Introduction
Throughout the 20th century, a focus on organizational change in both production and management processes became one of the most important aspects of debate and research in the field of organizational management. The term “organization” was used to refer to the process of coordinating and integrating the factors of production (Hatch 2004, p. 46).
Specific attention was being paid to aspects of people, materials, management, and machines with a view of fulfilling the objectives of an organization. From this perspective, organizational change and organizational dynamics became some of the most studied and debated topics in management science. According to Collins (2004, p. 146), organizational dynamics and continuity are important aspects of modern organizations because they attempt to fit in their business environments. However, it is worth noting that dynamism in modern organizations has both positive and negative impacts, despite the much-acclaimed necessity for dynamism in organizations. Moreover, it is evident that organizational management plays an important role in determining the results of a dynamic organizational change. Arguably, organizational dynamism is one of the most critical needs of a company in a dynamic and unpredicted business environment. However, it is also a factor that may cause the negative performance of an organization if adequate management skills are not applied.
The world is increasingly becoming competitive with advancing technology and increasing globalization. According to Daft (2009, p. 89), firms are forced to find ways in which they can manage this kind of competition in order to remain relevant in the market. Changes in the external environment are taking place at unprecedented rates, with various players coming up with new approaches to handling various activities in the market. This is in an attempt to gain a competitive advantage in this market. However, Hommel (2012, p. 79) says that in the current marketplace, a permanent competitive advantage no longer exists. What a firm may consider as a competitive advantage today may be a potential source of weakness in tomorrow’s market, depending on the nature of changes taking place in the market. This means that firms must constantly be ready to change with the changing environmental factors. This would include changing their strategies in order to gain new competitive advantages to suite the changing patterns in the market.
Dynamism in business has been experienced for a long time due to the constant evolution in technology and the way of life of humankind. Market factors have constantly been changing, especially since the 20th century when technology started playing an important role in business operations. According to Kodama (2008, p. 67), there are different factors of dynamism that have a direct impact on the operations of a business unit. Technology is one of the leading factors of dynamism in business operations today. The emerging technologies have redefined the way business units operate in the market. Firms are forced to adopt these emerging technologies at a rate that is fast enough to gain some competitive advantage from them. Several firms, including Eastman Kodak, have lost their lead in the market due to their inability to use the emerging technologies to enhance their innovativeness. Another factor that has been very important in defining how successful a firm can be in the market is the management of employees within the firm. Employees are the most important asset within an organization. The success of a firm will always depend on how the employees perform duties assigned to them in the market. In the current world, it is important for the management to appreciate that employees are also changing with the emerging trends witnessed in the globalized society.
Agility is what many scholars have identified as the solution for firms in the current competitive market. According to Andrzej and Buchaman (2007, p. 69), agility is defined as “The ability of a [system] to rapidly respond to change by adapting its initial stable configuration.” Several other sources have defined agility is different ways, but one factor that comes out clearly is that agility involves the ability of an individual or organization to respond to changes fast and in an efficient manner. The ability of an organization to change rapidly will demand that such an organization has a system through which it would detect these changes as soon as they occur. The system should also be able to determine the best approach to take in adapting to such change. This is because not all changes are relevant. There are other changes that are disruptive in nature. For this reason, it is important for a firm to determine the best approach to take in adapting to these changes. In this view, the current discussion will examine the factors that create dynamism in organizations. It will also examine the impact of the organizational dynamic on organizational productivity, the relationship between innovation, and organizational dynamism.
Statement of the problem
Organizational dynamics affect organizational productivity, in areas such as policies, procedures, as well as programs. Organizational dynamics used to be linked to organizational change which literally is a strategic approach to change procedures, policies, and programs. These changes affect positively or negatively the employee’s performance based on the response to the change. On the other hand, employees affect the organization through their efficiency and effectiveness. Every organization wants the interface between the organization and its employees to yield increased productivity and profitability to the organization (Jassowski, 2012).
Recent reports have indicated that several large organizations may be faced out of the market because of their inability to manage change in the environment. Several other companies have fallen, some of which were considered too big to fall, such as the Lehman Brothers. Other large firms such as Eastman Kodak had to be rescued by financial institutions such as Citibank in order to remain operational in the market. Scholars have undertaken to discover some of the reasons why such firms once thought to be too big to be shaken by their competitors or other forces in the market have curved into dynamism in the market. Similarly, business start-ups around the world rarely celebrate their fifth anniversaries. In some cases, these business start-ups fail in their first year in operations.
