Strategic Management Dynamics

Chapter 5 - Resource attributes

This chapter explains how the varying quality of resources – larger vs. smaller customers, more vs less appealing products etc – affects how an organization performs over time. Any such quality operates as an ‘attribute’ for the resource that carries it, and rises or falls along with changes to the resource itself, in just the same way as adding hot or cold water changes the temperature of a tank or bathtub. The chapter shows how to work out the scale and speed with which changes occur to an attribute, and how these changes work through to drive overall changes to performance over time. It also explains how a resource can exhibit a quality-distribution, for example when customers vary in size or staff vary in experience. Examples covered include customer-quality, staff skill levels, equipment reliability, and the fund-raising for a voluntary organization. The chapter explains important attributes for a low-fare airline, and shows how the principles can be used for turning round performance of a troubled business or to undermine a competitor’s strategy.

This Chapter includes link to concepts of human capital, skills and competency audits, marketing channels, industry consolidation, corporate turn-round and rejuvenation.

KEY ISSUES

• The attributes possessed by resources that describe their quality and determine their contribution to performance
• Understanding how those attributes improve and deteriorate as resources are added or lost
• Implications for developing human resources, product range, and other functional issues
• Using the quality-distribution of resources to decide where to compete and where to focus efforts at improving performance
• Situations when resources bring with them the potential to access others
• The importance of competitive structure in an industry, and using attributes to undermine competitors.