Category: Competitiveness

Human Resource Strategy of Haier Outside China and its Effectively

Haier’s human resource strategy in the world market has been motivated by its need to beat stiff competition abroad. This company is the leading firm in the white goods in China. It has had consistent growth in the home country and currently it is ranked the sixth largest electronic firm in the world. The human resource strategy employed by this firm is based on various factors affecting particular foreign markets.

The firm has employed Host Country National strategy of human resource. This strategy has been appropriate for this firm for a number of reasons. According to a report by Palepu, Khanna and Vargas (2005), Haier Group of Companies has been keen to employ host country nationals for a number of reasons.

The first and most important reason is that the locals understand the local market better. This firm would pick only those employees in the foreign country who have had an experience in promoting brands. This is important because the firm has insisted on using its brand even in international markets.

Such experienced employees are aware of the best strategies that could be employed within the local markets to achieve the best results. As such, this firm would only need to provide the necessary resources for this team to penetrate the market. Haier would select specific entities that are well known in marketing specific brands to market its brand. These entities would be allowed to recruit locals to help in marketing Haier’s products.

Another reason that has made Haier to adopt this strategy is that the strategy would make the products be easily acceptable in the international markets. When consumers are reached through their country nationals, they would have the feeling that the product is their own other than being viewed as a foreign product. This strategy is also favored by many foreign governments because it creates jobs.

This strategy is very effective. One of the reasons that make this effective is that it reduces costs of operation. When locals are used, the firm would reduce its budget in research and development in the foreign country. The locals have a deep understanding of the local market. As such, they may not need to be trained to understand market forces. This strategy is also very helpful for this firm because it allows it to understand local competitors much easily. Because most of the employees would be taken from this industry, they are better positioned to champion winning strategies for the firm.

The Trade-Offs and Challenges Haier Faces in Establishing a Competitive Brand in the Global Market In Addition To In the Domestic Market

Haier experienced a massive growth in size during the nineteenth and twentieth century, especially due to the non-open market that China had enforced. The country had a very large population which was a large ground for growth of this firm, given that foreign firms were not allowed in the country. It only had the local firms to compete with, and through its strategy of outsourcing for some services, its products gained fame for quality.

As such, the firm became the best firm in white goods industry. However, by 2004, China had given in to the international pressure and opened up its markets to the international firms. New form of competition was introduced into the local market. With the open market, Haier also considered opening up subsidiary firms abroad to heighten its competitiveness. Haier had to restructure itself in order to remain as competitive as it had been even in the face of new competition which was obviously fiercer than the one that existed before.

In order to achieve this, the firm had to trade off some of its benefits and this came with a lot of challenges. The first trade-off was given by the government of China. By allowing foreign firms to operate in the local market, Haier had to forego a large chunk of its market share in China for foreign firms like Lucky Goldstar (LG), General Electric and many other foreign firms.

In its place, the firm acquired international markets some of which were previously dominated by the new entrants into the Chinese market. The firm also had to get into joint venture programs with other firms in order to remain competitive. According to Palepu, Khanna and Vargas (2005), Haier entered a joint venture with a number of German firms in its quest to improve quality of its products. This strategy involved some kind of trade-off between this firm and the outsourced German firms.

Haier had to share its profits with the other firms, a fact that lowered its net profits hence net income were considerably low. The firm also entered an agreement with these firms that it would sell the other firm’s products to the Chinese market, a deal which would strain Haier’s resources. In return however, Haier managed to get quality for its products. Haier became a well known firm for its quality products.

The Similarities and Differences in the Electronics Market (HTC Corporation) and the White Goods Market (Haier)

The electronics market and the white goods market share similarities. As witnessed in the case of HTC Corporation, the electronics market is very dynamic. New products come into the market so frequently. This is the same case with white goods markets. The industry is so innovative and every firm is determined to introduce a new product into the market. Emerging technologies is the driving force in both cases.

As such, both markets require massive investment into research and extensions in order to manage market requirements. In both markets, competition is rife. While HTC faces challenge from such developed firms like Samsung, Nokia and Apple, Haier is facing competition from such developed firms as General Electric, LG and Amana.

In both cases, quality is the only way that a firm can manage to stay afloat the market competition. Finally, in both cases, brand is a very important tool for competition. A firm that does not have a well known brand cannot manage competition. It takes long and costs a lot to build a strong brand, but it is a firm would not have otherwise but to do this.

The market is obsessed with brands. They attach quality of the item they purchase to its parent brand. If the parent brand is known for quality, then the product would receive a massive sale. In case the product’s brand is hardly known, it would be very difficult to sell the product both at the local and international markets.

Despite these striking similarities, there are differences between the electronics market and the white goods markets. The first difference is the target group. According to Yoffie (2010) the main market for electronics are the youths. They are techno servy and are keen on fashion. A product meant for this market should be sensitive on modern trends. For instance, this group is obsessed with the social media.

As such, phone manufactures must ensure that their products are internet enabled and that they can satisfy the desires of the youth. On the other hand, white goods are mainly targeted at the middle-aged. This market is characterized by young individuals who are just starting their families. Unlike the youths who look for glamour, this group looks for service.

Inasmuch as they appreciate physical attractiveness of the items they buy, they put more emphasis on the ability of the product to serve the purpose it was intended to. This is contrasting the youths who would be attracted to physical features more than the performance level.

Similarities and Differences in the Acquisition Strategies of Haier and Newell

Both Haier and Newell share a lot in common as far as acquisitions are concerned. As Montgomery (2005) states, one of the best ways through which a firm can get a competitive advantage is through mergers and takeovers. Competition in the market is so strong and therefore the bigger the firm the easier it is to gain competitive advantage.

Although this strategy may seem best suited for small and mid level companies, it is one of the most important tools that large corporations use to manage competition. Yoffie (2010) argues that this strategy is the best way of killing competition in the market. Newell strategy of acquisition bears resembles to the strategy used by Haier. Both firms are keen to acquire firms that are well known in the market.

They do not acquire just any firm, but only those with substantial market share and a strong brand name. Newell acquired Rubbermaid, a firm that was almost as strong as itself, with brand that was well known and a capital base that was over 60 percent that of Newell. Similarly, Haier Group acquired Qingdao Air Conditioner Factory and Qingdao General Freezer Factory which had very strong brand in the local market.

However, both firms differed in a way that they would select the right firm to acquire. Whereas Newell was keen on acquiring firms that were doing firm in all fronts, Haier was more concerned with acquiring firms that had problems with the management (Stewart 1990). Haier would take a firm with strong market share and brand equity, but because of lack of management, its existence was under threat.

Another difference in acquisition of firms between the two firms was the financial strength of the firm to be acquired. Whereas Newell was only interested in firms that were economically viable, Haier would take over those firms that were struggling for existence. Haier would take over a firm’s debt and settle them when it acquired such firms, an act that Newell avoided completely.

Haier’s A-Third Strategy of Production and Its Relevance

Haier has grown to become one of the strongest firms in the white goods. In its home market, it is the dominant firm in this industry, known for quality products and variety offerings in different lines. The domestic market is fast getting saturated. Inasmuch as it would be important to retain the local market share, it would equally be necessary that it explores the foreign markets to ensure that it expands its market share.

To do this, the firm has formulated ‘a third strategy’. In this strategy, a third of the firm’s production would be done locally and will find its market locally. A third of the production will be done locally and will be exported while the last third will be produced and sold in foreign countries. This strategy vision is achievable, given the current status of this firm. This firm has grown in size over the past three decades. In order to determine the firm’s suitability for this strategy, it would be prudent to conduct a SWOT analysis.

This firm has gained strength in the local and international markets in various fronts. Locally, this firm enjoys huge acceptance from the locals. Its brand is known among the locals as a mark of quality. This has enabled it to charge its products at premium prices. Through this premium pricing, this firm has been able to amass a large amount of wealth that can enable it conduct its productions internationally.

The firm also has a well established logistics unit through which it is able to export its products to the international market. The logistics unit would make it possible for the firm to take the locally produced goods to the international markets.

It has also managed to penetrate the international market and currently it commands a considerable huge market share in countries like United States of America, making it one of the leading general electronic firms. It would therefore be easier to establish production units in overseas countries to manufacture a third of its products.

Despite the above strengths, this firm faces some serious weaknesses that may make it fail to achieve the desired objectives. One such challenge is its reluctance to cover the third world markets.

Using its strategy of venturing into difficult markets before the easy ones makes it spend a lot of money trying to beat competition. It would cost much less in time and material resources to cover the young markets in South East Asia that it would capturing the German and the US markets. This has given way for other competitors to capture these markets before its entry.

There is hope in both local and international markets. As Palepu, Khanna and Vargas (2005) states, the market for white goods has increased tenfold, in the last five decades. The world is embracing technology and living standards is also improving.

White goods are fast becoming a basic necessity in many homes as time become increasingly limited. Families need machines to wash their clothes, refrigerators to store their foods and such other related items. Haier stands a better chance to reap maximally from this increased market demand. Moreover, many countries around the world are lifting trade bans, hence opening their markets to international firms like Haier.

However, the above opportunities also come with some threats. As this firms gets international markets to sell two-thirds of its products, its focus on the local market may be reduced, opening up competitive advantages to other competing firms. This may be dangerous because the home market is as important as the international markets.

Similarities and Differences in the Strategic Challenges Faced By HTC and Haier in Their Operation

As HTC struggles to develop a strong brand equity that would help in marketing its products, Haier is struggling to extend its brand to new markets. Both firms are faced with many challenges in their operations and quest to achieve their set goals. These challenges are in a way similar.

One such common challenge the two firms face is that the market is saturated with better brands. As Haier struggles to expand its market, it has to come to terms with the fact that there are stronger brands in the new markets it is venturing into. Brands like LG and Sony are very strong.

As such, it would be a difficult task to convince these new markets that Haier as a brand offers more quality than the existing trusted firms. HTC has the same challenge. The electronics market is obsessed with brand name. Nokia and Samsung have developed a niche in the international market as firms that offers exactly what the customer needs but with added value. HTC is hardly known beyond its parent country. It would take a lot of effort to make this brand become a formidable force.

Another problem that both firm faces are the expenses they have to incur in these markets. In order to make the brand HTC popular, it would require a lot of promotional efforts, a fact that would reduce revenues for the firm. Similarly, to expand its market, Haier would need to do a lot of research and extension in the new markets, besides conducting awareness creation in the market. These costs would hurt its productivity.

Another big challenge that the two firms face is the stereotype that firms from China and by extension the larger Asia (with exception of Japan) produce substandard goods. Haier will have to fight this notion in the international markets, especially the American markets which makes one of the most attractive markets. Because of its decision to market its products in the first world countries, it would require this firm to convince the market that its products are as good in quality as others from other developed countries, or even better.

The same is the case with HTC. It must convince the market that despite its Asian origin, the products are produced with as good technologies as those used by other firms like Nokia and Samsung. According to Palepu, Khanna and Vargas (2005), this can be the toughest challenge. This is because once the market has developed a perception about a certain brand (especially if the perception is negative), it would be very difficult to convince them otherwise because they would not try it in the first place.

Although the two firms have similar challenges in their operations, there are some marked differences. HTC is specialized in electronics industry while Haier deals in white goods. The target group for the two firms is therefore different. While the products for HTC are targeted towards the youth, Haier products are targeted at the middle aged working class individuals.

To HTC, it is easier to convince the youths that their products are superior, especially if the products’ physical attractiveness is enhanced. Unfortunately, they can easily be swayed away from this brand. Conversely, Haier may find it easier to maintain its customers, but the big problem is convincing others into the brand.

References

Montgomery, C. (2005). Newell Company: Corporate Strategy. Harvard Business School, 9 (799-139), 1-16.

Palepu, K., Khanna, T. & Vargas, I. (2006). Heir: Taking a Chinese Company Global. Harvard Business School, 9 (906- 401), 1-27.

Stewart, D. (1990). Focus group: theory and practice. Newbury Park: Sage.

Yoffie, D. (2010). HTC Corp. in 2009. Harvard Business School, 9 (709- 466), 1- 15.

Executive Summary

Human resource management plays a crucial role in an organisation’s quest to achieve competitiveness with regard to human capital. This report evaluates people management as one of the core elements in human resource management. The report focuses on British Petroleum [BP], which operates in the oil and gas industry.

In the course of its operation, BP is facing challenges arising from changes in the business environment. Some of the changes that the firm is currently experiencing relate to labour force trends, workplace communication, technological forces, and changes in the employment law.

In a bid to survive in such an environment, it is imperative for the BP’s management team to be proactive in adjusting its HRM strategies in line with the prevailing internal and external environmental changes. The report illustrates some of the aspects that the firm should consider in its people management practices in order to achieve the desired competitiveness in the labour market.

Introduction

British Petroleum is one of the leading public limited companies in the UK’s oil and gas industry. The firm was established in 1909 and it has penetrated the global market successfully. By the end of 2013, BP had established operations in 80 countries. BP ranks fifth amongst the largest companies in the world with regard to total sales revenue and sixth with regard to market capitalisation.

An evaluation of previous studies and reports show that firms in the oil and gas industry are facing diverse macro and micro-environmental forces. Some of the macro-environmental forces include legal and technological forces.

For example, oil and gas producing companies are experiencing tight environmental regulations due to the high rate of global warming, which is leading to climate change. Additionally, these companies are experiencing a threat arising from the high rate of technological changes.

These macro-environmental forces are beyond the organisational managers’ capacity to influence or control. On the other hand, micro environmental forces originate from an organisation’s internal operations, and thus they are within the organisational managers’ capacity to control. An example of an internal force includes employee resistance to change and conflicts.

Additionally, the emergence of information age has led to growth in the level of knowledge within the labour market, as evidenced by diverse institutional forces on aspects related to employment standards, employee safety, and health and labour relations amongst others.

The macro and micro-environmental forces have significant impact on internal stakeholders such as employees. Aguilera and Dencker (2004) assert that organisations are comprised of people, who are allocated diverse duties and responsibilities. Therefore, people are considered as one of the environment inputs in an organisation’s success.

Individuals in the different levels of management have diverse powers and responsibilities according to their job description. However, the success with which an organisation achieves its desired goals is subject to the extent to which individuals in the different levels of management interact with each other, hence leading to the creation of synergy (Aguilera & Dencker 2004).

In a bid to achieve the desired synergy, it is imperative for organisational managers to integrate effective power relationship and people management strategies and policies. This report evaluates the major changes taking place in BP’s internal and external environments with specific reference to labour force trends, employment relationship, technological changes, workplace communication, and developments in employment law.

Discussion and analysis

Labour force trends

Developing effective people management skills is a fundamental aspect in managers’ quest to execute their duties effectively. People management skills increases the productivity of an organisation’s workforce, hence the firm’s long-term performance.

One of the issues currently facing BP is the high rate at which employees are seeking employment opportunities that align with their career path of development. Moreover, BP is facing a challenge emanating from the change in the employees’ perception and demand with regard to job satisfaction.

Currently, employees are increasingly focusing on the overall job environment and not solely on monetary gains in making the decision to stay in the organisation. One of the issues that employees are focusing on entails the concept of work-life balance.

Employees are demanding a high level of flexibility in their job. McNall, Masuda, and Nicklin (2010, p.63) assert that many ‘organisations have begun to offer flexible work arrangements to help employees balance work and family demands’. This trend has arisen from the high rate of globalisation and information explosion because of development in information communication technology. These trends have greatly opened up the labour market.

Currently, the labour market is characterised by a high degree of mobility. Subsequently, employees are seeking for good employment opportunities even in organisations that are beyond their national boundaries. McNall, Masuda, and Nicklin (2010) argue that employees are increasingly basing their decision to stay in a particular organisation on the likelihood of progressing through their desired career path.

Competing firms are increasingly exploiting this market trend by adopting the concept of poaching in their human resource management practices. This scenario presents a challenge in BP’s quest to survive in an industry characterised by intense competition.

Previous studies have identified human capital as one of the greatest sources of competitive advantage in organisations. In its quest to achieve competitiveness with regard to human capital, BP’s management team has an obligation to adopt effective people management strategies and skills in their strategic human resource management practices.

Some of the practices that the firm can integrate include effective human resource planning, employee development, effective job analysis, implementing effective reward management strategies, and nurturing optimal employee relations.

McNall, Masuda and Nicklin (2010, p.1359) further emphasise these sentiments by asserting that managerial ‘practices need to be aligned with environmental demands so that desired work behaviours arise’. Failure to adjust the organisation’s human resource strategies with the prevailing employee needs will affect the BP’s competitiveness in the labour market.