Several scholars have stated that the main reason for this failure is organizational dynamics which have a direct impact on the productivity of firms. These dynamics may have a negative impact on the employees or the processes within the plant. For the employees, these dynamics may render their skills and experience needless within the organization. The dynamics may also disrupt the normal operations of firms in this market. For this reason, there is a need to find a way through which firms can manage these changes which take place in the market in order to be able to respond to them. When responding to these changes, speed is of value to the firm. Several scholars have indicated that agility may be the only solution through which firms can survive the environmental dynamism. It is through this that they can avert the possible failure and premature departure from the market.
Purpose of the study
The study aims at examining the different factors that create a dynamic organization and the possible linkages with other organizational factors such as productivity based on proper innovations. This way, it would be possible to offer to advise firms on how to deal with dynamic factors in the market where they operate. This research has specific objectives that the researcher seeks to achieve upon completing this research. The following are the specific objectives for this research.
- To examine different factors that create dynamism in organizations and how they affect productivity within such organizations.
- To provide a new definition of an organization from the perspective of employees, and how this may influence organizational productivity.
- To lay down clear mechanism that organization can use in order to manage the changing environmental factors, and how agility can be incorporated in organizational strategy.
The above are some of the specific aims of the researcher. The researcher hopes that this piece of research will help transform clumsy organizations in the market to firms that are able to respond to environmental changes with speed and accuracy.This way, Schneider Electric will be able to have sustainable business units in the market. They will be able to sustain the pressure that has been emanating from multinational firms operating in various regions around the world. They will be able to view globalization as a tool for success and not a hindrance to their prosperity.
What is the organization Dynamics
In management science, modern organizations find themselves in changing business environments that require application of managerial skills that will ensure an organization survives the waves of a rapidly changing environment. In fact, it has been asserted that almost every aspect of modern business environment is changing every day (D’Aveni 2006). Therefore, organizations have to adopt certain strategies to ensure that they cope up with these changes and more importantly, maintain their performance. Adapting to such an environment is a critical task that every manager must consider.
Modern theories in scientific management assert that dynamism is an inherent aspect of contemporary organizations. So, what is organizational dynamics?. According to Rogers (2006, p. 59), ‘Organizational Dynamics’ is a relatively new term in management science that has been applied in reference to patterns of movement over time within the interactions between an organization and its factors of production, the environment as well as its practice. Rogers (2006, p. 62) further argues that such patterns are also the regular patterns of conformity and dependence or patterns of noncompliance and aggression.
Business environment has been experiencing changes in various factors that constitutes it. According to D’Aveni (1995, p. 78), the changing environmental factors are majorly attributed to the changes taking place in the field of technology. Technology is redefining various environmental factors. The world has been reduced into a small global village thanks to technology. It is through advancement in transport and communication technologies that the world has been reduced into a small village. Business units can operate globally thanks to the advancements in the two sectors.
A logistics manager can trace movement of products from their manufacturing plants in China, through United Arab Emirates into Saudi Arabia because of this technology. With advanced communication, it is possible for an operational manager to manage various activities within the firm while miles away. These changes have direct impact on the operations of business units. This is what scholars and social scientists have described as dynamism in the field of business.
Daft (2009, p. 82) describes organizational dynamics as the changes in business environment of a firm that may have direct impact on the normal operations of a firm. This scholar says that a firm should be able to deal with organizational dynamics in a manner that would help a firm avoid any negative impact that may result from these changes. Change is a factor that a business unit cannot avoid. It will always come in the normal running of a business unit. However, it is a fact that most organizations may find it very challenging to adopt to the changes in the environment. Some of the environmental changes may be very complex to implement, especially when it involves massive disruption of the normal operations of a firm. These dynamisms play an important role in the evolution of firms in the market. For a firm to be able to manage these dynamisms, it should try to embrace flexibility as part of its strategies of remaining competitive in the market.
Changes that take place in the business environment are always focused on making business units operate more efficiently, and therefore, become more competitive in the market. However, Doucet (2011, p. 79) says that not every changes that come into business environment is a positive change. Technology has helped firms operate in a more efficient manner, but the same technology can lead to a downfall of a firm. Given that market competition has gotten very high, competitors are always willing to apply any mechanism to bring down their competitors.
Some of the strategies may be very unethical. The solution to such unethical practices has always been the same technology that has positively transformed business world. Cobb (2011, p. 114) says that a competitor may come with a technological invention that is meant to convince its rivals to use for their own peril. They use such technologies as bait to trap their competitors. This has made the process of adopting the emerging trends in the market very complex for business units. It is complex because before a firm can embrace a given trend, a thorough analysis of the trend must be analyzed in order to determine whether it is viable or not.
