributes and resources have to offer over some usually undefined period of time into the future for the organization to maintain its competitiveness.
Within this context, “sustainable” can assume a number of meanings depending on the frame of reference through which it is viewed. It can be interpreted to mean endurable, defensible, bearable, tolerable, supportable, passable, acceptable, justifiable, negotiable and penetrable. For example, if the organization is to protect its existing value added against its competitors then the term “sustainable” associates itself with “endurable” and “defensible”. Most discussions of sustainable competitive advantage focus on defensive strategies based on existing resource strengths. For example, Grant (1995) considers the sustainability of the competitive advantage along the dimensions of durability, mobility and replicability. Durability determines how long the competitive advantage can be sustained and is considered in terms of the ability of competitors to imitate through gaining access to the resources on which the competitive advantage is built. This in turn can be considered in terms of mobility, referring to the extent to which resources can be transferred between competitors together with replicability which describes the ease with which resources can be copied by competitors. An example, where durability, mobility and replicability are particularly pertinent, relates to many retailers who derive their competitive advantage through identifying, acquiring and maintaining well-located outlets in addition to the value added stemming from their services and offerings.
While the importance of defensive strategies in protecting and exploiting existing resource strengths cannot be underestimated, securing the long term future of an organization must consider how to derive unique areas of value added in the future. For this purpose sustainability has to assume a different meaning which points itself towards penetrability, for example, in terms of new breakthroughs. This is because the speed at which the uniqueness of the resources of an organization becomes accessible dictates the speed at which the competitive advantage of an organization diminishes. In fast-moving competitive environments, sustaining competitive advantage involves creating safe-havens from cut-throat competition by continuously creating gaps through unique resources that cannot be easily bridged by the competitors (Chaharbaghi and Nugent, 1996). Sustainability is essentially dynamic with many subsets, each depending on the nature of strategic task, sustainability is best considered as a dynamic process rather than a static concept that is locked in time. This dynamic process shows organization functioning within its changing environment over time. In this model, intended strategy is concerned with how the organization sees its environment developing and what resource configuration is best suited for that environment. It will not determine what will happen as the outcome is influenced by unpredictable events such as competitive responses and changes in market value.
Thus, sustainability within the context of competitive advantage is considered in terms of the organization positively embracing change, constantly adapting to altered ways and new demands through introducing new resource configurations, while at the same time preserving the best of its past. Viewed in this way, sustainable competitive advantage assumes two primary pillars: resource management and resource development. The former is concerned with meeting the competition today while the latter aims to satisfy the competitive challenges of tomorrow. The main difficulty, however, lies in the inherent conflict between delivering today and tomorrow. The central focus of the former is on the present using the resources developed in the past, whereas the primary concern of the latter is the future and the resources that will have to be developed for future competitiveness. Without considering both the present and the future there is no context for sustainability. In resolving this conflict, the concept of competitive advantage will not suffice. As new concept is required which helps the organization to develop the ability to remain competitive in the future while exploiting existing opportunities as illustrated below the concept by then is referred to as strategic advantage is necessary if organizations are not to become the prisoners of their past through entangling themselves with resource management to the detriment of resource development.
Furthermore, Buzzell and Wiersema (1981) found that the strategic factors generally involved in market share gains relative to the growth rate of the served market included increases in new product activity, increases in relative product quality and increases in sales promotion. Buzzell and Gale (1987) concluded that “followers” who gained share typically improved quality and they maintained or increased all categories of marketing expenses at rates faster than the growth rate of the served market.
The literature also suggests that high growth companies are characterized by superior performance on a number of competitive devices such as product quality, premium prices and the introduction of new products (Buzzell and Gale, 1987; Day, 1986; Anderson and Zeithmal, 1984; Hambrick et al., 1982). High growth companies grow by building on existing strengths and by emphasising corporate relatedness (Rumelt, 1979; 1974; Woodward, 1976; Channon, 1973). Businesses that diversify but restrict their range of activities to a central skill or competence show a higher rate of profitability and growth than firms that diversify into unrelated areas (Rumelt, 1979; Channon, 1973). Organizations are constrained by the external environment they operate in and consequently organizational growth can be explained in terms of these environmental forces (Aldrich and Fiol, 1994; Romanelli and Tushman, 1986; Aldrich, 1979; Bain, 1956). Industry factors have a significant impact on both levels of profitability and the levels of growth (Schmalensee, 1985; Porter, 1980). For those businesses that achieve growth, profitability may be inherent in the growth itself and not due to managerial choices (MacMillan et al., 1982).