Workplace communication

Effective communication is a fundamental element in an organisation’s efforts to develop a collaborative working environment. Baines (2009) emphasises that workplace communication should be considered as an investment rather than a cost item.

Ryan, Windsor, Ibragimova, and Prybutok (2010) assert that organisational performance is subject to the degree of collaboration amongst the various internal stakeholders such as employees.

Moreover, Turner, Qvarfordt, Biehl, Golovchinsky, and Back (2010, p.1) argue that workplace communication ‘enables collaborators to foster ideas, build a common round, and develop complex interpersonal relationships’. Subsequently, the level of information and knowledge sharing increases significantly. The diagram below illustrates the relationship between workplace communication and knowledge sharing.

Source: (McNall, Masuda & Nicklin 2010)

Incorporating effective workplace communication is not an option. Therefore, it is imperative for organisational leaders to foster effective information flow in order to improve their firms’ performance. One of the ways through which this goal can be achieved is by adopting open communication channels.

Abram, Cross, Lesser, and Levin (2003) contend that workplace communication is essential in nurturing a high level of employee involvement.

However, it is imperative for organisational managers to monitor the open communication channels in order to improve the level of trust, which is critical in organisational growth. The model below illustrates how an organisation can nurture a high degree of employee involvement through workplace communication.

Source: (Thomas, Zolin & Hartman 2009)

Workplace communication in BP is undergoing significant changes arising from a number of factors such as the emergence of diverse communication platforms and global issues. These changes have had significant impact on BP’s workplace communication strategy.

In order to create the desired level of synergy, organisations have an obligation to nurture a high level of trust amongst employees in different departments in order to sustain workplace communication. Moreover, the significance of effective knowledge management has improved the need to effective workplace communication.

In addition to the above changes, workplace communication is affected by the high rate of diversity in the workplace. Organisations are increasingly becoming culturally diverse due to changes in the labour market. For example, in its quest to nurture a strong workforce, BP sources for its human capital from the global labour market.

Furthermore, the firm has adopted the policy of non-discrimination of employee based on their demographic characteristics. Subsequently, the firm has experienced a significant increment in the level of diversity in its workforce, which has led to remarkable communication challenges in its internal communication climate.

Some of the communication challenges that the firm is experiencing relate to language barriers coupled with social and cultural differences. These challenges have significant effects on the firm’s efforts to nurture effective interpersonal connection amongst the top management and lower level employees.

Employment relationship

The relationship between employees and employers is fundamental in organisations’ operation. Lack of such relationship may affect the employees’ morale and productivity adversely. This assertion arises from the view that the success of the organisation is dependent on the contribution between employees and employers.

Cornelissen (2011) asserts that the employment relationship is characterised by the concept of psychological contract between the two parties. Upon joining a particular organisation, employees assume that they will be treated honestly and fairly.

Additionally, employees expect employers to observe justice and equity, and thus communicate effectively regarding possible changes and developments. Moreover, employees are of the perception that their loyalty will be reciprocated through various avenues such as assurance of job security and recognition.

Organisations in the oil and gas industry are increasingly focusing on improving their performance in order to survive in the turbulent business environment. Subsequently, the firms are increasingly adopting project-based approach in their quest to achieve the desired level of growth.

For example, the intensity of competition in the oil and gas industry is pressurising BP to increase its investment in offshore oil and gas exploration. However, the firm’s success in such projects will be influenced by the relationship developed between the firm and its employees. This assertion underscores the importance of integrating effective employee relations strategies.

Employee engagement

The firm’s success in a competitive business environment will be subject to the level of employee engagement developed. It is imperative for BP to develop a high level of employee involvement in the decision making process. This move will play a fundamental role in minimising the likelihood of the firm experiencing a high degree of resistance from employees in its quest to implement diverse organisational changes.

One of the ways through which the firm can achieve this goal is by eliminating bureaucracy with regard to internal communication. For example, the firm should ensure that employees and supervisors interact freely. Nurturing effective employee involvement will aid in developing positive perception regarding the firm’s policies and decisions (Leat 2011).

Employee motivation

The effectiveness and efficiency with which employees execute their duties is affected by their morale. Subsequently, it is imperative for organisational managers to nurture the level of motivation. One of the ways through which this goal can be achieved is by assigning employees challenging tasks to give them an opportunity to grow. Moreover, delegating tasks will develop a sense of relevance in the firms’ operations.

BP should consider adopting the concept of delegation in its HR management practices in order to provide employees with an opportunity to progress through their career, which can be achieved by assigning some of the managerial activities to low-level employees.

Subsequently, employees will feel trusted, which leads to an increment in the level of their commitment towards the organisation. Moreover, employee motivation can be achieved by incorporating an effective reward system that integrates both monetary and non-monetary gains and benefits as illustrated by the diagram below.

Source: (Leat 2011)

Conflict management

The existence of conflicts between an organisation’s employees and top-level managers cannot be eliminated. Such conflicts may affect employee relations adversely. Currently, employees in different economic sectors are demanding higher levels of remuneration in order to enable them meet their financial obligations.

On the other hand, organisations are facing financial constraints arising from the changes in the economic environment. Failure to balance the employees’ needs and organisational constraints may dent a firm’s image. Subsequently, HR managers have an obligation to manage such conflicts through a win-win strategy (Leat 2011).

Technological changes

Innovations in information communication technology have led to significant changes in organisation’s human resource management practices. For example, development in information technology has led to the emergence of diverse web-based communication platforms such as social networks [Facebook, Twitter, blogs, and wikis].

Turner et al. (2010) assert that different communication platforms and mediums support specific information context and expressiveness. Additionally, the various internal communication tool adopted is characterised by unique strengths and weaknesses.

In an effort to develop a strong workforce, it is imperative for a firm to adopt an effective employee recruitment and selection strategy. Currently, organisations are increasingly using social networks in recruiting employees by posting job description and job analysis on social media platforms.

This trend has arisen from the efficiency of communicating through social networks in reaching a large number of potential job candidates. Moreover, advertising job vacancies on social media is relatively cost effective compared to using conventional mediums such as newspapers.

Additionally, social networks have remarkably improved the effectiveness with which organisations undertake workplace communication. Thus, in its quest to transform itself into a competitive firm in the oil and gas industry, it is essential for BP’s management team to select a mix of the most effective communication tools.

Development in employment law

The employment environment is undergoing significant developments with regard to the legal aspect. Currently, organisations are facing an increment in the level of diversity within the labour market. In an effort to ensure equality in the workplace, different legislations are adopting strict regulations in an effort to eliminate discriminative practices amongst employers.

For example, governments are formulating legislations such as the Disabilities Act, the Race Relations Act, and the Faire Employment Act in an effort to protect job candidates with diverse physical challenges (Inagami 2008).

Employers are required to provide equal employment opportunities to all job candidates irrespective of their demographic characteristics such as race, nationality, gender, sexual orientation, and religious beliefs amongst other variables.

Therefore, firms are required to eliminate any form of discrimination in their recruitment practices. Failure to adhere to the set employment laws may lead to huge legal costs in addition to damaging an organisation’s image.

Conclusion and recommendations

Developing effective people management skills is fundamental in organisations’ quest to develop sufficient competitive advantage. This analysis shows that BP is facing diverse challenges emanating from the business environment. Some of the challenges that the organisation is currently facing relate to technological changes, new labour force trends, workplace communication, employment laws, and significance of employee relations.

Despite these changes, firms have an obligation to survive in the long term. This analysis shows that the effectiveness with which a firm survives in the long term is dependent on the success with which it formulates and implements effective people management strategies and practices.

The above analysis shows that integrating effective people management practices in the BP’s strategic human resource management practices will increase the likelihood of developing sufficient competitive advantage with regard to human capital. Subsequently, it is imperative for the firm’s management team to focus on the following aspects.

1. The firm should nurture a high level of employee involvement and engagement in order to improve their job satisfaction.
2. BP should invest in employee training programs in order to assist employees achieve their career development objectives.
3. The firm should adopt an effective internal communication strategy [top-bottom and bottom-up] in order to improve the level of engagement amongst employees.
4. The firm’s management team should constantly review the employment laws in order to eliminate the risk of non-adherence.

Reference List

Abram, L, Cross, R, Lesser, E & Levin, D 2003, ‘Nurturing interpersonal trust in knowledge sharing networks’, Academy of Management Executive, vol. 17 no.4, pp. 64-77.

Aguilera, R & Dencker, J 2004, ‘The role of human resource management in cross-border mergers and acquisitions’, International Journal of Human Resource Management, vol. 15 no. 8, pp. 1355-1370.

Baines, G 2009, Meaning Inc: the rise of the 21^st century company, Pearson Education, New York.

Cornelissen, J 2011, Corporate communication; a guide to theory and practice, Sage, New York.

Inagami, T 2008, New developments in employment discrimination law, Japan Institute for Labour Policy and Training, Tokyo.

Leat, M 2011, Employee relations, Edinburg Business School, Edinburg.

McNall, L, Masuda, A & Nicklin, J 2010, ‘Flexible work arrangements, job satisfaction and turnover intentions; the mediating role of work-to-family enrichment’, The Journal of Psychology, vol. 144 no. 1, pp. 61-81.

Ryan, S, Windsor, J, Ibragimova, B & Prybutok, V 2010, ‘Organisational practices that foster knowledge sharing across distinct national cultures’, International Journal of Emerging Transdiscipline, vol. 13 no.2, pp. 131-158.

Thomas, F, Zolin, R & Hartman, J 2009, ‘The central role of communication in developing trust and its effect on employee involvement’, Journal of Business Communications, vol. 46 no. 3, pp. 287-310.

Turner, T, Qvarfordt, P, Biehl, J, Golovchinsky, G & Back, M 2010, Exploring the workplace communication ecology, FX Palo Alto Laboratory Incorporation, San Francisco.

Burgmaster Corp. was a successful LA-based machine-tool maker. It made a significant contribution to the local economy in the 1960s. However, new entrants into the machine-tool making industry reduced Burgmaster’s market share in the 1980s. Burgmaster’s problems were exacerbated, when LBO’s became a popular tool for speculators. At the end, Burgmaster could no longer compete. Burgmaster was forced to shut down.

1. Burgmaster was severely affected by external factors making it extremely difficult to create a profitable business in the 1980s. There were two external factors that contributed to the demise of Burgmaster. First of all, the unexpected surge of Japanese products in the American market caught many businesspeople unprepared. Japanese firms were able to provide American consumers with high-quality and low-cost products. These products were strategically positioned to eat into the market share that was supposed to be under the control of U.S. based companies like Burgmaster. In addition, U.S. policies made it extremely attractive for speculators to initiate LBOs. In the beginning it made money for many speculators. However, the LBOs created unnecessary pressure for U.S. based companies like Burgmaster to generate cash flow, and LBO’s compelled business leaders to cut corners in order to appear profitable. With regards to internal factors, Burgmaster’s corporate leaders became complacent after they experienced tremendous success in the 1960s.
2. Inadequate strategic planning was a major factor that contributed to the demise of Burgmaster. The appropriate application of strategic planning skills would have enabled corporate leaders to understand the threat posed by Japanese products that invaded the American market during that time period.
3. Burgmaster had a fighting chance if corporate leaders were able to develop an effective supply chain strategy. Burgmaster should have worked closely with suppliers and customers in order to develop a cost-efficient supply chain. As a result they could have lowered their operating costs. Burgmaster does not have to lower the price of its products. However, the company should work closely with its customers to develop products that are best suited to client’s needs. As a result, Burgmaster would have benefited from stronger brand loyalty.

Home-Style Cookies

Home-Style Cookies is a New York-based baking company. It is a small company with fewer than 200 blue-collar workers. It produces only one type of product sold in different variants. The company sells soft cookies. Competitors like Nabisco, Sunshine, and Keebler produce crisp cookies. They are able to accomplish this feat by using a baking technique that forces most of the water out. The company utilizes a combination of automated and manual processes to produce home-style cookies. There were a number of suggestions made to improve the cost-efficiency of the production process. However, the owners are reluctant to entertain new strategies because of concerns that these may have a negative effect on the quality of the cookies. In addition, some of the suggestions made were rejected on account of corporate social responsibility.

1. Due to the absence of preservatives and additives, home-style cookies are made to order. Computer software calculates the amount of ingredients that has to be mixed on a daily basis (Baltzan, 2011). The automated process allows for the automatic mixing of ingredients in giant mixing machines. When the cookies emerge from the ovens, the same are fed into cooling racks. This is the end of the automated process because after the cooling phase, workers manually place cookies into boxes.
2. The company was able to increase productivity by allowing nonfilled cookies to be cut in a diagonal manner. Productivity was also enhanced after increasing the length of the oven by 25 feet. By increasing the length of the oven, the company was able to bake more cookies under the same time constraints.
3. The company is making the right decision not to automate the packing of cookies because of two primary reasons. First, it is a more effective way to detect deformed cookies. Second, it retains the employment of at least 30 workers. The company is mindful of corporate social responsibility. In other words, the company wants to give back to the community. Aside from the size of the company, the decision not to fully-automate the production process is also based on the need to maintain the production of high-quality cookies. Since it is a small company, the owners could afford not to fully-automate the production process.
4. Due to the absence of preservatives and additives, the company was forced to carry minimal amounts of certain inventories. As a result, the company can claim that it produces “good food.”
5. It is important to consider the taste, and the ingredients used to bake the cookies.
6. The advantage is that the company can increase its revenue selling to health-conscious individuals. The disadvantage is that the company may not be able to cope with demand, because it cannot stockpile cookies in a warehouse.
7. The company focuses on quality-based strategies. The company produces a product that is far better when it comes to health benefits and taste.

Your Garden Gloves

The company maintains flower gardens for both commercial and residential customers. It has grown substantially over the years. It employs eight seasonal workers. Company owners noticed that large jobs took longer to complete. Since the company operates on a small profit margin, it has to find ways on improving the productivity of its workers.

1. The team with the crew size of 2 men had the highest productivity levels. However, the one with the crew size of 3 was the least productive. One possible explanation is that two people work faster because they know that they have so much ground to cover.
2. The four-man crew is not as efficient as the two-man crew. However, it would give peace of mind to the client that the company is doing its best to clean up the mess in time for the garden party to commence.
3. Leadership, employee relations, and motivated workers are qualitative issues that could play an important role in enhancing the team’s productivity.

UAE Institutions

1. The Abu Dhabi National Oil Company will benefit from studying management principles gleaned from the analysis of Home-Style Cookies. ADNOC is a state-owned company, thus, there is less incentive to improve the cost-efficiency of its operations (Thompson, Peteraf, Gamble, & Strickland, 2014). However, the future success and sustainability of the company is dependent on the volume of oil that is able to process on a daily basis. It is imperative that ADNOC officials understand the importance of reducing inventory, in order to reduce the cost of operations. It has to be made clear that an oversupply of oil will cause a glut in the market. As a result, oil prices will plummet, and this will affect the people working for ADNOC (Kaufman, 2003).
2. There are two ideas or principles that analysts can glean from the study of Home-Style Cookies case. First, the ability to anticipate demand means that the company will only produce a product that is needed within a particular time period. Thus, there is no need to build or rent warehouses in order to store excess inventory. Thus, this will help lower the cost of operation and increases the value of the company. Second, this particular case study highlights the importance of corporate social responsibility. ADNOC officials must be sensitive to the needs of the workers and the other members of the community. The ability to maintain optimum levels of inventory means that prices are stable. This means that the workers will not be negatively affected by abrupt changes in the company’s profitability.

References

Baltzan, P 2011, Information systems, McGraw-Hill, New York.

Kaufman, B 2003, Industrial relations to human resources and beyond: the evolving process employee relations management, M.E. Sharpe, Inc., New York.

Thompson, A, Peteraf, M, Gamble, J, & Strickland, J, 2014, Crafting and executing strategy: the quest for competitive advantage, concepts and cases, McGrawhill, New York.

Introduction

Columbia Plastics is a leading producer and seller of skylights and a variety of plastic fabricated building materials. The company is a subsidiary of Fraser Company. Since its inception, the company managed to retain its position as the leading producer of skylights in Seattle, Washington for fifteen years. However, new entrants in the market led to increased competition in the skylight industry.

The dominant firms in the industry, Columbia Plastics, and Vancouver Light are competing based on the prices of their products. The essence of competing based on price is that the company with the cheapest product will be able to gain market share and to improve its profitability in the long-term. However, this strategy threatens the long-term competitiveness of Columbia Plastics in two ways.

First, significant price reductions are reducing the company’s profits, which in turn negatively affects its long-term competitiveness. Second, Columbia Plastics is likely to lose a significant portion of its market share if it is not able to retain its customers through price reductions.