According to Grantham (2007, p. 67), the only way through which a firm can manage dynamism within an organization is to develop a positive attitude towards it. Change may not be easily accepted by various players because it always comes at a cost. However, it is a reality that a firm cannot run away from. Embracing dynamism is the best way through which a firm can succeed in the current competitive market. It order to achieve this, there should be systems within emerging trends can be detected, analyzed for their affectivity and applied as soon as it is confirmed to be relevant. Agility is the way out in beating market competition.
The speed with which a firm is expected to monitor the changing environmental factors should be considerably high. Jeffs (2008, p. 93) says that it is only those firms which are competitive in the market which can be able to benefit from the emerging trends. The emerging trends are always meant to give firms competitive advantage over their rivals in the market. However, it is only those firms that are able to apply these trends way ahead of its competitors that can be able to get substantial benefit. This is because a competitive advantage can only exist when a firm uses a technological approach which is not used by its competitors. When a firm uses a strategy that is common in the market, then the strategy cannot give the firm a competitive advantage in the market.
Within the modern view of organizational management, ‘organizational dynamics’ is a term that is often contrasted with organizational strategies. According to O’reilly, Charles and Tushman (2004, p. 53), organizational dynamics is concerned with the patterns of movement of activities that people in an organization take, strategies of the organization, its purposes and how the involved actors think about this pattern of movement. Within the concept of organizational dynamics, the factors of production, the people and management are critical aspects worth noting.
Factors that create a dynamic organization
Dynamic organizations are actually those organizations that apply agility and infinite adaptation to the changing business environment to thrive in rapidly changing business environment. They often apply these two aspects to ensure that they are the leading marketers, sectors or industries. Such agility and infiniteness in adapting to market changes often require a focus on the main factors of an organization that create dynamism (Schumpeter 2007). According to Hitt (2011, p. 48), there are various factors that can be attributed to dynamic organization.
This scholar says that most of these factors which create dynamic organization are in one way or the other attributed to the emerging technologies and the type of workforce within a firm. Firms are struggling to maintain agility in their operations. However, it is only a few firms that have been able to succeed in the market because of the constraints that various firms have not been able to overcome. It is important to understand some of the factors that are believed to be contributing to organizational dynamics. Daft (2009, p. 38) says that these factors can be categorized as human factors, leadership, production and technology
The human factor
Studies have shown that the competencies of an organization enable it to attain and maintain agile and dynamic edge. First, organizations need to sense the market by analysing the emergent developments as well as applying efforts to turn market intelligence into decisions that are worth using in management (Schein 2004). Secondly, organizations need to respond rapidly and effectively to changes in the marketplace. This must involve decision making and translating such decisions into actions.
It contributes a lot to the process of choreographing the essential transitions of an organization and its strategies (Schein 2004). Moreover, it is worth noting that organizations need to exploit the transient advantages by entering new markets and delivering their services or products at competitive prices. Finally, it is important for organizations to embed organizational learning through creating, adapting and making use of knowledge in all aspects of organizational management.
An in-depth consideration of the above factors brings forth the need to look at how these factors can be taken into account and applied in practice. Evidently, there is a need for an involvement of the people to ensure that the above four aspects of organizational dynamism are put in place. Therefore, one of the main factors that contribute to the creation of dynamic organizations is the human factor. When looking at human factors in an organization, human resource and managing human resource surface as the most critical point of discussion.
To ensure that an organization applies the four competencies, organizational managers must embrace human resource management as one of their principal strategies in management. Employees must be in a position to embrace agility in the marketplace in addition to understanding their roles and responsibilities in ensuring this happens within the organization (Amor 2000, p. 22). Employees in a dynamic organization have a common way of perceiving, thinking about and valuing the purposes and process of the organization. They further achieve success in their career by working in an agile as well as a dynamic style.
Specifically, the role of human resource in creating dynamic organizations is built within their ability to initiate and improvise techniques as they search for opportunities or threats in a market as well as taking creative and quick actions (Das & Teng 2007, p. 69). Secondly, the human resource (employees) contributes to the creation of dynamic organizations by performing multiple roles in various organizational projects and even working beyond their physical boundaries. Moreover, employees bear the important role of redeploying across tasks with minimum time wastage and efforts. Employees also need to enter into effective collaborations with their colleagues in every task in order to reduce wastage of time. Finally, employees learn and educate their colleague, which in turn contributes to the attainment of proficiency as they share knowledge with their colleagues within both their organizations and with those in partner organizations.