Furthermore, other impact factor could involve the lack of awareness of the potential of sustainable logistics and intermodal solutions. For some journeys, automotive business can be most efficient if being combined by options into which competence are adopted and realized that will make industry operations more efficient, cost-effective and sustainable upon helping UK and Nigeria economies to become more competitive in the global business milieu. Aside, the power generation business can ideally promote such better competence approach and suggests ample application of sustainability into Siemens business in which there is gradual evolution towards better framework that can be through performance assessment and level of industry schemes which will promote an ideal pattern of competence effectiveness. Generally, the impact of competence and sustainability within such business can be noted that such industries within UK is being characterised by significant foreign direct investment and high exports, equivalent to 11% of the UK’s exports of goods. Overall, automotive manufacturing provides 194,000 jobs and contributes some £9.5 billion value-added to the UK economy. The companies based in the UK operate in Europe’s third biggest automotive market with UK customers in 2007 accounting for the purchase of more than 2.4 million new cars that can be equivalent to 17% of European vehicle registrations.
Thus, there is impact on setting standards for operations as the industry is at the forefront of process improvement setting standards for other sectors, such as aerospace and is characterised by economies of scale and low unit costs, despite the increasing complexity of its products. In 2007, 1.5 million cars and just over 216,000 commercial vehicles were produced in the UK. Of these, more than 77% of the cars and 61% of the commercial vehicles were exported. There are around 2,600 component manufacturers in the UK, ranging from the global players to small and medium-sized businesses.
Together they contribute over £4.5 billion added value and employ around 115,000 people. The components sector exports over £5 billion worth of goods annually, 75% destined for Europe. The UK is also an increasing force in power train design and production as there can be components making up the power transmission system of a motor vehicle from engine to final drive with a particular strength in engines. There is a long-established, independent, design engineering sector offering the full spectrum of services from concept design through to limited-series vehicle production. The sector is recognised internationally for its flexibility and responsiveness and for the innovative qualities of its engineers. It continues to evolve and the last five years have witnessed a succession of acquisitions, closures and re-emergences in response to the changing demands of its global market. The UK is also strongly influential in vehicle styling, with many British designers and graduates from British institutions directly employed by vehicle manufacturers around the globe. As a direct result of this expertise, Nissan recently moved its design studio from Germany to London. In addition, it may also have impact on environmental protection and safety legislation are set to strongly influence the number and type of vehicles that will be manufactured, marketed and used.
The focus within Europe will be on securing these environmental benefits while generating competitive advantage. However, some of known industry analysts expect South East Asian manufacturers to dramatically increase their global market share. But with the UK’s close focus on efficiency, productivity, innovation and value-added manufacturing and its cross-section of international manufacturers, the industry is well placed to face these challenges with confidence. Moreover, one evident outcome points to globalization of business and its marketing industry as the industries were truly dynamic as the major automotive companies are attracted to the UK by an unrivalled combination of engineering excellence, skilled and flexible workforce and such government that strives to create an excellent business environment for companies to prosper by whether domestic or with foreign parents. One of the great strengths of the UK automotive industry is a deep understanding of globalisation and an ability to continuously evolve and create new opportunities in the face of change. Over the last 20 years there has been a revolution in the way vehicles are manufactured, with a streamlining of production processes, elimination of waste and focus on quality, cost and delivery. It can be said that the automotive industry in the UK now rivals that in any country in the world for its combined efficiency, quality and unit cost.