This paper evaluates the alternatives that Columbia Plastics has to respond to the increased threat of competitive rivalry in the skylight industry. Based on the evaluation, recommendations will be suggested to help the company to improve its competitiveness. Moreover, a strategy for implementing the recommended alternative will be proposed.

Problem Statement

Columbia Plastics is facing difficulties in responding to Vancouver Light’s decision to reduce its prices to gain market share in Seattle, Washington. The alternatives available to the company include undercutting Vancouver Light’s prices, maintaining its current pricing policy, and matching Vancouver Light’s prices. However, adopting any of these strategies is likely to affect Columbia Plastic’s profits or market share or both negatively.

Analysis of Alternatives

Matching Vancouver Light’s Prices

In a market that is characterized by high competitive rivalry, customers tend to have low switching costs. To elucidate, competition increases customers’ choices in terms of the products or brands to purchase. Customers make their purchase decisions by considering factors such as the products’ qualities and prices.

When customers have low switching costs, they can easily switch from one brand to another to purchase the product with the preferred qualities or price. In the skylight industry, customers are price sensitive since they can easily switch from one supplier to another in response to a price reduction. Thus, Columbia Plastics can avoid losing its major customers to Vancouver Light by adopting a price-matching strategy.

Price matching is a strategy in which a company sets prices that are equal to those of its main competitor. Thus, Columbia Plastics will have to set prices that are equal to those set by Vancouver Lights. The price matching strategy is likely to work because the two companies are producing skylights with comparable features such as size.

The rationale of this perspective is that customers expect products with similar features to have equal or comparable prices. Moreover, Columbia Plastics has adequate information concerning Vancouver Light’s prices and sales volume. Thus, it will not be difficult to set comparable prices. In this regard, a price matching strategy will be beneficial to Columbia Plastics in the following ways.

First, setting equal prices will eliminate Vancouver Light’s use of low selling prices to create a competitive advantage. Once Vancouver realizes that it cannot undercut its competitor’s prices, the two companies will have to compete based on only three elements of the marketing mix. These include product, place, and promotion.

This will enable Columbia Plastics to defend its market share by leveraging the aforementioned elements of the marketing mix. For instance, the company can use promotional activities such as advertising to inform the market about its products’ prices and qualities. This will prevent the loss of customers to Vancouver. Also, the company can enhance the quality of its products to improve its customer loyalty level.

Second, matching Vancouver Light’s prices will enable Columbia Plastics to improve its profitability in the long-run. Currently, Columbia Plastics still has the largest market share, which is likely to improve its profitability. Besides, matching Vancouver Light’s prices will enable it to increase its sales through alternative strategies such as product differentiation. In this regard, increased sales will enable the company to remain profitable.

Third, Columbia Plastics will be able to prevent a price war in the industry. A price war is a situation in which competitors continuously undercut each other’s prices to gain market share. However, price reductions reduce profit margins and can lead to huge losses in a market where prices are already very low.

Consequently, Vancouver is likely to change its pricing strategy if undercutting cannot help it to achieve any competitive advantage. In particular, the company is likely to increase its prices in the long-run to make profits or breakeven. Similarly, Columbia Plastics will benefit by raising its prices to make profits.

Despite its advantages, matching Vancouver Light’s prices has the following disadvantages. First, Columbia Plastics might not be able to match Vancouver Light’s prices if its operating costs are significantly high. Currently, Vancouver Light can sell at low prices because its efficient production facility enables it to reduce production costs by 25%. Similarly, Columbia Plastics will have to reduce its production costs to sell at low prices.

However, this might not be possible if the company is not able to invest in an efficient production plant to reduce its variable costs. In this case, the company will have to internalize part of the production costs if its selling price is less than the cost per unit. This can lead to huge losses or even the collapse of the company.

Second, matching Vancouver Light’s prices do not guarantee Columbia Plastics a chance to defend or increase its market share. Once the price is no longer a source of competitive advantage, the companies will adopt alternative strategies such as product differentiation, sales promotion, and improved customer services. However, having the resources to implement these strategies do not guarantee the achievement of competitive advantage.

According to the resource-based view of the firm, a company can achieve a competitive advantage only if its resources are valuable, rare, imitable, and non-substitutable. Valuable resources enable a company to formulate strategies that led to improved competitive advantages.

The company can prevent its competitors from imitating its strategy only if its resources are rare, imitable, and non-substitutable. In this regard, Colombia Plastics will not be able to outperform Vancouver as long as the later can imitate its resources and strategies.

Third, Columbia Plastics will become a price taker if it decides to match Vancouver Light’s prices. The disadvantage of being a price taker is that Colombia Plastics will not be able to control its prices since its pricing decisions will depend on the changes in the prices of Vancouver Light’s products. Vancouver Light can use this weakness to drive Columbia Plastics out of business.

For instance, Vancouver Light can set prices that hardly cover production costs. As a price taker, Columbia Plastics will have to adopt the low prices to sell its products, albeit at a loss. If Vancouver Light maintains the low prices for a very long time, Columbia Plastics’ loses will accumulate, and it will run out of business in the long-run.

Undercutting Vancouver Light’s Prices

Undercutting is a strategy in which a company sets its prices below those of its main competitor. Thus, Columbia Plastics will have to set prices that are less than Vancouver Light’s are. The main objective of this strategy is to increase sales volume by charging lower prices than the competitor’s charge. Undercutting a competitor’s price is likely to work in a market that is characterized by a large number of price-sensitive customers.

To elucidate, price-sensitive customers often switch to the supplier or seller who charges the lowest price in the market. The demand for a product will be price elastic if a large proportion of the market consists of price-sensitive customers.

A price-elastic demand is a situation in which the demand for a product changes significantly in response to a change in its price. Maintaining low prices is often achieved through cost reduction strategies. For instance, Columbia Plastics can reduce its production overheads to sell at the lowest price.

The advantages of undercutting Vancouver Light’s prices include the following. First, Colombia Plastics is likely to retain or increase its market share if it decides to sell its skylights at 130 dollars. The rationale of this strategy is that Columbia Plastics’ price will be 14 dollars (10%) less than the price of Vancouver Light’s products.

Since customers in the skylight industry are price elastic, a ten percent reduction in selling price is likely to increase demand for the cheapest product. The resulting increase in sales will improve Columbia Plastics’ profits. Also, the low prices will enable the company to improve its brand loyalty, which in turn will enable it to defend its market share.

Second, charging lower prices than Vancouver is likely to ensure improved efficiency at Columbia Plastics. In a highly competitive market, a company has to adopt a cost leadership strategy to set the lowest price. A cost leadership strategy involves reducing production costs by enhancing efficiency in production.

Thus, charging the lowest price in the market will motivate the managers of Columbia Plastics to improve their production efficiency to reduce production costs. Improved production efficiency will bolster Columbia Plastics’ financial performance in the long-run, especially if its main competitors exit the market, thereby enabling it to increase its prices.

Although the preceding paragraphs provide a strong case for undercutting Vancouver Light’s prices, Columbia Plastics’ financial performance is likely to be compromised because of the following reasons. To begin with, undercutting Vancouver Light’s prices is likely to lead to a vicious price war. This perspective is based on the fact that Vancouver Light is also interested in gaining market share.

Besides, it has always employed a penetration pricing strategy to increase its market share. A penetration pricing strategy involves setting prices below industry average prices to gain market share. In this context, it is important to assess Columbia Plastics’ ability to survive a price war. Initially, Columbia Plastics’ factory price was 200 dollars, whereas Vancouver Light’s retail price was 144 dollars.

Currently, Columbia Plastics’ unit cost is 135 dollars. However, this figure does not include the cost of maintaining the company’s sales force or its profits. Selling the skylights for 130 dollars will lead to losses. Thus, undercutting Vancouver Light’s prices is not a solution to Columbia Plastics’ problems.

Another disadvantage of undercutting Vancouver Light’s price is that Columbia Plastics might have to compromise the quality of its products. Since the company is likely to make little or no profits by selling at the lowest price, it will have very little financial resources for product development. Undoubtedly, the lack of adequate financial resources is one of the major causes of failure in the implementation of marketing plans.

For instance, the company might be forced to lower the quality of its skylights to reduce production costs. Also, the lack of adequate funds might force the company to reduce its expenditure on marketing communication and its sales team. This will severely affect the competitiveness of its skylights. For instance, the sales executives are likely to lose motivation in their work if they are forced to work with an inadequate budget.

Similarly, less expenditure on marketing communication might negatively affect the company’s brand awareness, whereas compromising product quality will lead to low customer satisfaction and brand loyalty. These scenarios or examples suggest that undercutting Vancouver Light’s prices is likely to reduce rather than to improve Columbia Plastics’ competitiveness.

Maintaining Current Pricing Policy

Currently, Columbia Plastics’ prices are higher than Vancouver Light’s prices are by at least 20%. The implication of this difference is that customers will believe that Colombia Plastics is charging a premium price for its products. In this regard, the company will have to provide a convincing reason for its decision to sell at a premium price.

In particular, the customers must understand the value that they will obtain by spending more to buy Columbia Plastics’ products. One of the strategies for justifying a premium price is to differentiate the product. This involves developing a product whose qualities are superior to that of the competitor. In this case, producing a product with superior qualities justifies the producer’s decision to charge a premium price.

Product differentiation must be supported by an effective market positioning strategy. Market positioning refers to the process of creating a perception among customers that a particular brand is superior to its substitutes. Thus, Columbia Plastics should differentiate its products and position them appropriately to maintain current prices.

Maintaining the current pricing strategy will benefit the company in the following ways. First, charging a premium price will enable the company to improve its financial performance. The high price will offset the loss in revenue attributed to the reduction in sales as customers switch to Vancouver Light to take advantage of lower prices.

Second, Colombia Plastics is likely to be successful in pursuing a differentiation strategy because of its vast experience in the market. Having served the market longer than Vancouver Light has, Columbia Plastics is likely to have a better understanding of customer needs.

Also, it is likely to have established strong customer loyalty in the last fifteen years. Generally, a clear understanding of market needs coupled with high customer loyalty, will enable the company to develop a high-quality product and to convince customers to purchase it at a premium price.

Finally, maintaining the current price strategy will enable the company to concentrate on serving a niche market. In particular, the company will be able to utilize its scare resources to serve customers who are interested in high service quality and immediate delivery. This is likely to enhance the company’s customer satisfaction rate.

Despite its potential to boost Columbia Plastics’ financial performance, maintaining the current pricing strategy has the following disadvantages. First, Columbia Plastics is likely to lose most of its major customers (homebuilders) by maintaining the current pricing strategy. This will happen if the major customers are more interested in low prices rather than improved service or product quality.

Columbia Plastics is likely to make huge loses if it loses its key customers or homebuilders who account for over half of its sales revenue. Second, the company might face difficulties in convincing customers to buy its skylights at a premium price. For instance, differentiating the skylights by improving their qualities might require a huge financial capital, which the company might not afford.

Similarly, informing the public or potential customers about the superior qualities of the skylights might lead to increased expenditure on marketing communication initiatives. The resulting increase in the company’s operating costs will negatively affect its profits.

Finally, Vancouver Light can imitate the strategies employed by Columbia Plastics to sell skylights at a premium price. For instance, Vancouver Light can also adopt a differentiation strategy by improving the quality of its products and customer services. The imitation will enable Vancouver to eliminate the competitive advantage that Columbia Plastics will achieve through product differentiation.

If Vancouver Light can differentiate its products without increasing its prices, Columbia Plastics will lose a significant share of its market share. To elucidate, Vancouver Light will be the best supplier by being able to offer high-quality products at the lowest price. Thus, the majority of the customers will have the incentive to buy from Vancouver Light rather than Columbia Plastics.

Recommendations

The discussions in the preceding paragraphs indicate that undercutting Vancouver Light’s prices is not a viable option. This strategy solves the problem by enabling Columbia Plastics to expand or defend its market share through low prices. However, it is not sustainable since it can lead to a price war that will ultimately drive the company out of business.

Matching Vancouver Light’s prices will enable Columbia Plastics to end the price-based competition. Consequently, it might be able to improve its competitiveness by leveraging the elements of the marketing mix, such as promotion, place, and product. However, this strategy is very risky because it will fail if Columbia Plastics is not able to maintain prices that are equal to those of Vancouver Light. Consequently, matching Vancouver Light’s prices is also not viable.

Maintaining the current pricing strategy will enable the company to set prices that cover its costs and allow it to make a profit. However, Columbia Plastics’ price will be significantly higher than that for Vancouver.

Thus, Columbia Plastics is likely to lose most of its major customers if it is not able to convince them to buy at a higher price. Moreover, Vancouver Light can gain a dominant position in the market if it can offer high-quality skylights at a low price.

Despite its weaknesses, maintaining the current pricing policy is the best option because of the following reasons. First, the current pricing policy is the only option that can enable the company to make profits in the short-run. Second, not all customers consider price as the major determinant of their purchase decisions.

Thus, Columbia Plastics can respond to the exit of its major customers by focusing on serving clients who are interested in quality aspects such as immediate delivery of orders. Third, Columbia Plastics can progressively improve its production efficiency to reduce its prices in the medium-term or the long-run. This will help in avoiding the risk of making huge losses through sudden or unplanned price reductions.

Implementation

Given the dynamics of the competitive environment, the current pricing strategy should be implemented as follows. In the first step, Columbia Plastics should conduct market research to identify the non-price factors that determine customers’ purchase decisions. Additionally, the research should enable the company to estimate the size of the market that is likely to continue buying its products at the current prices.

In the second step, the company should use the information collected through market research to differentiate its products. This can involve modifying the products by adding extra features to them.

Alternatively, the company can focus on providing excellent customer services such as user manuals to enable the unskilled customers (do-it-yourselfers) to install the skylights on their own. Generally, the company’s new value proposition should focus on encouraging customers to purchase based on non-price factors.

The third stage should focus on repositioning the skylights as superior products in the market. This will create the perception that Columbia Plastics’ products have a superior value that is worth paying for at a high price. To achieve this objective, the company should focus on effective market communication to create awareness about its products or brands. For instance, the company can advertise its skylights through print and electronic media.

Moreover, the company can engage in relationship marketing to improve the loyalty of its customers. Relationship marketing focuses on winning the trust and loyalty of major customers through continuous provision of specialized services that satisfies their needs.

Finally, the company should focus on reducing its production costs to reduce its prices in the long-run. Reducing prices in the long-run will enable the company to remain competitive, even if Vancouver also manages to differentiate its products.

Columbia Plastics can build a specialized production plant to reduce its production costs. Additionally, it can supply directly to customers who purchase in bulk to prevent an increase in its retail prices. For instance, the company’s distributors add a markup of up to 50% on its factory price. Thus, eliminating distributors will significantly reduce the company’s retail prices.

Global competitiveness is determined by several factors including inflation rates and the economic system of the country, its market structure, and export-import policies. Global competitiveness has a great impact on the fashion industry and its potential, market opportunities, and growth. The current literature can be divided into two broad categories: theoretical literature and case study examples which reflect the current state of the global market. Boyd (2006), Dicken (2003), and Usunier (2000) produce a theoretical explanation of global competitiveness and its impact on different industries. Usunier (2000) analyzes the impact of cultural values and traditions on entrepreneur activity and business operations. Finance is a scarce commodity which meant that those who had access to it had an immense competitive advantage. But today, raising finance is perhaps the least difficult of the tasks facing an organization. Boyd (2006) and Dicken (2003) underline that with supply outstripping demand in the world’s financial markets, it has become comparatively easy for an entrepreneur to find the capital he or she needs. Many of the companies in which these investments are made a trade at enormous price/earnings ratios even though they have never sold a thing. What these investments represent is the recognition that an organization’s key asset is not its economies of scale, its track record, its brand — or any of the other trump cards traditionally held by the incumbents in a market. Saloner et al (2001) evaluate the role and impact of strategic management on global competitiveness and entrepreneur activity. The author concludes that what the investors are betting on is the organization’s knowledge — often pure, unadulterated knowledge, untouched by conventional commercial realities — which will potentially stand the accepted way of doing things on its head. An organization can gather information (from itself, from its customers, from the market as a whole) and exploit the knowledge it can distill from this which is the new scarce resource.