According to Schumpeter (2007, p. 23), human resource is a key item in every organization agility because it plays an important role in shaping the mindsets and behaviour of every employee. Studies have shown that employees who are adaptive, proactive as well as generative at all levels of production are a critical factor in the creation and maintenance of organizational dynamism. Human resource has been shown to contribute to the development of organizational environment that can foster agility in employee behaviour through recruitment, training and educating.
For a long time, labor has not been given its rightful position in many organizations. Many of the managements have not thought of viewing their employees as very important asserts. However, the happenings of the recent past have proven that labor force is one of the most important asserts to any given organization. When the management lays down objectives to be achieved, it is always the employees who are expected to implement the policies that would bring the desired results. It is this workforce that would be expected to turn the policies from paper to reality.
Therefore, retention of employees is very important. Employees should be retained within the organization to ensure that the firm’s operations are consistent. High turnover rate of employees is not healthy for the firm’s prosperity (Handlechner 2008, p. 118). This is because it does not only affect the smooth implementation of policies within the firm, but also leads to increased cost of training new employees. It is even worse that the employees would go away having learnt the strategies of the firm, making the firm vulnerable to its competitors.
The management should therefore, device methods of hiring qualified employees and retaining them within the firm. One of the best ways to achieve this is through motivation. It is through motivation that employees will feel attached to the firm and therefore feel committed to the firm. According to McClelland’s 3 needs theory of Motivation, irrespective of age, gender or culture, there are 3 motivating drivers (Davada 2008, p. 71). These three motivating drivers include power, achievement and affiliation. Depending on culture and general life experience, one of the three motivating drivers will be dominant over others. People will always be motivated to work because they either need power; they want achievement from their work or because of affiliation.
Having categorically looked at the importance of motivating employees, it is prudent to determine ways through which a given firm can ensure that its grip on its employees is not shaken. However, there are some factors that must be considered before determining how best a firm can motivate its employees. It is an acceptable fact that for a firm to motivate employees, it must start by employing some of the best talents that would help it achieve its goals. As such, it is important to understand how best a firm can recruit new employees. After recruiting the best of the employees, as per the measures that have been put in place, it is also important to appreciate that not all of them would live up to the expectations (Frynas & Mellahi 2011, p. 86).
As such, it would again be appropriate to determine who to retain because a firm can only retain the best of the workforce in order to be in a position to achieve the maximum. It is upon the determination of the best workforce to retain that a firm can now develop the best ways to motivating such employees. To ensure that there is a constantly motivated workforce, it would require the management to employ the right strategies that would ensure that it succeeds in this. It may appear as a simple task of making employees happy. However, it goes beyond this. To motivate employees within the firm, there are a series of strategies that a firm should employ in order to ensure that employees are constantly satisfied. The secret behind this retention lies in ensuring that the employee is satisfied and feels challenged with the present task. This will cause the drive in him to want to come tomorrow and beat the challenge.
Studies have shown that ability of a firm to maintain agility depends on the type of employees it has, and how these employees are managed within the organization. As Gerry and Scholes (2008, p. 38) states, employees form the most important part of an organization. They form a formidable asset through which an organization can achieve its objectives in the market. The market is increasingly becoming competitive for firms operating both in the local and global markets. In order to manage this competition, it is important to embrace agility in all the operations of a firm. Agility cannot be achieved by machines. As Cole (1997, p. 92) puts it, a machine cannot be agile. It is the people who are part of an organization who will determine the agility of a firm in the market. It is how flexible the workforce is to the changes that will dictate how fast such an organization will be able to adapt to the emerging trends in the market. This scholar emphasizes the fact that the carrot and stick theory that was popular in the past century cannot be relevant in the current century.
Thompson (2010, p. 27) says that employees can be the main source of success of a firm, just as they can be the source of failure. When top management formulates policies to be implemented in the organization, it is the employees who will determine how well such a policy can be to the firm. This is because they are the implementing unit within the firm. A good policy can yield disastrous results if it is implemented wrongly. On the other hand, when this workforce is positively charged in its duties, then a firm will be able to reap the best results in the market. According to Hommel (2012, p. 78), human factor has a major role to play in organizational dynamics. The human resource will be responsible for undertaking various activities within an organization. They form that part in organization responsible for actions that would determine how well a firm can meet challenges in the market.
Creativity and innovations is one of the main factors that Norton (2011, p. 115) says can help a firm manage the dynamism in the market. Coming up with creative ways of managing environmental changes will always determine how successful a firm is in the market. In most of the cases, this creativity does not always emanate from the management. The creativity is always attributed to the human resource. As Witcher (2010, p. 38) observes, General Electric has remained a strong firms in the market, not just because of good management strategies and enough financial resource, but mainly because of the type of employees they have, and the freedom they are given in their operations.