Due to ample competence and adaptation of sustainable milieu there can be impact on foreign investment that such sector does include some 3,300 firms. The majority of vehicle manufacturers and first-tier component suppliers are overseas owned, all treated equally by the Government. Seven of these are volume car manufacturers with number of truck, van and bus companies, supported by 19 of the world’s top 20 suppliers. The list includes, for example, BMW (MINI), Ford light commercial vehicles and engines, GM (Vauxhall), Honda, Jaguar and Land Rover, Nissan and Toyota. Suppliers include Aisin, Bosch, Calsonic, Dana, Delphi, Denso, GKN, Johnson Matthey, Pilkington, Siemens VDO, TRW, Visteon and many more. Then, there are a number of manufacturers producing high value and luxury vehicles serving niche markets, including Aston Martin, BMW, Caterham, Connaught, Gibbs, McLaren and Mercedes-Benz, Morgan, Proton, TVR and VW. There are also major companies from the construction equipment, heavy plant and off-road sectors such as Caterpillar, CNH, JCB, Komatsu and Terex, all manufacturing in the UK.
Source: Department for Business Enterprise and Regulatory Reform BERR (2008). Automotive: Europe’s most diverse and dynamic automotive industry at: http://www.berr.gov.uk/sectors/automotive/index.html
UNITED KINGDOM
According to research, BMI has restated its full-year sales estimate for the UK car market in the latest despite the upturn in new car registrations reported in November 2007. During that month, new car sales jumped by 2.2% year-on year (y-o-y) to 158,735 units, while they rose by 2.49% y-o-y during the period January-November 2007 to 2,266,047 units. While industry observers such as the UK’s Society of Motor Manufacturers and Traders, have raised their outlook for the remainder of the year, BMI expects sales to have slowed in December, a traditionally slow month for car sales. By carmakers, Ford maintained its lead on the market even though the company’s new car registrations tumbled by 10.7% against the same month a year earlier to 21,072 units. Ford’s sales were nevertheless buoyed by the popularity of models such as the Focus, which, during the period January-November 2007 lifted the carmaker’s sales to 327,126 units. Second-ranked Vauxhall continued to close the gap on Ford, with sales during the 11-month period of 311,061 units, an increase of 9.11% y-o-y. Volkswagen completed the top three, with its sales edging up by 3.35% y-o-y to 184,116 units.
As mentioned above, Business Monitor International (BMI) maintains its sales forecast of 2.309mn units given that December is a traditionally slow month during which sales will decline. We have also adjusted our forecast for imports to reflect the close relationship between these two items. We are also cautious going forward given that questions are being raised about the sustainability of current levels of consumer spending. According to BMI research, personal debt levels continue to increase and now stand at a massive GBP1.3trn. Consumer confidence may fall this year, particularly given the high exposure to shocks such as the recent credit crisis. Indeed, SMMT is preparing for a tough time in early 2008. In terms of industry developments, Fiat continues to target sales growth in the UK. According to industry sources, the Italian carmaker will open a new dealership in the heart of the country’s capital in early 2008. Fiat Marylebone will be located close to London’s busy Oxford Street ensuring maximum foot flow, with customers being able to learn more about the carmaker’s complete range of vehicles.
Source: Business Monitor International (2008). The UK Autos Report 2008
http://www.businessmonitor.com/autos/uk.html
NIGERIA
Nigeria’s recently privatized automotive industry is at a crossroads, with the potential for considerable growth limited by an unfriendly business environment and lack of proactive government support for the objectives set down by the National Automotive Council (NAC), according to BMI’s latest Nigeria Automotives Report. Most of Nigeria’s six vehicle assembly lines operate well below capacity, although some are well equipped. Throughout 2006 and 2007, the federal government and some state governments reduced their ownership of the automotive industry. However, with a relatively small and volatile domestic market and enduring problems of corruption and political instability, foreign partners have largely lost interest in Nigeria. Consequently, the new core investors are locally-owned firms, which lack the expertise and capital to revive the sector. The NAC has established the Automotive Development Fund (ADF) to award loans at low interest rates and favorable repayment terms. In October 2007, the NAC announced that it disbursed a total of NGN5.27bn (US.5mn) under the ADF to motor companies between 2004 and September 2007.