One of the main documents which reflect the current state of competitiveness in The Global Competitiveness Report. The report provides businessmen and analysts with competitive indexes and country profiles, including analysis of business community and economic opportunities in different countries of the world. For fashion industry entrepreneurs, this information can help to evaluate market potential and growth opportunities, possible threats, and weaknesses of the market. The report underlines that financial muscle, a large labor force, or a major manufacturing plant is much less valuable; as many companies with large quantities of physical assets are finding, these things are often a hindrance, an impediment to change. All over the world, large organizations are recognizing the importance of information. The purpose of a brand is to generate loyalty for a product that is essentially undifferentiated. Attempts to change their traditional formulae have led to customer resistance even though the companies’ tasting panels showed that people prefer the new formulation. more and more brand-based companies are being forced to provide information because this is what their consumers expect. Technology and the Internet have both meant that the amount of information available to individuals is increasing exponentially: if you are not sure what you are buying from one manufacturer, you can check out the rival products quickly and cheaply. Information is empowering consumers.

The large layer of literature provides an analysis of the fashion industry and its benefits and threats for entrepreneurs. Cumbler (2006), Donald (2001), Fields (2003) find that in the future, entrepreneurs will need to rely far less on the high-level image created by a brand but will be able to make far more informed purchase decisions. Already on the Internet, companies are acting as ‘infomediaries’ who help potential purchasers find the best deal around, whether this applies to used cars or airline tickets. Global competitiveness will be determined by such factors as the global leadership of MNCs and TNCs. To compete on the global scale, fashion retailers should adapt to the new environment and change the balance of power from the corporate manufacturer to the individual purchaser. It means that consumers will be able to specify what they want more precisely rather than accept what the supplier or retailer offers. As home shopping for groceries takes off, we predict that the existing supermarket chains, whose brands at the moment are linked to choice, quality, freshness, and so on, will develop information-based brands that will emphasize different qualities — the amount of information they have on a customer’s previous purchases, being able to recommend recipes based on an individual’s preferences and so on.

Ford (2007), Knutsen (2003), and O’Hara (2004) underline the globalization of the fashion industry. They find that global competitiveness depends upon a country’s image and political stability. This is a trend that will not be confined to retailers: given not only escalating consumer expectations but also the highly automated production lines and just-in-time supply chains of most manufacturers, the days of mass production must be severely limited. One of the key areas of competition is over access to distribution channels to ensure that products could be brought to market. More precise targeting could be made of individual consumers (a topic we cover in-depth later on in the book), leading to higher returns. The question is not whether the marketing budget is apportioned inefficiently, but how inefficiently. Yet we assume that because the information has been distilled into knowledge — because the market research has become an executive report — the most important information has been preserved.

Bibliography

Boyd, Britta. 2006, Globalization and Entrepreneurship: Policy and Strategy Perspective, Edward Elgar Publishing.

Cumbler, J. T. 2006, Slaves to Fashion: Poverty and Abuse in the New Sweatshops. Journal of Social History, 40 (1), 43.

Dicken,Peter. 2003, Global Shift-Reshaping the Global Economic Map in the 21st Century. The Guilford Press; 4th edition.

Donald, B. 2001, Economic Competitiveness and Quality of Life in City Regions: Compatible Concepts? Canadian Journal of Urban Research, 10 (1), 43.

Fields, J., 2003, Fashion and Its Social Agendas: Class, Gender, and Identity in Clothing. Journal of Social History, 37 (1), 43.

Ford, G. S., Koutsky, L. J., Spiwak, L.L., 2007, Competition after Unbundling: Entry, Industry Structure, and Convergence. Communications Law Journal, 59 (1), 43.

The Global Competitiveness Report 2008-2009. Web.

Knutsen, H. M., 2003, Globalisation and the Garment Industry in Sri Lanka. Journal of Contemporary Asia, 33 (1), 223.

O’Hara, Ph. A. 2004, Cultural Contradictions of Global Capitalism. Journal of Economic Issues, 38 (1), 413.

Saloner, Garth, Shepard, Andrea, Podolny, Joel. 2001, Strategic Management. Wiley. Usunier J. C. 2000, Marketing Across Cultures 3rd edn. Prentice Hall; 2 Sub edition.

Abstract

The present study, which is quantitative in approach, utilizes a descriptive research (survey research) design to empirically investigate how the adoption of green supply chain initiatives influences a firm’s competitiveness and image within the UK’s manufacturing sector. The findings of this study are both insightful and informative and can be used by manufacturing organizations to leverage competitive advantage as well as enhance their image and reputation.

In summary, the study has found that (1) most firms’ employ a reactive approach rather than a proactive approach in the adoption of green supply practices practices, (2) most organizations are aware of GSCM practices and adopt the initiatives in varying levels depending on the drivers or pressures informing the adoption process, (3) most organizations have put in place measures to improve internal environmental management, investment recovery and reverse logistics, though the implementation of specific factors of eco-design and green purchasing is lagging behind, (4) green supply chain practices can assist organizations to leverage competitive advantage through cost savings, increasing national and international business opportunities, improving operational efficiency, enhancing the quality of products and improving employee productivity, and (5) firms that have fully integrated green supply chain practices into their supply chains are perceived favourably by customers and supply chain partners.

Introduction

Background

Green supply chain management (GSCM) has been gaining substantial interest amongst scholars and practitioners of supply chain management, purchasing, operations, and logistics, especially over the last decade (Perotti et al 2012), in large part due to the increasingly competitive, regulatory and community pressures forcing organizations to balance their economic and environmental performance (Sarkis 2012). With increased pressures for organizations to compete under an environmentally sustainable paradigm, it is expected that enterprises will need to develop and implement strategies to minimize adverse environmental impacts associated with their products, services, and operations (Zhu et al 2005).

Srivastava (2007) cited in Perotti et al (2012, p. 641) defined GSCM as “…integrating environmental thinking into supply chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to consumers as well as end-of-life management of the product after its useful life.” Success in addressing environmental concerns in supply chain management may provide new opportunities that may serve as a triggering factor for competitiveness, value addition to core business programs, and progression of organizational image and reputation (Holt & Ghobadian 2009).

However, despite the proliferation of hundreds of scholarly papers on the integration of environmental issues within supply chain management (Sarkis 2012), extant knowledge on how green supply networks can be used to enhance competitiveness and image development in the manufacturing sector remains highly fragmented even though organizations within this domain are highly dependent on their environments and tend to continuously adapt to external change dynamics (Zhu et al 2010; Lee et al 2012). Additionally, in recent years, the UK’s manufacturing sector has been on a downward trend in terms of its contribution to the country’s GDP (Holt and Ghobadian 2009), hence the need to undertake a study investigating how firms within the sector can promote their image and competitiveness through the adoption of green supply chain practices.

Research Aim, Objectives & Research Questions

The present study focuses on GSCM practice in selected manufacturing organizations within the United Kingdom (UK), intending to empirically investigate how the implementation of GSCM initiatives influences a firm’s competitive orientation and image. The specific objectives of this study include:

1. to investigate the degree to which UK’s manufacturing organizations are aware of the principles and initiatives of GSCM;
2. to investigate the perceptions of senior managers within the organizations on the role of GSCM in spurring competitive advantage and image/reputation development;
3. to identify and potential trajectories for organizations within the manufacturing sector to build image and competitiveness through GSCM initiatives; and
4. by doing so, contribute substantially to the body of knowledge regarding green supply networks and their potential organizational outcomes within the manufacturing sector.

The present research is guided by the following research questions, with the view to achieving the aim and objectives as set out in the study:

1. What have the organizations done to ensure the implementation of green supply initiatives within the supply chain management network?
2. How do green supply initiatives influence the organization’s competitive advantage and image development, especially along the supply chain?
3. What should be done to facilitate organizations in the achievement of competitive advantage and positive image using their supply channels and networks?

Rationale of the Study

The purpose of this study is to empirically investigate the extent and nature of GSCM adoption and implementation in the UK manufacturing sector; and if the implemented green supply chain initiatives have led to the enhancement of competitive advantage and image development within the supply chains of the concerned industry players within the sector. Fulfilling this purpose is worthwhile for organizations within the manufacturing sector in two broad ways. While corporate environmental management has traditionally oriented itself towards facilitating internal environmental initiatives of the organization (Hervani et al 2005), a stream of extant literature (e.g., Holt & Ghobadian 2009; Lee et al 2012) now demonstrates that focus is gradually shifting towards the effective and efficient management of an organization’s impacts outside the confines of the enterprise, into the management of upstream and downstream supply chain activities.

More importantly, with increasing environmental regulations witnessed in recent years, organizations within the manufacturing sector are expected to fulfill socially responsible business practices by producing environmentally sound products and servicing them to the final customers’ demand by employing environmentally sustainable practices throughout the supply chain (Hong et al 2009). The findings of this study unearth demonstrate socially and environmentally responsible business practices that could be used by organizations within the manufacturing sector to enhance their supply chain management models through the adoption of green supply initiatives.

The second reason why this topic is worthwhile is predicated upon the need for organizations to adopt strategies and practices that will enhance their business outcomes, including competitive advantage and reputation development. Extant literature demonstrates that organizations throughout the world are continuously attempting to develop novel and innovative ways to enhance their performance and competitiveness (Green et al 2012). Bacallan (2000) cited in Rao and Holt (2005, p. 898) is of the view that “some of these organizations are enhancing their competitiveness through improvements in their environmental performance to comply with mounting environmental regulations, to address the environmental concerns of their customers, and to mitigate the environmental impact of their production and service activities.” Since the manufacturing sector is a major player in supply chains under its responsibility to produce products for onward transmission to ending customers (Hong et al 2009; Holt & Ghobadian, 2009), the findings of this study serve as a reference point for organizations willing to implement GSCM to achieve environmental sustainability within their supply chains and hence enhance their competitiveness and reputation.

The choice of the manufacturing sector to serve as the study context in this research has been informed by two relevant issues. The first is grounded on the fact that the UK’s manufacturing sector, though not as big as the services sector in terms of contributing to the country’s gross domestic product (GDP), increasingly faces environmental pressures from government agencies and customers to improve its environmental image and performance (Holt & Ghobadian, 2009). organizations within the manufacturing sector can achieve these outcomes if knowledge about the adoption of environmentally sustainable green supply practices is availed to them. The second issue concerns the fact that although the manufacturing sector is at the core of supply chain networks (Quayle 2003; Hong et al 2009), many organizations continue to experience losses due to ineffective production and supply chain practices, and also due to lack of integration and coordination between their supply networks and customer expectations (Holt & Ghobadian 2009). Findings from this study will therefore assist these organizations to integrate green practices into their supply chain not only to boost their corporate image by satisfying the final customers of the supply chain but also to enhance performance in line with the acknowledgment that GSCM promotes efficiency, competitiveness, marketing exposure and synergy among business partners and lead corporations (Rao & Holt 2005).

Dissertation Structure

To successfully meet the study objectives and answer the research questions, this project is further organized into four chapters. Chapter 2 contains a literature review on the UK’s manufacturing sector and the industry’s application of green supply chain initiatives to provide a glimpse of the scenario about the achievement of competitive advantage and image development. This chapter also contains a literature review targeting the areas of theory in green supply networks, and also provides a critical synthesis of the relevant literature on green supply chain management along with some attempt aimed at critically evaluating the extant literature. Chapter 3 discusses the research methodology used in this study, along with the justifications considered in selecting the methods and approaches. Overall, this section discusses the study design, population and sample, data collection approaches, ethical considerations, and data analysis techniques. Chapter 4 is dedicated to a detailed analysis of the research findings guided by the objectives and key research questions, along with a comprehensive discussion of the findings. The final section provides conclusions and recommendations arising from the research findings as well as implications for future research.

Literature Review

Introduction

The present study investigates how the adoption of green supply chain initiatives influences a firm’s competitiveness and image within the UK’s manufacturing sector. This chapter analyzes relevant literature on the UK’s manufacturing sector, supply chain management (SCM), and green supply chain management (GSCM), before exploring two theories related to supply chain networks – the resource dependence theory and institutional theory. The chapter then proceeds by analyzing literature on the critical factors fostering the implementation of the practices, before analyzing literature on current green supply chain trends and practices. Afterward, the chapter evaluates extant literature on GSCM and firm competitiveness as well as green supply chain initiatives and image development. The chapter then concludes with a summary of the main themes reviewed in the section.

The UK’s Manufacturing Sector

The manufacturing sector continues to play a substantial role in the growth and prosperity of the economy in many countries (Huang et al 2012a). Extant literature demonstrates that “in 2009, manufacturing was the third largest sector in the UK economy in terns of Gross Value Added (contributing £126.74 billion), behind Wholesale and Retail (£137.68 billion) and Financial Services (£126.89 billion)” (Hatton 2012, p. 1). The sector remains a significant contributor to the country’s GDP, exports, and employment, though scholars and practitioners agree that it has been in relative decline for a long time now (Holt & Ghobadian 2009). Consequently, the need to retain national and, in some instances, international competitive advantage is leading UK’s manufacturing firms to develop corporate strategies, entailing integration and development of their supplier bases (Kim & Min 2011), as well as “greening” their business practices to meet environmentally challenging requirements (Holt & Ghobadian, 2009). Indeed, an increasing number of UK manufacturing firms are embracing the concept of GSCM not only to get more international business opportunities and cut down on costs by enhancing their supply chain practices but also to increase productivity and enhance the environmental image (Kim & Min 2011).

Manufacturing firms in the UK, which are concentrated in areas dealing with petroleum products, chemical products, pharmaceutical products, rubber and plastic, metal products, computers, and electronic products, electrical equipment, machinery, and transport equipment, among others (Hatton 2012), certainly require GSCM because the “waste generation and natural resource use, primarily attributed to manufacturing, contribute to environmental degradation” (Hsu et al 2013, p. 658). Additionally, the mounting global concerns call for an urgent need for these organizations to shift their strategies and operations, with the view to responsibly incorporating environmental issues into their supply chains to effectively deal with devastating environmental, economic and social ramifications brought about by environmental challenges (Lee 2008; Hsu et al 2013).

Many firms in the UK’s manufacturing sector are increasingly adopting green supply chain initiatives due to market pressure mostly coming from downstream customers and consumers, regulatory pressures mostly coming from government agencies, and competition (Holt and Ghobadian 2009). In the current environmental legislation, government agencies and other pressure such groups such as Greenpeace and Friends of the Earth, are keen to ensure that manufacturing firms in the UK implement environmental management standards (ISO 14000 series), which assist organizations to move towards ecologically sustainable practices by (1) encouraging an internationally common approach to environmental management, (2) strengthening the organizations’ capacities to improve and measure environmental performance through continual system audits, and (3) improving international trade and removing trade barriers (Beamon, 1999).

Supply Chain Management (SCM)

Extant literature demonstrates that SCM appears in current discourse as a novel concept but the actual definitions of what it encompasses are at best blurred. As noted by Holt and Ghobadian (2009), SCM exhibits typical characteristics of a subject at initial phases of evolution including definitional multiplicity and perceived lack of conceptual clarity. Today, there is yet to be an unambiguous agreement as to the definition of SCM even though several academics have focussed interest on the development of an integrated definition of SCM by systematically evaluating a collection of proposed definitions found in numerous scholarly articles.

The present study adopts a definition presented by Lambert et al (1998) cited comprehensively in Holt and Ghobadian (2009, p. 934), who define “SCM as the integration of key business processes from end-user through original suppliers that provide products, services, and information that add value for customers and other stakeholders.” This particular definition bears similarities with the definition presented by Gibson et al (2005) also cited in Holt and Ghobadian (2009, p. 934), who view “SCM as encompassing the planning and management of all activities involved in sourcing and procurement, conversion, demand creation and fulfilment, and all logistic management activities.” In attempts to operationalize SCM, Lambert et al (1998) cited in Holt and Ghobadian (2009) identified three closely interrelated elements including (1) SC business processes – activities that produce a specific output of value to stakeholders, (2) SCM components – managerial variables by which business processes are integrated and managed across the SC, and (3) SC structure – the network of members of SC. These components will be evaluated in more detail within the GSCM context.

Green Supply Chain Management (GSCM)

Increasing environmental concerns and resource depletion challenges have caused governments and regulatory agencies operating at various levels to design and implement stricter regulations in their supply chains not only in the UK but also globally (Holt & Ghobadian 2009). Concurrently, members of the public are increasingly becoming aware of existing environmental challenges through formal and informal environmental education channels (Sarkis 2012). Given these socio-political shifts, firms within the manufacturing sector are slowly implementing environmental practices such as cleaner production and ISO 14001 certification, while others are adopting recent regulations such as the RoHS (Restrictions of the use of Hazardous Substances) directive to develop the capacity to broaden their environmental practices to their suppliers and customers (Zhu et al 2010). As a direct consequence of these efforts, a systematic approach called the green supply chain management (GSCM) is gaining recognition as the approach of choice in SCM. This systematic approach, which integrates environmental issues into SCM, has been increasingly accepted and implemented by forward-thinking organizations across the world through the use of such practices as green purchasing, customer cooperation with environmental considerations, eco-design, and investment recovery (Zhu et al 2010).