This scholar says that at General Electric, employees are always offered opportunity to deliver something new to the firm at least once in a year. The employees of this firm have enabled it maintain creativity in this industry, making it the global market leader. This is a clear demonstration that human resource forms the important aspect in managing dynamic organization. As Cole (1997, p. 86) simply puts it, employees form the most important factor in creating dynamic organization. With the right workforce, a firm can easily adapt to the changing environmental forces. This would ensure that such a firm is constantly having competitive advantage over other market competitors.
Leadership
Leadership is portrayed as another important factor in creating dynamic organizations. In fact, there is no organization without leadership. Management of people, production process and all other aspects of an organization lies within the roles of an organizational leader. However, it is important to differentiate between management and leadership (Schein 2004). Leadership is a specific term that has to do with setting the right direction for the organization, monitoring organizational progress and changing this direction in accordance with the changes in internal and external impacts.
There is a need for every leadership in every organization to be far-sighted because a clear strategy ensures that an organization does not undergo confusion, bloating and failure. Scholars in management science have argued that rather than being a role, leadership is an element that can be satisfied using a number of methods (Cohen & Levinthal 2005, p. 523). For instance, most small organizations require leadership by an individual or a small group of leaders but once it has expanded in size and scope, it requires a more advanced size of leadership, which therefore calls for expansion in the leading team.
Witcher (2010, p. 67) defines leadership as an act of offering a sense of direction to followers not only by virtue of authority one has over the followers, but also by the ability of such a person to motivate the followers to act in a desired manner. Leadership is probably the most important part of a firm to human resource. Witcher (2010, p. 77) says that although management and leadership has a thin line separating them, leadership is a more elaborate way of managing followers. Leadership has attracted attention of many scholars around the world.
According to Kodama (2008, p. 116), theories of leadership have been proposed by many scholars. Leadership is the most important factors that would dictate success of an organization in the current world. According to Hitt (2011, p. 50), leadership goes past giving directives to followers. It involves going deep into details to determine potential of the followers. It entails engaging followers in a manner that will make them rediscover themselves. It entails helping them develop an urge to achieve. It is the process of making individuals realize they have a talent beyond their perceived capacity. It requires one to challenge the others positively to make them believe that there is need to rediscover oneself. Transformational leadership theory would therefore, be important in achieving this.
According to D’Aveni (1995, p. 89), the current business world has become challenging. Technology is constantly changing the face of business environment. This poses challenges to firms that operating in the market. Customers in the current market have access to information, due to advanced communication means through social and mass media. These customers know that there are options to choose from when planning for any purchase. This has made them very demanding. They always want better quality and quantity at lesser cost.
Kodama (2008, p. 67) notes that consumers are constantly asking for more quantity, but are reluctant to pay more. This diminishes profitability of firms. Suppliers are also demanding for higher pay for the products they supply to organization. They cite inflation, high cost of living, and other factors as a cause for the increase of prices of the supplies. The cost of maintaining a business is very high. Various input factors have increased in price. The environmental conditions for conducting business have also been subjected to various other bottlenecks making the entire process very complicated. All these challenges are always presented to the leaders of various organizations to deal with.
A firm has to come up with means through which it can wade off these challenges and deliver quality products in the market in the best way possible Witcher (2010, p. 1980). This way, a firm would be able to come out as a successful business unit that can withstand market pressures. Firms share external environmental factors. Emerging technologies, good government policies, a promising market are factors that a firm cannot consider as a competitive advantage. They are factors that are shared by all the firms in that particular industry (Hitt 2011, p. 57).
A firm must therefore develop its policies that will give it a competitive edge in the market. A firm should develop mechanisms through which it can challenge the existing market threats in the best way possible. It should be able to stand out among the rest, as a firm that understands the market and is able to provide it with what it needs. A firm must appear positively special. All this depends on the leadership of the firm and as Kodama (2008, p. 68) says, it is through leadership that a firm can appear unique in a market where various factors are shared by the competitors.
This requires proper management of the workforce. According to Hommel (2012, p. 117), this current delicate market conditions requires a strategy that will help it have the best workforce that can drive the changes required within the firm. This is what most firms have realized and are determined to achieve. According to Hitt (2011, p. 75), they need to go beyond simple management of the workforce. In management, there is need for leaders. This is because the current world has gotten increasingly democratic. Many organizations today have their employees being members of trade unions. They want to enjoy maximum benefits that their employer can afford to give them, and hate restrictions.