Then, BMI believes the sums disbursed are too small and mostly not directed towards the assembly and manufacturing sector and therefore are unlikely to make a significant impact on the automotive industry. The Nigerian government is coming under increasing pressure to protect domestic car manufacturers from imported new vehicles. The new owners of Peugeot Automotive Nigeria (PAN) and National Trucks Manufacturers have complained that the government’s preference for imported vehicles as one of the major factors in the industry’s struggle to survive. As the federal government, state governments and oil companies make up a large bulk of Nigerian automotive purchases; their purchasing policies have a significant impact on the local manufacturing sector. BMI estimates that automotive sales raised 15% y-o-y in 2007 to 84,398 units on the back of strong economic growth, the appreciation of the naira, public sector purchases and the government’s car loan program for civil servants and members of the armed forces. Fuel shortages and the rising cost of living were the main limiting factors in the automotive market. In the medium-term, public sector spending on car fleets and public transportation is likely to be a key determinant of the automotive sector. With NGN94.36bn (US0mn) allocated to transportation in the 2008 budget, the automotive market is likely to be buoyant over the next two years with BMI forecasting a peak in the market in 2010, when total sales will amount to around 95,700 units.
By 2010, total automotive sales will be up 13.4% over 2007 levels, with car sales up 11.9% and commercial vehicle sales (including buses) up 22.5%. However, with economic growth dipping below 4.0% in 2011 and 2012, the government is likely to consolidate spending by cutting its transportation capital budget and the car loan program coming to an end, the automotive market will contract, with total sales falling to around the 2007 level.
Source: Business Monitor International (2008). The Nigeria Autos Report 2008 http://www.businessmonitor.com/autos/nigeria.html
On the other side, there has been greater engagement with a globalized economy is energizing the African power generation industry. According to Frost & Sullivan, rising economic growth in the region will allow the power generation industry to achieve additional sustained turbines capacity. Notwithstanding the risks involved with operating in Africa, the power generation industry will continue to grow, especially in Nigeria, South Africa and some countries of North, Central and East Africa. Current supply levels are incapable of meeting the ever-increasing demand for electricity, analysts said. As an outcome, African countries are seeking to expand the installed capacity of their power plants. The presence of large, proven reserves of fossil fuels and natural gas will complement the growth of conventional power plants, particularly that of steam and gas turbine power plants.
Considering the vast opportunities apparent in the long term, analysts said market participants will need to view growth opportunities in a pan-regional, rather than country-specific, manner. Enhanced external support in terms of funding mechanisms and trade are expected to rise due to the ongoing developmental phase, thereby cementing the basic fundamentals needed for the turbines market to move ahead. However, political instability and lack of security will cause serious concerns to foreign participants entering the African markets. Analysts said such volatility might deter prospective entrants, despite the exciting opportunities that exist in the region. “Although the political situation may be reasonably favorable in some countries, the numerous risks associated with doing business in Africa, especially the lack of security for equipment and people, is seen as a key challenge,” as said by Thaler. “Due to this reason, foreign investors and multinational companies are wary of entering the African market.” Analysts said potential entrants need to establish themselves in stable markets initially before moving to capitalize on the opportunities existing in other countries with relatively higher risk profiles and as the situation improves, they could foray into newer markets, thereby gaining a competitive edge.