Available literature demonstrates that unlike traditional supply chain paradigms, “a green supply chain considers the environmental impacts of the production process as goods flow through the supply chain” (Hsu et al 2013). These authors further elaborate that green supply chains are inexorably different from traditional supply networks because they attempt to “close the loop” by adopting practices such as reuse, remanufacturing, and recycling products and materials using a common forward supply chain, with the view to reducing adverse environmental impacts (e.g., air, water, and land pollution) and wasted resources, from the acquirement of raw materials by organizations to the ultimate use and disposal of finished products by customers. Modern GSCM practices not only deal with environmental effects in forwarding supply chains dealing with the delivery of products and services to end customers but also place much focus on reverse supply networks dealing with recycling of used products, reuse, remanufacture, and reprocessing into raw materials (Hu & Hsu (2010).

Theoretical Underpinnings of SCM & GSCM

Many theories have been developed over the years to explain SCM and GSCM (Holt & Ghobadian 2009), but this section will only illuminate two of such theories – the resource dependence theory and the institutional theory. Several scholars have expounded on the resource dependence theory (RDT) to demonstrate the importance of GSCM in achieving firm competitiveness and image development. For example, Lee et al (2012, p. 1149) note that “in the resource dependence perspective, establishing inter-organizational collaboration is essential to gain competitiveness, especially as risks in the firm’s global supply chains have been amplified and relying solely on internal resources is not sufficient to compete with other global firms.” The RDT underscores the fact that only a few organizations are internally self-sufficient concerning their strategically critical resources, and hence they must rely on outside resources and partnerships with other organizations to safeguard their competitiveness. Consequently, firms that lack essential resources to realize their objectives must seek competitiveness by establishing mutually beneficial relationships with partner firms to obtain the needed resources.

According to the RDT, organizations also seek to minimize uncertainty and manage external dependence by purposely structuring their exchange relationships and instituting formal and informal linkages with other organizations not only to provide information about the activities of a particular organization which may have an impact on the focal organization but also to provide a communication channel for information and to offer a significant first step in obtaining commitments of support from important components of the environment (Lee et al 2012). In summary, therefore, firms are not only able to synergistically combine their own resource sets with the complementary resources of partner firms through the interdependence, hence developing a resource buddle that is unique and hard to imitate but is also able to obtain sustainable competitive advantage and enhanced organizational performance by cultivating such relationship-specific capabilities to become superior to what these firms may uniquely possess on their own (Lee et al 2012; Perotti et al 2012).

Lee et al (2012, p. 1152) acknowledge that “in the context of GSCM, inter-organizational collaboration is even more important for managing the internal and external coordination and cooperation to have the system successfully implemented throughout the whole supply chains.” This view is reinforced by Kim and Min (2011), who argue that for large manufacturing organizations to effectively implement GSCM-oriented initiatives including green purchasing, eco-design, and cooperation with customers, they need to develop good internal environmental management as well as effective and efficient external cooperation and coordination with suppliers and customers in their supply chains as illustrated in the RDT.

Consequently, as suggested by Lee et al (2012), manufacturing organizations need to make collaborative efforts with both the first- and the second-tier suppliers, along with other global buyer organizations, with the view to instituting and maintaining strategic green networks that will enhance compliance with environmental regulations as well as customer demands. Additionally, from the supplier firms’ perspective, it has been noted that adopting green supply chain initiatives could create potential business opportunities because many firms are demanding that their suppliers implement the initiatives and fulfill additional environmental requirements including environmental audit programs (Lee et al 2012).

On its part, “institutional theory asserts that firms adopt initiatives in order to gain legitimacy or acceptance within society” (Zhu & Sarkis 2007, p. 4335). This implies that the implementation of certain organizational practices such as green supply chain initiatives may indeed enhance an organization’s legitimacy or acceptance to operate by external actors such as government agencies and customers. The theory, which was originally coined by Jennings and Zardbergen (1995), holds that environment alignment may be influenced by three pressures: normative (pressure exerted by external stakeholders who have a vested interest in the firm such as customer requirements), coercive (pressure exerted by those in power such as government agencies), and mimetic (pressure occurring when a firm attempts to mimic the actions of successful competitors within the industry). The framers of the theory “argue that because coercive forces, through regulations and regulatory enforcement, have been the main pressures for environmental management practice adoption, firms within an industry have implemented similar practices” (Zhu & Sarkis 2007, p. 4338). This assertion demonstrates that the theory can be used to show that the realization of competitive advantage is a major concern for firms in the adoption of green supply chain practices.

Critical Factors for Fostering GSCM

According to Hu and Hsu (2010), many organizations are still facing challenges in adopting and implementing green supply chain initiatives as they are yet to discover bundles of drivers that may be used to foster the development of green supply chain initiatives through the development of organizational capabilities. Extant research demonstrates that a multiplicity of factors individually and collectively foster green supply chain adoption among manufacturing organizations in various countries across the world (Kim & Min 2011; Lee et al 2012). A critical analysis of green supply chain literature demonstrates that organizations adopt GSCM due to external stakeholder pressures and customer demands, top management commitment, organizational capabilities, a willingness by suppliers to participate in GSC initiatives, and government involvement (Lee 2008).

According to Lee (2008, p. 191), government involvement in green supply chain practices “includes a range of scope from direct technical and financial support to indirect encouragement with tax-cut incentives and to infrastructure development for environmentally friendly industrial complexes.” In organizational capabilities, “a firm may undertake a set of endeavours to minimise the negative environmental effects associated with the entire life cycle of its products or services, starting from design to acquisition of raw materials to consumption and product disposal” (Hsu et al 2013, p. 659). These authors concluded that the most important drivers for the adoption of green supply chain practices include regulatory measures, customer pressures, competitor pressure, and socio-cultural responsibility.

Current GSCM Trends & Practices

From the existing literature, it is clear that many manufacturing industries in the UK are increasingly realizing that environmental sustainability is one of the critical defining factors of a firm’s performance, competitiveness, and survival. In a study aimed at evaluating the extent and nature of implementing green supply networks in the UK manufacturing sector, Holt and Ghobadian (2009) found that although corporate environmental management has characteristically focussed on managing internal environmental practices, attention is increasingly shifting towards the management of a firm’s impacts outside the boundaries of the organization as demonstrated by the rising number of manufacturers who have shown concern in managing their upstream and downstream supply chain activities.

In assessing both the operational practices and pressures for green supply networks among 149 manufacturing firms in the UK, Holt and Ghobadian (2009) found that the most common practices for firms adopting GSCM were predicated upon internal cost-saving activities and that the size of the company does not have a direct impact on green supply chain initiatives even though smaller manufacturing companies reported limitations in adopting the initiatives. By comparison, Zhu and Sarkis (2004) study evaluating the relationships between GSCM practices and performance of manufacturing firms in the Chinese context found that three industries (automobile, power plants, and electronic industries) varied considerably in their adoption and implementation of GSCM initiatives. An important finding of Zhu and Sarkis’s study is that “it identified four kinds of GSCM practices, including internal environmental management, external environmental management, investment recovery and eco-design” (Huang et al 2012b, p. 148). Another study done in 2010 by Zhu and colleagues identified green purchasing, customer cooperation with environmental considerations, eco-design, and investment recovery as important GSCM practices for any forward-thinking organization within the manufacturing sector to consider adopting and implementing (Zhu et al 2010).

Within the manufacturing sector, green supply chain practices have largely been categorized in the literature as follows:

Green Purchasing

Available literature demonstrates that “green purchasing focuses on creating external linkages with suppliers to ensure that they are practicing sound environmental management activities” (Hsu et al 2013, p. 660). Green purchasing not only ensures that purchased products have advantageous ecological features, such as reusability, recyclability, and non-toxic materials, but also addresses concerns in waste minimization, material replacement through proper sourcing of raw materials, and non-use of hazardous products in manufacturing or purchasing processes (Hong et al 2009).

Since supplier involvement is a critical component in the attainment of environmental objectives, a stream of extant literature (e.g., Lee 2008; Hu et al 2010; Kim & Min 2011) acknowledges that environmentally proactive organizations are increasingly managing their suppliers’ environmental performance to warrant that purchased products are environmentally friendly and have been developed through environmentally conscious processes. Consequently, Hsu et al (2013, p. 660) argue that “green purchasing revolves around evaluation of suppliers’ environmental performance and providing advice to suppliers to improve their performance.” In the UK’s context, leading manufacturing firms such as SABMiller plc, Reckitt Benkiser, and Imperial Chemical Industries have all instituted green procurement practices with suppliers and are indeed encouraging them to obtain environmental certification such as the ISO 14001 (Holt & Ghobadian 2009).

Environmental Design

Most environmental design initiatives are concerned with internal and external collaboration on both product and process design, with the view to minimizing environmental impacts of products during the life cycle (Vachon & Klassen 2006). Hsu et al (2013, p. 661) acknowledge that while the prominence of the environmental design was primarily grounded on technical enhancements that could be undertaken on both products and processes to minimize environmental costs, organizations adopting GSCM are increasingly realizing that it is “essential to develop a healthy working relationship with consumers, suppliers and governmental authorities in order for design for environment to truly become an integral part of green supply chain initiatives.”

On their part, Zhu et al (2010) argue that an underlying pre-requisite for initiating environmental design practices is the external coercive, normative, and socio-cultural pressure that requires to be exerted on the firm to influence cross-functional cooperation among units both within and outside the boundaries of the organization. It has been reported in the literature that green purchasing does not characteristically have the same investment requirements as environmental design because it takes less time for additional staff training and less need for supporting technologies as required in supporting environmental design initiatives, particularly in response to customer or market pressures (Zhu & Sarkis 2007).

In a developed economy such as the UK, the external pressure for international regulatory compliance continues to oblige successive governments to make sure that manufacturing organizations have a built-in design for the environmental requirements in their processes and operations (Hong et al 2009). Consequently, as noted by Holt and Ghobadian (2009), UK manufacturing firms are bound to comply with the stringent legislation that is already in place in other countries if they expect to import their products to these countries. In their study, Hsu et al (2013) underline that some of the compliance concerns “range from life cycle assessment of all products, reduction in material and energy consumption use and ensuring that packaging materials are not only reusable but also have a significant portion of recyclable contents.” For instance, while Hewlett-Packard (HP) initiated an environmental design program for producing energy-efficient, hazardous free and recyclable products, Dell Corporation initiated an environmental stewardship program for designing energy-efficient products and took a conscious step to enhance upgradeability, reuse, and recyclability (Hsu et al 2013).

Reverse Logistics

This concept places much attention on “closed-loop systems with an aim to reuse, recycle and remanufacture materials” (Hsu et al 2013, p. 660). Reverse logistics concerns the recovery of discarded products (cores), and may also entail packaging, shipping, and backhauling the discarded materials to a centralized location with the view to either recycling or remanufacturing; hence the technicalities of reverse logistics oblige substantial attention by logistics professionals. As acknowledged by Holt and Ghobadian (2009), most manufacturing firms operating in European Union member countries are required to deal with backhauls to handle the waste packaging in their warehouses, and also to effectively resolve customer satisfaction issues when dealing with the recoverable materials. According to Tan et al (2013), stiff competition for raw materials is forcing many organizations operating in the United States to internalize such practices at home. On their part, Hsu et al (2013, p. 661) note that “there is already a transportation packaging law in Germany that requires the manufacturers to take-back all the pallets, cardboard boxes, stretch and shrink and strapping used to protect the products during shipment.” In major European countries such as Germany and The Netherlands, firms are prohibited by law to process their electronics waste by undertaking to landfill or to ship such waste to regions where a landfilling is still allowed, hence the need for them to initialize and adopt reverse logistics.

A study by the Council of Logistics Management cited in Hsu et al (2013) reports that reverse logistics is affected by three fundamental concerns, namely the structure of the network, the planning for material flows, and the classification and routing of materials. An important characteristic that is used to identify the reverse flows is that the collection of materials from the marketplace is a “supply-driven flow” rather than a “demand-driven flow” as witnessed in a forward flow logistics paradigm, resulting in the creation of a great deal of uncertainty among stakeholders in regards to the quantity, timing and condition of items (Huang et al 2012a; Hsu et al 2013). In the UK, a substantial number of firms within the manufacturing sector are continuously involving their suppliers, service contractors, vendors, distributors, and end-users in minimizing or eliminating adverse environmental impacts of their manufacturing activities through reverse logistics in a focussed attempt aimed at greening their supply chains to sustain competitiveness in the global market (Lee et al 2012).

GSCM & Firm Competitiveness

Extant literature shows that organizations worldwide are increasingly attempting to initiate new and innovative ways to enhance their performance and competitiveness (Perotti et al 2012), with a substantial number of them adopting GSCM as an operational initiative geared towards “enhancing their competitiveness through improvements in their environmental performance to comply with mounting environmental regulations, to address the environmental concerns of their customers, and to mitigate the environmental impact of their production and service activities” (Rao & Holt 2005, p. 898). Although some studies have reported a positive relationship between a firm’s competitiveness and proactive environmental strategies in terms of green supply initiatives, others have reported negative correlations depending on the moderating factors applied by the researchers as well as the heterogeneity of environmental management strategies initiated by the firm and industry.

For instance, Zhu and Sarkis (2004) extensively cited in Zhu & Sarkis (2007, p. 4335) found that “GSCM practice has a positive relationship with environmental performance, positive economic performance, and negative economic performance.” According to the authors, positive economic performance (competitiveness) is defined as benefits obtained through GSCM (e.g., decrease of cost for materials purchasing, a decrease of cost for energy consumption, a decrease of fee for waste management, a decrease of fee for waste discharge and decrease of fine for environmental accidents), whereas negative economic performance is defined as increased investment and costs (e.g., increase of investment, increase of operational cost, an increase of training cost and increase of costs for purchasing environmentally friendly materials). In their study, Zhu and Sarkis (2007) found that if market pressures cause manufacturing firms to adopt green supply chain initiatives such as eco-design and green purchasing practices, the environmental performance of these organizations is better; however, economic performance tends to worsen when market pressures cause the implementation of eco-design practices.

Another study concluded that although the existence of competitive pressures does not cause manufacturing firms who implement green supply chain initiatives to enhance environmental performance, the existence of competitive and mimetic pressures through the implementation of green purchasing, internal environmental management, and investment recovery, do cause positive economic performance, hence triggering competitive advantage (Kim & Min 2011). Research by Green et al (2006) identified the adoption of green supply chain initiatives as a strategic initiative that improves a firm’s overall market orientation, performance, and capacity to satisfy customers. An empirical study conducted by Green et al (2012) found a positive correlation between green supply chain practices and firm competitiveness in manifest variables of improved efficiency, quality improvement, productivity improvement, and cost savings.

This study also found a positive relationship between green supply chain initiatives and organizational performance, especially in key areas of new market opportunities, product price increase, profit margin, sales, and market share. Their study concluded that “the adoption of GSCM practices by manufacturing organizations leads to improved environmental performance and economic performance, which in turn, positively impact operational performance and organizational efficiency” (p. 290). In their study measuring supply chain efficiency from a green perspective, Kim and Min (2011) found that green supply chain initiatives led to value addition and competitive advantage for countries focusing on manufacturing or logistics as these practices led to a substantial reduction in environmental degradation. This view is reinforced by Jensen et al (2013), who found that GSM practices facilitate value creation and competitiveness by transforming supply chain outputs primarily considered as “waste” in isolation of one firm’s perception into use-value when evaluated from a chain perspective.

Despite the findings illuminated above, it remains unclear whether green supply chain initiatives lead to increased organizational competitiveness, especially within the context of the UK’s manufacturing sector. Rao and Holt (2005) reveal that although frameworks for achieving competitive advantage through the managerial standards of customer satisfaction, employee empowerment, quality cost systems, lean manufacturing, continuous improvement, and productivity enhancements are well documented in the literature, these measures fail to reflect the impact of green supply chain initiatives towards the overall competitiveness of the organization. This, according to the authors, “is not really surprising since competitiveness primarily interfaces between the firm and the market, and as long as the market does not seek environmental value-drivers in the products and services it purchases, environmental issues are not necessarily considered by organizations and consumers” (p. 906).

In their interviews with operations and general managers of selected manufacturing firms in the UK, Holt and Ghobadian (2009) found that manufacturers facing greater environmentally focussed regulatory pressures, as well as stiff competition from peers, tend to allocate more financial resources for these environmental practices, hence diminishing their economic performance. The study by Perotti et al (2012) found that the adoption of green supply chain initiatives by firms is often done in a reactive rather than a proactive manner, and it does not seem to be hinged on the search for competitiveness based on eco-sustainability due to low customer and shareholder awareness of the possible benefits of GSCM. This particular study concludes that a better set of indicators is needed to measure the effects of green supply chain initiatives on firm competitiveness and performance.