They reshe above paragragh is said by They have to be managed in a way that would make them comfortable while at the workplace. This is what many firms are looking for in their management. This is what leadership offers to the management. There should be a leadership approach that allows employees to express their creative ideas in their areas of operations. When an employee proves to have a good idea that can be used to increase productivity and efficiency of the firm, such an idea should be sponsored by the firm in order to help the firm manage market dynamism. As such, leadership has been considered as an important factor that creates dynamic organization. The following three theories of leadership further emphasize the role of leadership in creating dynamic organization.
Path Goal Theory of Leadership
McLaughlin and Aaker (2010, p. 115) notes that this theory holds that leadership behaviour heavily influences the expectations and perception of employees in an organization. This means that actions taken by the leaders will influence the approach taken by employees in their various tasks.
This theory holds that there are four styles of leadership that are important in achieving success in an organization. They include directive nature of a leader, the supportive leadership, the participative leadership, and result-oriented leadership. The behavioral characteristics of leadership will affect employees behavior, and manage factors in the environment in order to achieve leadership effectiveness. It is these characteristics that will make it easy or complex for a leader to initiate change within an organization when this is necessary.
Production
A third and important factor that creates dynamism in an organization is production. The element of production is the actual work of any organization. Although the process of production may seem to be simple and small in scope, it includes all those activities that contribute to the delivery of the organizational operation within any given context. In fact, it includes all the tasks in management and is actually responsible for the daily delivery of an organization’s operation. Failure in the production process will always result into the failure of the whole organization.
According to Kodama (2008, p. 69), many people always view production from a narrowed scope of creation of the products for sale. However, production in this case is taken from a broad perspective of analyzing all the operational activities that are undertaken by the firm to ensure that a product is delivered to the customer in a good shape. This would involve all the activities taken from the time of acquiring the raw materials, the processing stage, and finally the process of ensuring that the product reaches the customer.
This is a very complex process that involves various departments within the firm. At this stage, firms are always obliged to employ value chain management in their attempt to ensure that products of high value finally reach the customer. Based on the changes taking place in the market, production strategy may be changed in order to ensure that such a firm deliver value to its customers. In value chain management, the issue is always to create more value to the product at every stage, in the channels it goes through before it reaches the customer.
This process starts with the quality of raw materials, the processing strategy, transport system, package and storage, and the process of delivering this product to the customer in the market. With the changing environmental factors, a firm should always strive to achieve the best production strategies in the market. Maintaining dynamism in production will always help a firm deliver new innovative products in the market at desired intervals that would help the firm become competitive.
Technology
Technology has contributed a lot to dynamism in organizations. For a long time, business units used traditional methods in order to enable a successful trading process. However, technology has been changing the approach taken in the business in a consistent manner. Technology has affected all the units of business. In the production department, technology has helped in coming up with various tools and machines of high capacity to support its operations. It has enhanced marketing by introducing new marketing platforms such as the social media and online marketing.
This has made it easy for firms to reach a wide market with their promotional messages. In the marketing department, there has been a massive change in which firms market their products in the market. Production approach of marketing was used by various firms in 1900-19945 because of the low levels of competition in the world market. However, this has changed massively with the changes brought about by technology. Technology made it easier for various firms to enter the market with products that are substitutes or competing products to those that are already in the market.
As such, a stiff competition has emerged where only firms that understand market needs can survive the storm. For this reason, firms have used the same technology to develop social marketing as the best approach of meeting the market needs and delivering products of the highest value to the market. This was an outward in approach where firms got to understand what the market needed, and made their productions based on the needs. Customers will therefore, get products that meet their expectations. The logistics department has also been massively been influenced by technology.
The world is now a global village due to the ease of transport that has been enhanced by technology. Technology has constantly been bringing new ways of transporting products, irrespective of their size, shape or durability. It is now possible to transport flowers from South Asia in the evening and the product be sold in the streets of New York the following day, thanks to air transport. Similarly, oil from Saudi Arabia can easily find its market in the markets of United Kingdom because of the advanced sea transport.
Technology has kept firms on toes in the market, always waiting for the next direction that it would dictate. Competitive firms in the market today are those that have been keen on embracing technology. As Kodama (2008, p. 19) puts it, technology is the source of dynamism in the current market. Any change that takes place in the market is associated with technology in one way or the other. These changes are either brought by changes in technology, or the change is intended to change a technological approach that is currently in use.
Scholars have advised firms to try to be early adopters of technology if they expect to benefit from a position revolution brought about by technology. Lagging in applying technology can be very destructive to a firm. This is because changing technological operations always comes at a cost. The cost should be recovered by increased productivity that would increase profitability of the firm in the market. If a technological change is made when it is too late, such a firm may not gain any benefit from the change despite the cost involved in the change. As such, D’Aveni (1995, p. 89) says that firms should embrace technology, and consider using it as a tool to gain competitive edge over other competitors in the market.