Source: Frost & Sullivan Rising Demand for Electricity Spurs African Power Generation Industry July 31, 2006
Rising Demand for Electricity Invigorates African Power Generation Industry: Consultants Frost & Sullivan Have Highlighted Nigeria and South Africa as the Region’s Most Promising Growth Markets. Magazine. African Review of Business and Technology, Volume: 42. Issue: 7. August 2006. Page Number: 34 Alain Charles Publishing Ltd. Gale Group
Moreover, other research has suggested that periods of high demand conditions, such as industry growth and industry maturity, increase the chances of organizational survival (Carroll and Delacroix, 1982; Romanelli, 1989) and the growth prospects of businesses (Eisenhardt and Schoonhoven, 1990). Thus, competence pressures make competition for resources the central force in organizational activities. There suggests that the choice of organization’s environment is crucial to that organization’s competence and sustainability potential and the choice of business value and environment is critical to sustainable growth and ideal competence rather than by focusing on certain business strategy choices that concerns business behavior and culture ways into the automotive and power generation business setting. Thus, Blau (1968) mentioned that such sustainable industry will come up with better industry norms and procedures that maybe relevant for mobilizing and coordinating performance efforts within the team management paradigm of the industry that usually have such specialized partners in the pursuit of effective competence goals and sustainable business (Blau, 1968 p. 298). Truly, such business industry roles and functions can be recharged with enough amount of sustainability to acquire stability in competence as such for instance; the power generation industry in the UK can change such operation ways in order to meet the fast changing internal and external marketing conditions.
Globalisation, the pace of technological change and consumer demand have revolutionised the way we do business. Knowledge and skills play an increasingly important role in the UK’s capacity for innovation and growth. And the motor industry in the UK is meeting those challenges successfully, measured by its total activity rather than by the assembly of the final product. The UK is consolidating its leading position as a centre of excellence in the production of vehicles and components, satisfying the demand of a vibrant domestic market and providing wider access to the rest of the European customer base.
The UK is an excellent place to do business. It is home to an increasingly dynamic industry at the forefront of process improvement, product innovation and best practice, delivered by the best people. We have skills and flexibility in our workforce, we have the backbone of our world-beating motorsports experience, we have the engineering capability, we have a proven track record for innovative development, and our designers are world-renowned. In addition, the UK Government has created a regulatory and business framework which actively encourages home-grown and inward investments. It offers an environment where all companies are treated equally, regardless of ownership, with the result that no other member state in the EU is home to as many manufacturers of vehicles – cars, trucks and buses – as the UK.
This publication sets out the facts about the automotive industry in the UK, underlining its strengths and capabilities. Undoubtedly, global competition provides tough challenges and the UK has had to take its share of rationalization – including well-publicized plant closures. But the overall story is one of remarkable adaptability and resilience based on continuous development and openness to world markets. By working cooperatively, government, industry and academia are ensuring that the UK builds on this automotive success story and continues to provide a home for competitive automotive manufacturing and sustainable mobility. (Cited from, Margaret Hodge Minister of State for Industry and the Regions) The automotive industry is crucial to the UK’s future as a high technology, high wage, knowledge-driven economy and it is crucial to the UK’s economic success and prosperity.
The leading companies have elaborated strategies for competence building. However, interviews showed that in these strategies, particularly in the automotive cluster, there is a subliminal philosophy of „selection of the best“. Fully aware of the demographic challenges, interviewees were nevertheless convinced that this is to be kept up for the future and that there will be no problem to attract the people needed. Supposing, demographic change leads to severe shortages in labor supply, well recommended automotive companies and suppliers may successfully compete for well trained personnel but would then leave the problem to others possibly less capable to cope with it.
Sustainability Issues in Future Automotive Manufacturing
When discussing sustainability issues in automotive manufacturing, several levels of analysis have to be pursued. On the one hand, within a time period up to 2020, a different approach to mobility might have changed personal cars in many ways. Anticipating these changes and their effect on manufacturing is certainly an important part of ensuring lasting competitiveness and sustainability of automotive manufacturing in Europe. On the other hand, it is clear that there are several developments under way in automotive manufacturing today which will affect environment and socio-economic structures in a lasting manner. Accordingly, to discuss these kinds of issues is of major importance when determining needs for R&D support for sustainable manufacturing. The automotive expert group at the scenario workshop gave due consideration to both perspectives by looking at effects of different baseline scenarios on manufacturing on the one hand, and naming trends arising from current developments on the other. In this section, we will also point at both perspectives.
On the level of corporate strategies, the communication of environmental and social consciousness seems to be a “must”. Automotive companies are leading in several sustainability initiatives, like: certification according to ISO 14000, environmental reporting (e.g. within the Global Reporting Initiative), commitment to CERES principles and participation in the World Business Council on Sustainable Development.