GSCM & Image Development

Many organizations the world over continue to be pressured by international customers, particularly image-conscious multinational organizations, to enhance their environmental image and performance with the view to seeking a balance between social issues and market factors in determining long-term success (Carter 2005; Zhu & Sarkis 2007). Although economic and market performance has traditionally and continues to be, the priority for many manufacturing firms, environmental performance through the adoption of green supply chain initiatives are increasingly becoming important as a fundamental fulcrum in enhancing the firm’s image and reputation, hence increasing their competitiveness (Green et al 1998).

The study by Zhu and Sarkis (2007) found that green supply chain initiatives among Chinese manufacturers results in a better firm image and reputation among customers but may diminish organizational economic benefits when market pressures exist. Lee et al (2012) found that the adoption of environmentally friendly SCM practices, including internal environmental management, green purchasing, cooperation with customers, and eco-design, had a positive impact on the firm’s image and reputation as suggested by customers and other shareholders, employee job satisfaction, operational efficiency, relational efficiency as well as business performance. This study noted that the reinforcement of a firm’s image and reputation was predicated upon such factors as cost savings and cycle time reduction for customers, enhanced environmental quality for communities around the firm, and overall customer values as well as individual objectives and aspirations of employees working in GSCM-compliant organizations.

From the above analyzes, it is evident the sets of indicators and measurement models used to evaluate the relationship between the adoption of green supply chain practices and firm competitiveness and image development were developed and tested mostly in China and other Asian countries (e.g., Rao & Holt 2005; Zhu & Sarkis 2007; Kim & Min 2011; Jensen et al 2013). The contribution of this study is therefore significant in that it is one of a few empirical studies (e.g., Holt & Ghobadian 2009) that have refined the measurement items to purposively investigate how green supply practices influence firm competitiveness and image development in the UK’s manufacturing sector.

Conceptual Framework

Extant literature demonstrates that a conceptual framework refers to an image or symbolic representation of an abstract notion that is not only intended to illustrate the direction of the study, but also the relationships of the different constructs that the researcher aims to investigate in the research process (Sekaran 2006), with the view to (a) observing behaviors, circumstances, interactions and environments, (b) examining these observations for themes, patterns, and categories, and (c) providing solutions to the key research questions based on what can be synthesized from the study findings (Creswell 2002). Consequently, Balnoves and Caputi (2001) acknowledge that the conceptual framework is modeled around perceived or imagined interrelationships between the independent and dependent study variables.

Based on the objectives and key research questions of the present study, therefore, the adoption of green supply chain practices and initiatives by firms in the UK’s manufacturing sector is the independent variable, while firm competitiveness and image development are the dependent variables. It is important to note that while the independent variable underscores the factor which is measured, manipulated, or chosen by the researcher to determine its relationship to or association with, an observed phenomenon of interest, the dependent variable underscores the factor which is observed and measured by the researcher to determine the strength or effect of the independent variable (Creswell 2002). In the present study, GSCM practices and initiatives are antecedent or precursor factors that are acknowledged to either directly or indirectly influence firm competitiveness and image development.

Summary

From the analysis of the relevant literature, it is evident that although an increasing number of UK’s manufacturing firms are embracing the concept of GSCM to get more international business opportunities, cut down on costs by enhancing supply chain practices, increase productivity, and promote the environmental image, the link between green supply chain practices and improvements in competitive advantage and image development for these organizations remains unclear. As demonstrated in the literature review, many research initiatives are exemplifying greening practices in the supply chain and others evaluating the economic and business impacts of the environmental performance of the firm; however, only a few studies have empirically tested if the adoption of these practices is yet to be translated into improvements in critical spheres of competitiveness, image building and economic performance within the UK’s context. Additionally, although some studies have reported a positive relationship between a firm’s competitiveness and proactive environmental strategies in terms of green supply initiatives, others have reported negative correlations depending on the moderating factors applied by the researchers as well as the heterogeneity of environmental management strategies initiated by firm and industry.

This review has identified green purchasing, customer cooperation with environmental considerations, eco-design, reverse logistics, and investment recovery as important practices that could be adopted and implemented by firms not only to enhance their image but also to sustain competitiveness and performance. However, it is important to empirically test the extent that these practices influence the firm’s image and competitiveness in terms of overall market orientation, performance, and capacity to satisfy customers, as well as in other manifest variables such as improved efficiency, quality improvement, productivity improvement, cost savings, environmental friendship, and employee satisfaction. Consequently, collecting and analyzing data on how these variables influence firm image and competitiveness in the UK context is a necessary prerequisite to facilitating the adoption of green supply chain practices not only by UK firms but also globally. As acknowledged in a report by the United Nations Development Programme cited in Hafkin and Huyer (2007, p. 26), “without data there is no visibility; without visibility, there is no priority.” It is this understanding that provides the impetus for the next chapter, which aims to demonstrate the techniques, approaches, and methodologies used to collect relevant data used in empirically testing how green supply chain initiatives to influence firm competitiveness and image development within the UK’s manufacturing sector.

Methodology

Introduction

The present research seeks to critically investigate how firms within the UK’s manufacturing sector use green supply chain initiatives to build their image and improve competitiveness within the industry. This chapter aims to provide information on the methodologies, approaches, and strategies used to answer the main research aim and objectives, in addition to detailing the justifications for selecting these methodologies. In essence, the chapter discusses

1. the research paradigm,
2. research design,
3. population and sample,
4. data collection instruments,
5. ethical considerations,
6. reliability and validity, and
7. data analysis procedures.

Research Paradigm

Although extant literature shows that research paradigms are sets of practices and beliefs (Biel et al 2007), they are fundamentally characterized by ontological, epistemological, and methodological differences not only in their approaches but also in their contribution to evidence and knowledge base (Wahyuni 2012). Denzin and Lincoln (1994) comprehensively cited in Welford et al (2011, p. 38-39) “described six main paradigms: constructionism, interpretivism, feminism, positivism, post-positivism and critical theory.” Since the theoretical perspective or philosophical underpinning of any research study is mainly predicated upon the methodology in research questions and can encompass any of the mentioned research paradigms (Wahyuni 2012), this study employs a post-positivist paradigm to develop knowledge on the topic of interest through exploring cause-and-effect relationships as well as employing statistical measures in evaluating the variables or phenomena of interest (Bryman & Bell 2007). This paradigm provides the researcher with the capacity to not only segregate variables and causally link them to establish the extent and frequency of relationships between the adoption of green supply chain practices and firm competitiveness and image development (Sekaran 2006), but also to determine which variables of interest to investigate and which data collection instruments to use, resulting in highly reliable and valid scores (Creswell 2002). These justifications inform the selection of the post-positivist research paradigm.

Research Design

The present study, which is quantitative in approach, uses a descriptive research (survey research) design to critically evaluate how green supply chain initiatives to influence competitiveness and image development for organizations in the UK’s manufacturing sector. Extant literature shows that quantitative methods can employ three research designs – descriptive, correlational, and causal-comparative – to collect and gather numerical data obtained through formal instruments (Sekaran 2006), and that descriptive research involves not only identifying the unique characteristics of the phenomenon of interest in the study but also examining the situation as it is without changing or modifying it (Creswell 2002). The justifications for employing a descriptive research design in this study, therefore, are that (1) it allows the researcher to collect important information about the issues under investigation (green supply chain practices, firm competitiveness, and image development) by simply posing questions to participants and tabulating their responses, (2) it enables the researcher to learn about a large population (UK’s manufacturing sector) by surveying a sample of supply and/or production executives working in manufacturing organizations, and (3) the study subjects are only measured once (Phillips & Starwaski 2008).

Since descriptive research studies typically use face-to-face interviews, telephone interviews, or previously written and pretested questionnaire instruments to collect primary data from participants (Sekaran 2006), the present study uses an online questionnaire instrument (survey approach) requiring study participants to respond to a series of statements or questions about the phenomenon of interest through the self-report technique. While the self-report technique is justified for application in this study because it is easy to use, less costly to manage, and provides participants with the needed flexibility to respond to the questionnaire items at their pleasure (Bryman & Bell 2007), it nevertheless runs the risk of intentional data misrepresentation because some participants may only be interested in generating a favorable impression to the investigator rather than outlining the issues of interest as best known to them (Creswell 2002). To minimize this challenge, the researcher ensured that all participants were comprehensively briefed about the nature and purpose of the study before engagement, with the view to ensuring that they provided an accurate description of the observations of the phenomena.

Target Population & Sample

The target population for this study comprises supply and/or production managers of the UK’s manufacturing firms registered with the Chartered Institute of Purchasing and Supply (CIPS). Specifically, the study targets supply and/or production executives in six manufacturing industries dealing with petroleum products, automobile, pharmaceutical products, rubber and plastic, heavy plants and machinery, as well as computers and electronics. The justification for selecting these industries is predicated upon the fact that these industries have expansive supply chains, hence more likely to degrade the environment in the absence of green supply chain practices (Holt & Ghobadian 2009). It is imperative to note that the researcher uses an online CIPS database to identify a pool of firms in the six manufacturing sectors (petroleum, automobile, pharmaceuticals, rubber and plastic, heavy plants, and computers and electronics), before contacting the management to seek for participation.

Upon achieving approval for participation, the researcher employs a simple random sampling technique to select a sample of 96 firms representative of the six manufacturing industries, implying that 16 firms are selected for each specific industry. This technique is justifiable as it ensures every organization in the six manufacturing industries has an equal chance of selection (Balnoves & Caputi 2001). Purposive sampling is used to specifically select 192 supply, operations, and/or production executives in the 96 firms, implying that 2 executives are selected for participation per firm. Sekaran (2006) acknowledges that participants in a purposive sample are selected to take part in a study based on two underlying factors: (1) compatibility to the study aim and objectives, and (2) demonstrated a comprehensive understanding of the phenomena under investigation.

Consequently, the justification for using purposive sampling to select supply and production managers is based on (1) their interest in the subject matter, making it less likely for them to ask a junior member of staff with limited knowledge to complete the questionnaire, and (2) their knowledge in the subject matter reduces the likelihood of common method variance. The purposive sampling technique has a distinct advantage over other non-probability sampling techniques in this type of study because it enables the researcher to focus attention on individuals who share particular characteristics or possess unique knowledge in particular areas (Creswell, 2002). A major disadvantage is that most supply and production executives choose to join CIPS, and this may infer views and perceptions that are not widely shared in the population; however, a balanced sample drawn from among interested executives is preferable to a completely random sampling to overcome this challenge. The inclusion (eligibility) criteria for the study sample include the following dimensions:

• Demonstration of adequate knowledge of green supply chain practices;
• Executives must be 21 years or older;
• Executives may be of either gender
• Executives must have worked for their respective firms for a period not less than three years, and;
• Executives must demonstrate readiness and willingness to take part in the study.

Data Collection

The questionnaire is used in this study as the primary data collection instrument to identify the GSCM practices adopted in the upstream and downstream supply chain activities of the sampled manufacturing firms, and if these practices lead to competitive advantage and image development. The researcher adopts Zhu and Sarkis (2007) questionnaire consisting of five GSCM practice survey items (internal environmental management, green purchasing, eco-design, cooperation with customers and investment recovery) and three GSCM performance items (environmental, positive economic, and negative economic), to investigate how the adoption of green supply chain practices leads to firm competitiveness. A five-point Lickert-type scale (“1=not considering it”, “2=planning to consider it”, “3=considering it currently”, “4=carrying out to some degree”, and “5=carrying it out fully”) is used to measure the adoption of GSCM practices, while performance/competitive shifts are measured using a five-point scale (“1=not at all”, “2=a little bit”, “3=to some degree”, “4=relatively significant”, and “5=significant”). Five survey items consisting of self-evaluation items and open-ended items have been developed to measure GSCM adoption and image development.

The questionnaire, containing 22 survey items to measure GSCM adoption practices, 17 items to measure GSCM performance/competitive changes, and five items to measure image development, underwent pretesting before the commencement of the data collection exercise not only to assess the structure, length, and appropriateness of the questions used but also to ensure that it provides greater content validity upon exposure to participants in the field (Phillips & Stawarski 2008). The justification for selecting the questionnaire as the primary data collection is predicated upon the issues of cost-effectiveness when administered online (Bryman & Bell 2007), ease of application and adaptability (Sekaran 2006), capacity to guarantee the anonymity of participants, as well as the freedom to include unstructured items to pursue new information which might be unknown to the researcher (Creswell 2002).

Reliability & Validity

In any quantitative research, the reliability of the measurement tool (questionnaire) is of substantial importance as it acts to minimize errors associated with the use of defective or ineffective measurement parameters (Balnoves & Caputi 2001). Reliability, which fundamentally refers to the “exactness” or “correctness” of a measurement technique (Phillips & Starwaski 2008), is used to demonstrate that the same set of data would have been collected from the study field each time in repeat assessments of an identical variable or phenomenon of interest due to consistency of measurement (Sekaran 2006). In the present study, reliability of the measurement instrument has been achieved through (a) pilot-testing the instrument to correct inconsistencies, (b) ensuring that measures included in the instrument only capture data that demonstrate the relationship between adoption of GSCM practices and firm competitiveness and image development, (c) utilizing multiple indicators in the Ticket-type scale to ensure the collection of quality unabridged data, and (d) enhancing the range of measurements included in the questionnaire instrument (Creswell 2002; Sekaran 2006).

Validity in quantitative studies refers to the suitability, meaningfulness, and usefulness of the deductions, propositions, and conclusions arrived at by the investigator based on the primary data collected from the field (Creswell 2002). In this study, internal validity, which guarantees the soundness of an investigation, has been attained through (a) utilizing a wide spectrum of content rather than a constricted one, (b) employing appropriate sampling techniques (simple random and convenience) to meet the interests of the study, (c) collecting data that are relevant to the needs of the study, and (d) employing a validated and reliable data collection instrument (Sekaran 2006). External validity for the present study has been achieved by including adequate sample size (120 supply and production executives) to guarantee that the study results are easily generalized to other study contexts not only in the UK but also globally.

Ethical Considerations

Ethical concerns have been noted during the data collection exercise and addressed as they arose not only to ensure the protection of human subjects but also to guarantee the study conforms to the University’s codes, regulations, and approvals for a study of this nature and scope. Before the commencement of the data collection exercise, a letter seeking permission to collect data from the executives of the sampled firms was dispatched to the CEOs. Once approval was given, an informed consent form with comprehensive information regarding the nature and purpose of the study, along with a detailed description of the rights of participants (e.g., right to informed consent, right to withdraw from the research study, and right to privacy), was prepared and emailed to participants to enlighten them about the purpose of the data collection exercise as well as their rights in the interaction. Lastly, the researcher ensured the anonymity of participants by downloading the returned questionnaires, coding them, and storing the instruments in a password-protected user file.

Data analysis

Since the present study employs a descriptive research design to investigate how the adoption of GSCM practices influences firm competitiveness as well as image development in the UK’s manufacturing sector, SPSS for Windows (Statistical Package for Social Sciences, version 19) has been used to analyze the descriptive data for mean scores, standard deviations, frequencies, and cross-tabulations. The findings are largely interpreted using mean scores of independent and dependent variables, pie-charts, bar-graphs, and normal text, with the view to empirically test how the adoption of green supply chain initiatives impacts upon firm competitiveness and image development within the sector.

Results & Discussion

Introduction

The present study is hinged on the urgent need to investigate how the adoption of green supply initiatives by organizations within the UK’s manufacturing sector affects their competitive orientation and image development. Owing to the fact the UK’s manufacturing sector has been on a backward trend in terms of its contribution to the country’s GDP, it is imperative to empirically test how organizations within this sector can apply green supply chain practices not only to build their image at a national and international level but also to enhance their economic performance and competitiveness. Towards the realization of the study’s aim and specific objectives, a survey was conducted on a sample of 192 supply, operations, and/or production executives drawn from selected industries within the manufacturing sector. It is important to indicate that 104 dully completed questionnaires were returned to the researcher, representing a 54.2% response rate.

Statement of Results

The main highlights of the study findings are not only interesting but informative too, and could be validly and objectively applied by organizations to expand their competitive orientation and enhance their image in the eyes of national and international customers. An analysis of demographic data demonstrates that the mean age of the study participants is 33.6 years, and 68 (65.4%) of the executives are male. A substantial number (58.2%) have worked in their organizations for a period of between five and seven years, implying that they are knowledgeable in supply chain systems and the GSCM practices adopted by their respective firms. The specific industries (petroleum, automobile, pharmaceuticals, rubber and plastic, heavy plants, and computer and electronics) in the manufacturing sector have been equally represented.