The impact of the organizational dynamics on productivity and profitability
Once a dynamic organization has been created, it attains the ability to change in adapting to a given business environment. In fact, such an organization has its human resources, leadership and production ready to change in response to an internal or external pressure that requires the organization to take some steps in maintaining its performance and profitability (Khan & Manopichetwattana 2001).
Such an organization has not only attained dynamism, but also has the potential to use this new characteristic in evading failure, poor performance and frustrations. Instead, it gains from the emerging opportunities while at the same time, evading threats. Moreover, research has shown that dynamic organizations are in a better position to forecast the possible emergence of an issue, a threat or an opportunity within its industry, which in turn means that they develop adequate measures and effective strategies in preparation for such an event. It implies that such organizations are able to mobilize their resources and employees, restructure their leadership and production process in order to survive or prevail in such an event.
However, it is worth noting that such dynamism in organizations has some negative impacts to the organization, the people and its process of production. For instance, a paradigm shift in organizational leadership means a total or a partial restructuring of the organizational management, which may have an impact on other factors such as production process and human resources. In fact, such an event would mean that the normal process of production and therefore its performance and profitability will be affected to a certain degree. There is a likelihood of slowed organizational performance once such an event takes place, especially where the change is sudden and causes some confusion, rejection or changes in attitude or morale among the people in the organization.
Such an event is likely to cause disharmony in the process of production and thus its overall performance will be affected. Secondly, dynamism in an organization may not necessarily provide a better way of dealing with opportunities, threats or other events that may be predicted or looming. For instance, false predictions, poor predictions and poor planning for an expected event could harm the organization in case such an event does not take place or takes place and affects the company in a manner not predicted when preparing to deal with it. The results would be that the organization is affected in one or more of its factors such as production, leadership or human resource.
A dynamic organization may also change to deal with an opportunity or threat but do so in a wrong manner (Anderson & Gerbing 2008, p. 419). The decision making process may be wrong, for example, when considering the best way to change a given factor of production. As such, an expected event, though predicted with accuracy, could affect the company in a negative way so that its production, performance and even profitability will be affected in a negative way. According to Hommel (2012, p. 81), firms always aim at increasing their productivity and profitability in the market as a sure way of ensuring that they remain sustainable in the market. Organizational dynamics have direct impact on the productivity and profitability of an organization according to this scholar. In order to understand the impact of organizational dynamics on productivity of a firm, it is important to focus on individual factors and determine how each of them impact on productivity and profitability in the market.
The human factor has a direct impact on productivity and profitability of an organization. The type of employees that a firm has, and their ability to adapt to the changing environmental factors would always determine how productive a firm can be in the market. A group of motivated employees who are flexible to changes in the market are able to deliver a higher production for the firm. Such employees would be able to change their approach in the market depending on what is expected of them. Such high productivity would easily translate to high profitability. The profitability will also be enhanced by the fact that the firm will be spending less in production, but reaping better results.
Leadership plays an important role in determining the productivity and profitability of a firm. For the employees to be productive, they need a leadership that would ensure that they are constantly motivated. It is only the motivated employees that can deliver good results when assigned tasks. It is the responsibility of this leadership to ensure that the entire system in the firm is functioning optimally. This will involve formulating strategies that would ensure that every department are working as expected, and that there are no overlaps that may result into cases where some duties are assigned to departments that should not be involved in them. Leadership also offers a direct link between the firm and external forces.
It is through good leadership that a firm can get associated with other successful firms, or bring new ideas that can help transform the organization. With good leadership, there would be optimal operations within an organization, and this would increase productivity. Increased productivity would always enhanced profitability. Good leadership will also help in proper management of the resources of an organization, a fact that would enhance profitability of a firm in the market. Production will also have a direct impact on the profitability and productivity of an organization. The cost of production has always been going up. For a firm to be able to be profitable, it must ensure that the costs of production are reduced to the minimal possible level. Reducing cost of production will enable an organization charge favourable prices in the market. This will increase its productivity.
Technology is a double-edged sword that can help a firm increase its productivity and profitability in the market if well managed, or enhance the reduction of the same if poorly handled (Hommel 2012, p. 79). These scholars say that poor application of technology or an attempt to ignore it can have serious negative impact on the productivity of a firm. Eastman Kodak was almost thrown out of the market because of its failure to embrace technology. It had to be rescued by Citibank in order to avoid being declared bankrupt. Other firms have also suffered due to their inability to use technology as a tool of gaining competitive advantage in the market. However, when technology is applied appropriately, it would enhance productivity and profitability of a firm. As D’Aveni (1995, p. 87) says, Fujifilm was able to emerge as the market leader in the film industry because of its agility towards technology. Google and Microsoft have also remained highly productive and profitable firms because their managements have embraced technology in their operations.