At the same time, cost and functional issues are the main arguments when it comes to business decisions about product and process innovations. Although the overall commitment of the top-management to sustainability certainly strengthens the backbone of the many individuals in the companies aiming at increased sustainability, the general diffusion down the management levels and the supply chain is by no means comprehensive. Actually, it seems to have slowed down in recent years. Although sustainability in the automotive sector seems to be inherent to the use of cars, manufacturing is an important factor, too. While it accounts for only a very small share of the environmental impact of cars, nevertheless due to the size of the sector small improvements might sometimes present more relevant gains for the environment than big steps forward in a small industry. But more important, the inertia of the automotive production system might be hampering the transfer to sufficiency concepts in transport.
Chapter 4: Research methodologies
Chapter Overview
This particular research methodology chapter will be dealing and integrating relevant and valid instances to incur the process of putting research and its methodological paradigm into actual flow of evidence proving and be able to recognize as well as support whatever research outcomes the study is deemed and expected to contribute from its ideal design and framework of research in motion. There can be integration of research tools and materials within such instrument validation as well as measurement use to come up with reliable research results pointing towards certain variables involved in the study focusing on major posits of core competence and sustainability in business that will be supporting the automotive as well as power generation industries in both UK and Nigeria respectively. Thus, considering research material inputs can be ideal also for this chapter as it guides the research study to be organized in such research design flow and pattern as vital for achieving coherent understanding of what methods are used, how methods are linked as well as how approaches to research are supported by such primary and secondary data resources from such issues of competence and sustainability and how it affects the operation level and performance of the industries focused.
Research Design
Accordingly, Creswell (1994) stated that the descriptive method of research is to gather information about the present existing condition. The emphasis is on describing rather than on judging or interpreting. The aim of descriptive research is to verify formulated hypotheses that refer to the present situation in order to elucidate it. For this study, the descriptive research method was employed in order to identify impact of competence and sustainability in automotive and power generation business within UK and Nigeria. The researcher opted to use this research method considering the objective to obtain first hand data from the respondents. The descriptive method is advantageous to the researcher because of flexibility providing the researcher greater options in selecting the instrument for data-gathering (Cited from, Saunders, Lewis and Thornhill, 2003). The quantitative data collection methods are centred on the determination of the weighted mean of the given statements. When these methods are used, the researcher is usually detached from the study and the final output is context free.
Hence, measurement, numerical data and statistics are the main substance of quantitative instruments (Cited from, Saunders, Lewis and Thornhill, 2003). With these instruments, an explicit description of data collection and analysis of procedures are necessary. The quantitative approach is more on the detailed description of a phenomenon. It basically gives generalization of the gathered data with tentative synthesized interpretations. Quantitative approach is useful as it helps the researcher to prevent bias in gathering and presenting research data. Quantitative data collection procedures create epistemological postulations that reality is objective which can only be realized by means of transcending individual perspective. This phenomenon in turn should be discussed or explained by means of data analysis gathered through objective forms of measurement. The quantitative data gathering methods are useful especially when a study needs to measure the perception of the respondents regarding the topic. The purpose of the quantitative approach is to avoid subjectivity by means of collecting and exploring information which describes the experience being studied (Cited from, Gall, Gall and Borg, 2003). The measures used in this study are being developed through an extensive literature review followed by iterative review.
Furthermore, the measures had been used in prior studies and were found to demonstrate adequate reliability and validity. The questionnaires containing the measures were also pilot-tested before the main survey. The variables covered in this study were measured as perceptual items on five-point Likert scales. In order to secure their assistance in completing the survey questionnaire, perceptual rather than objective measures were used. According to Dess and Robinson (Cited from, 1984), subjective measures can be appropriate surrogates for organizational performance. A list of questionnaire items have been developed from Rogers’ (Cited from, 1995) five attributes of innovation. The questionnaire items that were derived from the definition of each attribute as applied to the business use of Internet-based EC as indicated. The indices of innovative attributes were generally arrived at by combining the responses of the items conceptually associated with the variable being measured. This usually involved simple summation except with those items whose contributions were logically opposite to the set of the scale, respondents were asked to indicate their perception of the overall satisfaction with sustainable process within competency substance from the perspective of the business industries investigated.