Knowledge on the Adoption of GSCM Practices

All the 104 participants acknowledge that their respective firms have adopted GSCM practices, but provide various reasons for doing so. Upon analyzing the multiple responses provided by the participants, it is clear that 68 (65.4%) of the executives think that adoption is necessary to fulfill regulatory requirements from the government, while another 45 (43.3%) mention customer demands as the major force behind the adoption of GSCM practices. Four in every ten executives (41.2%) think their firms have adopted the initiatives due to supply chain partners’ demands. The rest of the distribution is presented in the figure below.

This figure demonstrates that the adoption of GSCM practices by organizations within the UK’s manufacturing sector is still a reactive process as demonstrated by the fact most executives feel that their respective firms adopt green supply chain initiatives due to regulatory pressures and customer/supply partner demands rather than to sustain competitiveness and enhance the image and reputation of the firm.

Descriptive statistics (means and standard deviations) are employed to demonstrate how participants rank the use of GSCM initiatives grouped into five broad GSCM practice factors, namely internal environmental management, green purchasing, eco-design, cooperation with customers, investment recovery and reverse logistics. From the analysis demonstrated in Table 1, it is evident that most manufacturing firms are either considering adopting various GSCM practices or carrying them out to some degree. However, it can be noted that the adoption of eco-design practices and cooperation with customers for eco-design, cleaner production, and green packaging is still lagging in terms of adoption. As demonstrated in the table, most firms have put in place measures to ensure internal environmental management, investment recovery, and reverse logistics, while a sizeable number are still considering implementing eco-design practices in their supply networks. Overall, the sampled participants demonstrate a good understanding of GSCM practices and the level of commitment of their respective organizations in adopting the initiatives, though the results vary, probably due to the level of investment allocated to the adoption of specific GSCM practices. The findings may also vary due to the driving factors for GSCM adoption as well as the priorities set by the respective manufacturing organizations.

Table 1: Descriptive Statistics for Adoption of GSCM Initiatives.

Overall, in internal environmental management, most firms practice senior/middle-level management support for the adoption of GSCM initiatives (x= 4.57), have environmental management programs already in place (x= 4.01), have ISO 14001 certification (x = 4.21), and undertake cross-functional cooperation for environmental enhancements (x= 4.47). A sizeable number (12.5%) are still considering adopting total quality environmental management, and 10 (9.6%) are yet to consider the adoption of eco-labeling of products as an internal environmental management strategy. In green purchasing practices, most of the sampled executives acknowledge that their firms cooperate with suppliers for environmental objectives (x = 4.71), conduct an environmental audit for suppliers’ internal management (x= 4.19), and undertakes second –tier supplier environmentally friendly practice evaluations (x= 4.02). However, 16 (15.4%) of the executives say their firms are in their initial planning stages to start requesting ISO 1400 certification from suppliers. The GSCM practice indicators for eco-design, cooperation with customers, investment recovery, and reverse logistics are included in Table 2.

Table 2: Descriptive Statistics for Eco-Design, Cooperation with Customers, Investment Recovery & Reverse Logistics Practice Indicators

The table above provides useful insights into how UK manufacturing executives are aware of the principles and initiatives of GSCM. While many firms are still planning to consider implementing cooperation with customers for cleaner production and cooperating with customers for green packaging, it is evident that many have already put in place measures for investment recovery (sale of scrap and used materials, sale of excess capital equipment), and design of products for reuse, recycle and recovery of material or parts. A substantial number of the manufacturing firms are considering the adoption of other green supply chain practices, including designing products for reduced consumption of materials/energy, designing products to avoid or reduce the use of hazardous products, cooperating with customers for eco-design, sale of excess inventories and materials, and reusing, recycling and remanufacturing materials.

Adoption of GSCM Practices & Firm Competitiveness

Descriptive statistics are again employed to demonstrate the perceptions of the sampled executives regarding the role of GSCM in spurring competitive advantage, as well as the potential trajectories used by organizations within the manufacturing sector to sustain competitiveness by adopting green supply chain practices. Overall, most of the sampled executives believe that the adoption of GSCM practices is relatively significant in achieving competitiveness by decreasing costs for materials purchasing, decreasing costs for energy consumption, decreasing the fee for waste discharge, increasing international business opportunities and customers, as well as improving efficiency, quality of products and productivity of employees. However, it is important to note that the descriptive means of the study findings show that many executives are cautious that some of the GSCM practices may reduce a firm’s competitiveness in terms of increase in investment costs, operational costs, and costs for purchasing environmentally friendly raw materials. In environmental performance, which is intrinsically related to firm competitiveness, many of the sampled executives think that GSCM practices are of relative significance in reducing air emissions, reducing solid wastes, decreasing the consumption of hazardous or toxic materials, and enhancing a firm’s environmental performance. The findings for GSCM performance/competitive indicators are illustrated in Table 3.

Table 3: Descriptive Statistics for GSCM Performance/Competitive Indicators.

According to these findings, the major reason why many manufacturing firms take a reactive rather than a proactive approach in the adoption of green supply chain initiatives may be grounded on the perception that these practices contribute significantly to the increase in investment costs, operational costs, training costs, and other costs related to the purchasing of environmentally friendly raw materials. Overall, however, the perceptions of executives as to the role and potential of GSCM practices in enhancing and sustaining firm competitiveness appear promising, in large part because most of the executives are aware of the obvious benefits that come with “greening” their supply chains.

Adoption of GSCM Practices & Image Development

The application of descriptive statistics to analyze data in this section reveals that senior executives believe the image and reputation of an organization can be enhanced by GSCM efforts. As illustrated in Table 4, the results show that most executives agree with the statements that GSCM practices result in environmental friendship, reduced lead-to-cycle time for customers, enhancement of environmental quality for customers, and improvement in employee satisfaction and retention.

Table 4: Descriptive Statistics for GSCM Image Development Indicators.

When asked the way forward regarding the adoption of green supply chain practices and firm competitiveness as well as image development, 28 (26.9%) of the executives believe the government should provide more incentives for the adoption of GSCM practices by waiving application fees for environmental accreditation, 21 (20.2%) believe their respective firms should allocate more resources to the adoption exercise, while 18 (17.3%) suggest that awareness programs should be carried out to educate customers on how to different firms that have adopted GSCM practices from those that have not. The rest of the distribution is demonstrated in the figure below.

From the above figure, it is clear that some of the most important issues that need to be addressed for increased GSCM practice adoption include: (1) getting more incentives from the government, (2) allocation of more resources toward the adoption of GSCM initiatives, (3) development of awareness programs for GSCM adoption, (4) increased integration of supply chain networks, and (5) increased partnerships between organizations in the adoption of GSCM practices. It is important to note that these issues will in the long enhance firm competitiveness and image development arising from the successful implementation of green supply chain initiatives.

Discussion

The findings of the present study addressed the objectives and key research questions in several ways. In exploring the degree to which UK’s manufacturing firms are aware of the principles and initiatives of GSCM, it is evident that most organizations have put in place measures to improve internal environmental management, investment recovery, and reverse logistics, and others are in the process of implementing eco-design practices in their supply networks. It is important to note that the implementation of these practices varies across industries due to diverse drivers for GSCM adoption. Extant literature demonstrates that such drivers include external stakeholder pressures, customer demands, top management commitment, organizational capabilities, a willingness by suppliers to participate in GSC initiatives, and government involvement (Lee 2008; Kim & Min 2011; Lee et al 2012).

The findings also provide useful insights into how supply, production, and operations managers within the UK’s manufacturing sector perceive fundamental green supply initiatives including cooperation with customers for cleaner production, cooperation with customers for green packaging, investment recovery, design of products for reuse, recycle and recovery of material or parts, design of products for reduced consumption of materials/energy, design of products to avoid or reduce the use of hazardous products, cooperation with customers for eco-design, and sale of excess inventories and materials. In their study, Zhu and Sarkis (2007) found that these GSCM practices can lead to improved organizational and environmental performance. An empirical study conducted by Green (2012) also found a positive association between the adoption of these practices and organizational competitiveness in manifest variables of improved efficiency, quality improvement, productivity improvement, cost savings, new market opportunities, and improvements in product price, profit margin, sales, and market share. Overall, however, it should be noted that the study findings demonstrate that firms within the UK’s manufacturing industry are yet to fully adopt GSCM practices within their supply chain networks, and appears to follow the trend cited by Zhu and Sarkis (2007), that market pressures and regulatory requirements cause the differential adoption of GSCM practices such as eco-design and green purchasing.

The findings of the present study sufficiently address the perceptions of senior management regarding the role of GSCM in spurring competitive advantage, along with the potential trajectories employed by firms within the UK’s manufacturing sector to sustain competitive advantage by adopting GSCM practices. An analysis of the findings shows that the adoption of environmentally friendly SCM practices has a positive impact on the organization’s competitive orientation, especially in manifest aspects such as reducing the cost for materials purchasing, minimizing the cost for energy expenditure, reducing the fee for waste management, reducing the fee for waste discharge, lessening fine for environmental disasters, increasing business opportunities, and improvements in efficiency, quality of products and productivity of employees. Zhu and Sarkis (2007) study found that organizations stand to improve their competitive advantage and economic performance in some of the mentioned areas by adopting GSCM practices. Similarly, Rao and Holt (2005) found that the implementation of green supply chain practices benefits the organization’s competitive orientation through increased cost savings, more business opportunities from environmentally-conscious supply chain partners and multinational corporations, enhanced efficiency, and marketing exposure and synergy among business partners and lead corporations.

In image development, available literature demonstrates that adoption of GSCM practices contributes significantly to the enhancement of a firms image and reputation not only in terms of employee job satisfaction, cycle time reduction for customers, and enhanced environmental quality for communities around the organization (Lee et al 2012) but also in terms of enhancement of overall customer values and individual objectives of employees working in GSCM-compliant organizations (Zhu & Sarkis 2007). The present study has come up with similar findings as results show that GSCM practices result in an enhanced image and reputation for the organization in the eyes of customers and other supply chain partners in terms of environmental friendship, reduced cycle time for customers, enhanced environmental quality for customers and communities as well as improved levels of employee satisfaction and retention.

The present study contributes significantly to the body of knowledge regarding GSCM practices and their potential organizational outcomes within the manufacturing sector. The study findings will assist organizations to integrate green practices such as internal environmental management, green purchasing, eco-design, cooperation with customers’ investment recovery, and reverse logistics to enhance their competitive orientation not only in manifest variables such as cost savings for materials purchasing, energy consumption, waste treatment, and waste discharge, but also in terms of achieving improved efficiency, quality improvement, productivity improvement, and increased international business opportunities and customers. Additionally, the findings will assist organizations to enhance their image and reputation by adopting and leveraging GSCM practices.

An important finding of the present study is that the adoption of green supply chain practices by organizations within the UK’s manufacturing sector is largely a reactive process as demonstrated by the fact most executives feel that their respective firms adopt green supply chain initiatives due to regulatory pressures and customer/supply partner demands rather than to sustain competitiveness and enhance the image and reputation of the firm. This finding may be attributed to the fact most firms experience cost increases in investment, operations, and training in adopting GSCM practices. Other organizations cite the increase of costs for purchasing environmentally friendly materials as a major hindrance to the adoption of GSCM practices. In the literature, a study by Perotti et al (2012) concluded that the adoption of GSCM initiatives by organizations is often done in a reactive rather than a proactive manner, and it does not seem to be grounded on the search for competitiveness based on eco-sustainability due to low customer and shareholder awareness of the possible benefits of GSCM.

Ultimately, it is therefore important for interested stakeholders to develop strategies and approaches that will enhance the adoption of GSCM practices in organizations, to sustain a competitive orientation and maintain a reputable image to get more business opportunities from customers and other supply chain partners (Holt & Ghobadian 2009; Hu & Hsu 2010). In this regard, the present study finds that not only should the government provide more incentives to organizations in terms of waiving fees for environmental accreditation, but the organizations themselves should allocate more resources toward GSCM practices, and the relevant stakeholders should also develop awareness programs to empower customers in differentiating organizations that have fully integrated GSCM practices from those that have not.

Conclusions & Recommendations

Summary

The present quantitative study, utilizing a descriptive research descriptive, is grounded on the urgent need to empirically test how the adoption of GSCM practices by organizations within the UK’s manufacturing sector affects their competitiveness and image in the eyes of national and internal customers, as well as other supply chain partners. This study has been informed by two underlying issues. The first issue relates to the fact that despite the proliferation of hundreds of scholarly papers detailing the integration of environmental concerns within the supply chain management (Sarkis 2012), extant knowledge on how GSCM practices can be used to enhance competitiveness and build the firm image remains highly fragmented, especially within the manufacturing sector (Zhu et al 2010; Lee et al 2012). The second issue relates to the fact that in recent years, the UK’s manufacturing sector has been on a descending trend in terms of its contribution to the country’s GDP (Hutton 2012), hence the need to undertake a study investigating how the sector can promote their image and competitiveness through the adoption of GSCM practices.

Several conclusions can be drawn from the study findings. First, most firms within the UK’s manufacturing sector employ a reactive approach to adopt GSCM practices. Indeed, it has been demonstrated that most organizations invest in the initiatives due to regulatory and customer/supplier chain pressures rather than to sustain their economic performance and competitiveness. This view is consistent with a previous finding by Perotti et al (2012), who concluded that the adoption of GSCM practices is not grounded on the search for competitive advantage based on eco-sustainability due to low customer and shareholder awareness of the possible benefits of the initiatives.

The second conclusion is that most manufacturing firms in the UK are aware of GSCM practices and employ the initiatives in varying degrees in line with the drivers or factors that are informing the adoption process. Extant literature demonstrates that such drivers include external stakeholder pressures, customer demands, top management commitment, organizational capabilities, a willingness by suppliers to participate in GSC initiatives, and government involvement (Lee 2008; Kim & Min 2011; Lee et al 2012).

The third conclusion is that most organizations within the UK’s manufacturing sector have put in place measures to improve internal environmental management, investment recovery, and reverse logistics, though the implementation of specific factors of eco-design and green purchasing is still lagging. The findings of this study demonstrate that the delay of specific GSCM practices such as eco-design and green purchasing can be attributed to high investment operations and training costs, as well as other costs related to the purchasing of environmentally friendly materials.

The fourth conclusion is that senior managers are aware of the role of GSCM practices in spurring competitive advantage. Competitiveness, according to them, can be achieved through decreasing the cost for materials purchasing, decreasing costs for energy consumption, decreasing the fee for waste management, decreasing the fee for waste discharge, increasing national and international business opportunities, improving operational efficiency, enhancing the quality of products, and improving employee productivity. Other previous studies (e.g., Rao & Holt 2005; Zhu & Sarkis 2007) had found similar findings.

The fifth conclusion is that GSCM practices contribute substantially to the enhancement of an organization’s image and reputation in terms of environmental friendship, reduced cycle time for customers, enhanced environmental quality for customers and communities, and improved levels of employee satisfaction and retention. Zhu and Sarkis (2007) and Lee et al (2012) had also found similar findings while investigating firms for GSCM adoption in the South Asian context, implying that these benefits can also be replicated across manufacturing organizations in the UK.

Apart from these key findings, the present study makes an important contribution to the extant literature on GSCM practices by linking the adoption of green supply chain initiatives to the firm’s competitive orientation and image development. Many of the existing studies (e.g. Hong et al 2009; Hu & Hsu 2010; Huang et al 2012b; Hsu et al 2013) have attempted to investigate GSCM adoption and performance indicators in the Asian context, particularly in China. However, the present study uses the UK context to empirically test how GSCM practices influence firm competitiveness and image development. In this regard, the study has highlighted several issues that should be addressed for UK-based organizations to increase their uptake of GSCM practices, hence leverage their competitive advantage. The most important issues include (1) involvement by the government in the provision of more incentives such as waiving the fees required for environmental accreditation, (2) allocation of more resources by organizations to enhance the adoption of GSCM practices, and (3) development of awareness programs to empower customers in not only differentiating organizations that have fully integrated GSCM practices from those that have not, but also understanding the immense benefits that can be achieved through the adoption of the practices.

Recommendations and Implications for Practice

Based on the key study findings, it is recommended that stakeholders and government agencies should come together to develop a policy framework that would enhance the adoption of GSCM practices for firms to achieve competitive advantage rather as a reactive means to meet the regulatory requirements and customer and/or supplier partners’ demands. Such a framework must address the issues raised by participants as to why more organizations are hesitant to adopt GSCM practices. For example, the framework should include strategies that could be used by organizations to lower their investment, operational, and training costs while adopting GSCM practices.