The methodology employed to research this research study was of a qualitative nature. A more quantitative approach to this research may develop in the next stage, however the purpose of this research project was to ascertain possible impact of competence and sustainability as used for any possible framework development. This research project will be seen by such committee who will be responsible for giving initial and subsequent direction to the research. The methodology thus used was developed in order to satisfy the key stages of the project. Before any framework could be developed for the industries in question, it was first appropriate to perform a desk-top research exercise in order to see what models of competence already exist, both within the sector and across sectors. The initial views of industry, as canvassed at the first conference, were used to develop the main features of a possible framework for recognizing competence for the five industries in question.
Research Questions
1. What is the positive/negative impact of competence and sustainability in automotive industry in UK?
2. What is the positive/negative impact of competence and sustainability in automotive industry in Nigeria?
3. What is the positive/negative impact of competence and sustainability in power generation industry in UK?
4. What is the positive/negative impact of competence and sustainability in power generation industry in Nigeria?
Thus, considering research hypothesis inputs can be ideal also for this chapter as it guides the research study to be organized in such research design flow and pattern as vital for achieving coherent understanding of what methods are used, how methods are linked as well as how approaches to research are supported by such primary and secondary data resources from competence as well as sustainability approaches to business industry adoption within the UK and Nigeria context.
Research Hypothesis
H1: Competence of automotive industry has a positive impact on the value of business sustainability in UK
H2: Sustainability of automotive industry has a positive impact on the value of business competence in UK
H3: Competence of power generation industry has a positive impact on the value of business competence in Nigeria
H4: Sustainability of power generation industry has a positive impact on the value of business competence in Nigeria
Research Population
The population of the research caters on automotive and power generation industries operating in UK and Nigeria irrespective of whether they are using electronic commerce applications or not.
Research Sampling
Questionnaires are then distributed to the industries as the researcher made sure that the quality of the collected data will be at its best. Only those who have IT educational background or working in IT department were solicited, provided that they are willing to participate in this research. Volunteered participants were given questionnaires with cover letter explaining the purpose of this study and assuring confidentiality of their responses. Data was then coded, entered into a computer file, and then analyzed using the Statistical Package for Social Sciences (SPSS) software. In this chapter, there will be discussion of choices and substantial discussions concerning the research methods covered and such type of analysis strategy applied which are duly selected for the realization of this chapter and the study in general. Ideally, qualitative and quantitative research approach are being used in the study as the approach depends on the investigated information as such comprehensive discussions on such e-commerce adoption determinants is desirable and appropriate within the study implying such qualitative research emphasizing unstructured as well as exploratory tool that can be based on such samples from UK and Nigeria industries that in manner does provide useful insights and understanding of such research issues as being supported by direct observation and with attempt to avoid commitment to such complicated nature to such research framework used.
The qualitative approach was selected as there can be enough awareness and consideration of competence and sustainability in UK and Nigeria’s industries as a part of the research study. Aside, quantitative approach was also applied in the study as it serves as an imperative material to assess and recognize precisely numeric values and figures as relevant and significant in determining such ideal impact as well as business performance adoption from views and perspectives of people involved within the automotive and power generation industries. Specifically, there can be a total of 10 industries as randomly selected to make up the sample. Selected participants answered a survey questionnaire structure in Likert format. Data gathered from this research instrument were then computed for interpretation. Along with primary data, the researcher also made use of secondary resources in the form of published articles and literatures to support the survey outcome. The questionnaire was structured in such a way that respondents will be able to answer it easily. Thus, the set of questionnaire was structured using the Likert format with a five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. In this type of questionnaire, the respondents were given five response choices. These options served as the quantification of the participants’ agreement or disagreement on each question item.
Reliability and Validity of the Questionnaire
Several techniques were used to assess the reliability Cronbach’s coefficient and to assess face, construct and convergent validity. In order to ascertain face validity, an initial questionnaire are to be passed through the routine editing and will be given to the panel of academic committee and that the participants of the study will be asked to respond to the questionnaire and based upon their comments; questionnaire will be reworded to enhance the clarity. In general, validity refers to the degree to which instrument truly measure the constructs that are intended to measure. There are several types of validity measures that include the face validity and constructs validity. Campbell and Fiske proposed two types of validity: convergent and discriminating validity. Convergent validity is measured by average variance extracted for each construct during the reliability analysis that should be 0.5 or 50 percent better. Then, to further analyze for convergent and discriminating validity of certain constructs, principal component method with such rotation are to be utilized in order to assess the variables in the study as such research outcomes can possibly show that variables incorporated are to be verified in the process respectively.
Questionnaire Guideline Questions
The discussion groups will be asked to discuss the issues in question to guide the conversation as there can be composed of several questions:
The Questionnaire
The researcher is conducting a study on analyzing the impact of competence and sustainability in UK and Nigeria automotive industry as well as the power generation industry within Honda and Siemens. The objective of this questionnaire set is to enable the researcher make the necessary conclusions and recommendations and it would be very much appreciated if you answer all the items in the questionnaire. Information given will be treated in strictest confidence.
Thank you.
5 - Strongly Agree
4 - Agree
3 – Neutral
2 - Disagree
1 - Strongly Disagree
Part 1: Organizational
Organizational Profile
Organizational Location
United Kingdom
Nigeria
There is company website?
YES
NO
Owner’s Profile
Gender
Female
Male
Age
18-30
30-40
40-50
50-60
Education
High school
College
Masters
Tenure (Year)
1-5
6-10
11-15
16-20
Basic Skills
1.
Can use word processing program to organize documents
2.
Can use presentation graphics program to present data
3.
Know how to use web browser programs
4.
Can use the internet in gathering information
5.
Qualified to use and operate computer generated tools
Attitude towards Sustainability
5 4 3 2 1
1.
Believe that business will have to use sustainable materials
2.
Believe that through performance and operation there is sustained business
3.
Workforce is easy and fast due to sustainable process within such framework
4.
Believe that sustainable growth is effective way to succeed in business
5.
Sustainable environment is imperative to the success of the industries
6.
Sustainability have ample impact on sales as well as market share as possible
7.
Sustainability is ideal when there is enough corporate competence power
8.
Sustainability impact such development of innovative business competence
9.
Sustainability does enhance good competence values
10.
Sustainability does contribute to the overall aspect of competence approach
Attitude towards Competence
1.
In competence, it can be easy for the customers to switch to competitor industry
2.
Rivalry within the industry team are more intense
3.
Substitutes of services does affect competence schemes
4.
Human resource and training development will have to level up sustainable changes imposed by the industry
5.
Competition is of high risks when competence is weak in application
6.
Moderating competence adheres understanding of the business culture
7.
Competence will have an impact on such industry culture standards
8.
Competence will level up the sustained culture of such sustainable systems
9.
Competence does involve performance and operation success and be aware of such industry change
10.
Competence does affect the global market of the industry and provide options for stability
Ethical Considerations
In keeping with the appropriate procedures and in the interest of maintaining the integrity of the research, the researcher had made every effort to ensure that the ethical guidelines for conducting a study were strictly followed. Thus, prior to commencing with the research, permission was obtained from each customer, who participated in the study. All data collected from the respondents were kept in a secure location. The names of the respondents were secured. The objective, purpose and the significance of the study were all relayed to the participants before initiating the research process. As stated, the research underwent stages. In the research design, the researcher collected secondary data and formulated and developed the self-administered questionnaire. In this stage, these instruments were subjected to approval and validation. During the information collection, the researcher collated and summarized the data obtained from the self-administered questionnaire and survey. The researcher then analyzed this information and from these, the researcher came up with findings and recommendations that shall be presented in the next chapters.
Chapter 5: Data Analysis and findings
Chapter 6: Discussion and Conclusions
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