The study also recommends the waiving of environmental accreditation fees charged by various government agencies so that more firms can broaden their scope in the adoption of GSCM practices. From the findings, it is evident that GSCM practices bring to the organization immense competitive benefits that, if properly tapped, will not improve the economic performance of the firms and the country’s GDP, but also reduce environmental degradation and enhance the quality of life for communities living around the manufacturing firms.

Lastly, government agencies and interested stakeholders should develop awareness programs targeted at enlightening the customers about the important benefits related to GSCM adoption. This way, customers will buy more from firms that have fully integrated green practices into their supply chains, hence not only enhancing their competitiveness and reputation but also ensuring a safer and cleaner environment for communities that are near the manufacturing organizations.

This study implies that GSCM experiences among UK’s manufacturing organizations show that reactive pressures, especially government regulations and customer demands, are the main force behind the adoption of GSCM practices. This orientation needs to change by encouraging organizations to adopt GSCM practices so that they may increasingly leverage their competitive advantage through decreasing the cost for materials purchasing, decreasing costs for energy consumption, decreasing the fee for waste management, decreasing the fee for waste discharge, increasing national and international business opportunities, improving operational efficiency, enhancing the quality of products, and improving employee productivity. Another implication of this study is that GSCM experiences among UK manufacturing firms can be disseminated to other manufacturers in developing countries not only to enhance their competitiveness in the above-mentioned areas but also to improve their image and reputation, hence gain more business opportunities from environmentally-conscious multinational corporations.

Study Limitations

The present study has been limited by financial constraints and time resources, not only obliging the researcher to use a small sample size but also to use online protocols to collect data. Consequently, it may be difficult to generalize the study findings to a larger population of manufacturing organizations in the UK or even abroad because of the researcher’s 104 executives from six manufacturing industries. Upon reflection, it is felt that a larger survey with a larger set of responses would have provided more representative findings which can then be generalized to a larger population. Additionally, upon reflection, it is felt that one-on-one interactions with the study participants would have resulted in data that are rich in context as opposed to the use of online questionnaires to collect data.

Future Research Directions

Although the present study has empirically tested how the adoption of GSCM practices affects the image and competitiveness of organizations within the UK’s manufacturing sector, an investigation of this relationship requiring further data acquisition and theoretical justification is warranted. Consequently, future research can attempt to use more objective data and theories of competition to empirically measure how the adoption of GSCM practices affects the competitive advantage of manufacturing organizations in manifest variables such as share price, market share, and return on assets, and if this relationship is affected by firm size or type of industry within the manufacturing sector. It is important to mention that future studies must be broad-based so that findings are not only more representative but can also be generalized to a wider population.

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In recent years, researchers and human resource practitioners have taken an interest in examining ways to enhance employees’ performance through engagement. The link between genuine engagement and outstanding work performance is evident, for engagement is characterized by an individual’s investment and proactive behavior in the workplace. It is crucial to identify the factors that predict engagement both on the individual and organizational levels. In their study “Is competition engaging? Examining the interactive effects of goal orientation and competitive work environment on engagement”, Jones, Davis, and Thomas investigated the said contributors’ impact on employees’ involvement.

Seeking to establish a correlation between the presence of the said factors and the level of engagement, the authors put forward some hypotheses. They assumed that learning and proving goal orientation, in which an individual finds gratification in finessing their skills and in demonstrating competence respectively, enhances engagement (Jones et al., 2017, p. 393). On the contrary, avoidant employees that approach tasks with apprehension are less engaged (Jones et al., 2017, p. 393). The authors speculated that a competitive work environment has the potential to balance out both learning proving goal orientation and engagement; however, the effect is likely to be prominent solely in highly competitive environments (Jones et al., 2017, p. 395). Thus, the study reasoned that the impact of competitiveness should be investigated in conjunction with individual predispositions.

As for the research design, the authors elaborated a survey comprised of three scales on engagement, competitive work environment, and goal orientation. The item count of each scale varied from 12 to 20; response options ranged from 1 for “strongly disagree” to 7 for “strongly agree” (Jones et al., 2017, p. 396). The number of participants was 440, all of them older than 21 and with work experience of two years or more (Jones et al., 2017, p. 396). The researchers took into account whether a participant had supervisory responsibilities and the length of time that they had been in the current position (Jones et al., 2017, p. 397). A possible study’s limitation was that a considerable share of the data drawn is subjective and perceptual.

In conclusion, the authors acknowledged the potential of competitive environments to be engaging; however, they attributed a more significant role to individual dispositions toward competition. As the results showed, the participants low in learning and proving orientations act less engaged, when put in a competitive work environment (Jones et al., 2017, p. 400). Their counterparts that prioritize learning skills and proving their competence show more engagement (Jones et al., 2017, p. 400). However, the connection to competitiveness is not explicit as their motivation may be extrinsic, i.e., may not depend on external factors such as competition in the workplace.

The study’s implications may be put to use by human resources practitioners as part of strategic management. Firstly, the study brings one to perceive engagement as a complex phenomenon that provides a company with a competitive advantage. The importance of engagement was emphasized in a 2015 survey by Albrecht et al., in which they concluded that HR practitioners need to prioritize engagement in policies and practices, e.g., internal environment assessment. The claim finds support in a 2014 study by Kuratko, Hornsby, and Covin, who introduced five specific dimensions that determine a work environment conducive to entrepreneurial behavior (39). Engagement is attained through rewards and reinforcements and contributes to achieving the organization’s strategic plan (Kuratko et al., 2013, p. 39). All in all, increasing and maintaining employees’ engagement is an indispensable part of strategic management.

The term engagement has strongly resonated with academics, business executives, and human resource practitioners throughout recent years. It became clear that for an employee, it takes more than merely fulfilling responsibilities to contribute to achieving goals set by the company. The question arose as to what characteristics a work environment needs to possess to be engaging. Jones et al. argued that individual predispositions determine the reaction to competitiveness and predict engagement. The individualism of working styles and attitudes calls for environmental assessment and wisely embedded engaging practices, which a viable business strategy should encompass.

References

Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage. An integrated approach. Journal of Organizational effectiveness, 2(1), 7‐35.

Jones, J. L., Davis, W. D., & Thomas, C. H. Is competition engaging? Examining the effects of goal orientation and competitive work environment on engagement. Human Resource Management, 56(3), 389–405.

Kuratko, D. F., Hornsby, J. S., & Covin, J. G. (2014). Diagnosing a firm’s internal environment for corporate entrepreneurship. Business Horizons, 57(1), 37-47.

Introduction

The current era is the era of growth. It is the era of globalization. The world is growing shorter and closer with organizations stepping out of the boundaries of their home countries spreading all around the world. Business means so much more than what it did just some decades ago and it’s getting harder and harder to compete and maintain the market share in this ever-evolving market. Hence, a competitive strategy is essential for industries in this modern world. Keeping in mind Porter’s Competitiveness Theory, the USAID (US Agency for International Development) aspires to create and provide the developing countries the competitive strategies for its various industries to help them become competitive in their respective areas and prosper in the national as well as the international market.

Competitiveness

Competitiveness can be defined in terms of two different levels. Firm Competitiveness refers to the position of a particular firm in the market within the related industry. The better the firm performs, the bigger the competitive advantage it has and the more it can differentiate its product from those of the competitors, the more are the chances for it to succeed in the market and sustain its market share. Industry competitiveness on the other hand is much more complex. It has to deal with many other socio-economic factors interacting much more dynamically. It depends upon the ability of the firms to meet the demands of their customers, to analyze and utilize the end-market opportunities, and to cope with the ever-changing market trends and demand. As globalization has progressed, it has become important for firms to reduce rivalry and come closer to work together in order to grab a better and bigger market share in the international market. They need to enhance the product and mold it according to the market demands. They need to improve upon product differentiation, branding, etc if they wish to prosper and maintain their status in the market.

Competitiveness Strategy

In order to achieve competitiveness, there are various paths that one can follow. The USAID recommends the Value chain approach in order to help firms achieve competitiveness in this world of globalization. This approach has been developed by the AID after ten years of practice and research in the areas like global value chains and MSE development. It is a cyclical series of steps that industries should follow to get competitive in their respective fields. These steps include “Value Chain Selection”, “Value Chain Analysis”, “Competitiveness Strategy”, “Design & Implementation”, and “Monitoring & Evaluation”. Among these stages, the development and implementation of a proper competitive strategy is the most important step, since it marks the direction of the industry’s decisions. When it comes to small firms, they can not really contribute towards the competitiveness of every single industry, but there are many industries in which the MSEs (Micro, small & medium enterprises) contribute towards a very large chunk of competitiveness. Such industries include tourism, garments, construction industries, etc.

According to USAID, first, the industry should work with a limited number of firms, as it did in the case of the GMED project in India. This helps in evaluating the potentials of the industry, helping it take off in the right direction and develop the trust of the stakeholders and various actors in the whole chain. Then, all other firms may gradually be included later on to induce competitiveness in the industry as a whole. This way, the firms are able to see each other as being much more than mere competitors and they involve in joint activities and collaborative ventures those benefits all in the longer run.

Importance of Competitiveness Strategy

The implementation of the competitive strategy is very highly important in today’s world for a number of reasons. The most important and prominent reason is the one mentioned above; that is, it helps the firms to see each other as something other than mere competitors because this phenomenon hinders the firms’ ability to help each other and work together in the global environment. It helps the firms to look at each other as partners in the field opting for and working towards the same goals and working for the prosperity of the whole industry overcoming various mutual barriers and working to solve the common problems that they share in their respective fields.

Moreover, a good competitive strategy promotes inter-firm cooperation, helps resolve common problems and provides mutually benefiting incentives. It promotes an air of unity and equality across the industry and helps reduce rivalry inducing healthy and positive competition to do better.

Components of Competitiveness Strategy

According to USAID, there are three components of the Competitiveness Strategy that should be implemented accordingly to reap as many benefits out of the strategy as possible. These components include:

End Market Competitiveness

This component involves three steps in order to achieve end market competitiveness, they are:

• Determining where to compete: it is highly important for an industry to know its end market, that is, the customers it is catering to at the end of the supply chain, what they want, what they need and what they demand, no matter at which point of the supply chain the company lies. The industry needs to analyze their market and their demands and then develop or alter their product accordingly in order to achieve competitiveness.
• Determining how to compete: there are various ways or areas on the basis of which firms in any particular industry can compete. They can compete on the basis of product differentiation providing something very different in their product than that of the competitors and positioning their product according to that unique selling proposition (USP). They can also compare on the basis of efficiency delivering their products distinctively quicker than the completion. Moreover, the firms may also compete through market focus targeting narrower target markets or niche markets in order to establish a competitive market share.
• Determining the Products and operational characteristics required to compete: when the target market is decided and focused upon, then the product and operations should be altered according to the demands and expectations of that particular target market to achieve customer satisfaction, retain the market share and induce brand loyalty.

Upgrading Requirements

Once the target market is decided and the approach to compete (differentiation, efficiency, etc) is strategized, the infrastructure needs to be looked upon for any required changes that might be necessary in order to produce the desired product.

Plan for Sustaining Competitiveness

Finally, a solid plan needs to be made in order to sustain the competitiveness hence achieved. For that, a separate strategy needs to be made keeping in mind the various factors like customer preferences, changing market trends, evolving customer base, changing customer demands, etc.

Conclusion

This value-chain competitive strategy took 10 years to develop through constant practice and research of USAID professionals and it surely is a great source for the industries in the developing countries to take help from in order to achieve competitiveness and sustain it over a considerable period of time.

References

Cope B., Brown R. (2002). Value chain clustering in regional publishing services markets‎. Press City.

Hoskisson r. (2008). Strategic management – concepts and cases: competitiveness and globalization‎. Cengage Learning.

Humphrey J., Shmitz H. (2000). Governance and Upgrading: Linking Industrial Cluster and Global Value Chain Research. biblioteca.fstandardbank.edu.ar. 2009.

Kaplinsky R. (2001). Globalization and Unequalisation: What can be learned from Value Chain Analysis. Globalization and trade: implications for exports from marginalized economies. Page 117. 2009. Web.

Lee K., Kuo M., Huang W., Lin S. (2001). Competitiveness Model of the International DISTRI-PARK using the Virtual Value Chain Analysis. Journal of The Eastern Asia Society for Transportation. 2009.

Nabi I., Luthria M. (2002). Building competitive firms: incentives and capabilities. The World Bank.

The article “Managing Employee Retention as a Strategy for Increasing Organizational Competitiveness” by Sunil Ramlall focuses on employee turnover understanding based on surveys, interviews, and observations. The first issue I have learned from this article is that several potential factors may force an employee to leave their work. Among the key reasons, it is possible to note low salary, a lack of promotion opportunities, and the inability to develop one’s career. The interviewed employees also noted the location of a company or an organization as a significant factor affecting their decision to change their job. Most importantly, I have discovered that a lack of job security and organizational culture were marked as the options making people leave their workplace. Ineffective management and failure to establish teamwork decrease employees’ job satisfaction. These factors make employees look for other positions in the labor market.

Another issue I have learned from the given article is associated with employee retention strategies. First, the article makes it apparent that employee turnover reduction requires essential investment. Second, since the respondents selected a company location more frequently than other factors, it becomes evident that organizations should give preference to those people who live nearby to ensure their workplace satisfaction and build long-term relationships. I have also learned that employees value the opportunity to grow both personally and professionally. To promote this growth, organizations should offer relevant training, courses, and any other tools to help employees to accomplish their career goals. At this point, it is also critical to ensure that employees comprehend their duties and responsibilities. Taken together, the mentioned strategies are likely to significantly decrease employee turnover rates.

Financial planning enables the firm to attain the already set objectives as well as allowing a smooth flow of operations within the firm. For a firm to effectively strategize itself in the market, a well-coordinated and controlled financial plan should be put in place. The plan comprises various processes which include the preparation of financial statements, debt strategy, investments and budgeting. For a firm to effectively utilize the tool in ensuring competitiveness, qualified and competent personnel should coordinate the various processes. This paper seeks to analyze the role of financial planning and leverage use in enhancing competitiveness in the market.

The role of financial planning is to ensure efficient utilization of the available resources towards the attainment of the firm’s objectives. The financial planning, therefore, assists the firm to have a predetermined plan on how to utilize the available resources and gives directions on how the operations of the investment should be undertaken. In addition, it establishes control measures that are aimed at checking the viability of the undertakings (Warren & Reeve, 2007, p.933). For instance, the preparation of financial statements calls for accountability within the firms. This is more so since the accounting records require supportive documents such as receipts. The financial statements evaluation assists the firm to determine the most profitable area which further leads to specialization. Through specialization, the firm directs more of its resources in the area in which it has a comparative advantage over the others. The move, therefore, enhances competitiveness in the market.

Financial leverage is the use of external resources by the firm in its expansion process. The leveraging process thus increases the financial capacity of a firm enhancing it to maintain its productions and competitiveness in the market (Helfert, 2001, p.203). A firm can effectively use external borrowings in purchasing capital items which it could not afford otherwise. The capital investments, therefore, enhance quality and mass production within a firm which lowers the overall production costs of the firm. Due to the reduced production cost, the firm can opt to lower the prices of its products slightly below other firms in the same industry. The low price offered in the market will trigger a similar reaction to the other firms as each try to win a bigger share in the market.

A firm should target both internal and external resources when establishing its financial plan. The internal resources, if adequate, are the best to use since they have fewer conditions attached to them. In an actual sense, the internally generated amount attracts very little interest and its repayment period is usually longer. On the other hand, the external resources charge higher interest rates on the advanced principal amount. The amount is also bound to be repaid within a shorter time. However, the firm can expand and increase its market share using the two resources. If properly planned, the firm can advance its productions from a small scale to a large scale and thus enhance its competitiveness in the market.

Financial planning not only coordinates the firm’s financial operations but also enhances competitiveness in the market. This is because an excellent financial plan can enhance continuous growth in a firm. Financial leverage can also be used by the firm to ensure that it gains a comparative advantage in the market. The use of leverage finances to purchase mass production machines can be used to lower the production costs and also increase the production volume in a given firm. The low production cost can translate to better products marketing in the firm.

References

Helfert, E.A. (2001). Financial analysis: tools and techniques: a guide for managers. New York, McGraw-Hill Companies. Web.

Warren, C.S. & Reeve, J. M. (2007). Financial & Managerial Accounting. Boulevard, Rob Dewey. Web.