Using Organizational Dynamics to Create Competitive Advantage
According to Porter, competitive advantage is the upshot of relevant competitive strategies (2007, p. 78). It was in 1980 that Porter coined the term as he was overwhelmed by the tremendous key players in an industry trying to initiate various strategies just to be able to make it on top of the vast red ocean of possibilities by providing value for their product or service offerings.
The strategies are important because they would ensure achievement of set goals or objectives. The achievement of these goals would lead to being able to ensure provision of value for the customers and creation of wealth. At the highest consideration, competitive advantage is another important construct in the area of strategy discipline Kodama (2008, p. 71). Competitive advantage is therefore, a relevant element in the strategy discipline, as it could be an ultimate goal why a firm would employ competitive strategies in the first place.
It is important to note however, that others are using the term competitive strategy in a different manner from how Porter intends to use it in strategic thinking and innovation, and with “different meaning in different context” (Hommel 2012, p. 112). At this point, it is essential to define what competitive advantage is. Somewhere in 1990s, the idea of competitive advantage exclusively existed as a way of creating economic value in the midst of competing firms trying to do the same essential strategic actions. This is the relevant point of Barney in 1991 emphasizing further that competitive advantage will only have realization if a firm engages in a value-creating strategies that its competitors do not employ (Kodama 2008, p. 58). However, Barney does not include the possibility of this idea whether competitive advantage may have to be eradicated by the innovation of rival firms resulting to some total changes in the market space.
This is another significant highlight raised concerning the issue of competitive advantage somewhere in 2004 and 2005 as documented in the work of Tushman and O’Reilly, and Kim and Mauborgne, respectively (Witcher 2010, p. 80). In the contemporary society, the combined idea of the classical view and the issues explicated in the early 2000s concerning the competitive advantage surfaced. The works of Newbert, Powell and ’Shannassy highlighted this point, stating that competitive advantage is about pursuing strategy that competing rivals cannot duplicate and should therefore leave no room for experiencing erosion of innovative strategies over time (Hommel 2012, p. 89). For this reason, there are essential generic strategies that according to Porter, will lead the firm to its competitive advantage.
Competitive advantage has been considered as a direct product of a dynamic organization. A firm which is dynamic to the forces in the external environment will always find it easy to adapt to the changes. Such a firm would easily understand forces in the external environment, and adjust as fast as possible. This will make it have a competitive advantage over other firms.
As has been stated in the above discussion, a firm can only develop a competitive advantage if other firms cannot imitate its production and marketing strategies. However, it is a fact that it may not take long for rival firms to understand strategies that is making a firm have a competitive edge over them. Once they get to know of such a strategy, the strategy ceases to offer a competitive advantage because it shall become a common practice in the market. As such, a firm can only maintain a competitive advantage if dynamic in the environment. It must find ways through which it can change its strategies whenever it feels that the competitors have learnt their tricks. This would help it always remain a step ahead of the rival companies.
Relevant generic competitive strategies
The first generic competitive strategy is “overall cost leadership” (Porter 2007, p. 35). This one was quite popular in 1970s because of the popularity of the curve concept. Porter emphasizes that cost control is an essential move of a firm to provide a defense for itself when buyers would have to employ their force to drive down prices. The second generic competitive strategy is “differentiation” (Kodama 2008, p. 90). This highlights the ability of the firm to produce unique product or service offerings under varying dimensions like design and brand image, technology, features, customer service, dealer and others.
According to Porter, differentiation is a viable tool to obtain above-average returns because it could lead a firm to achieve a defense position to cope with the five competitive forces. The third generic competitive strategy is “focus” (Porter 2007, p. 38). This strategy emphasizes on segmentation, identification of product line, and definition of the geographic market that should be covered. While overall cost leadership strategy and differentiation are industry wide, focus strategy is around serving a particular target in an excellent effort as possible. In any of the above approaches, Porter says that the guideline should be the ability to change swiftly whenever a firm feels that the strategy has ceased to offer meaningful advantage. This dynamism will keep competitors guessing the next approach a firm will take to gain competitive advantage.
Sustainable competitive advantage
Most firms in the current market are struggling to gain competitive advantage that would give them an edge over their competitors. The various strategies in today’s setting according to Oliver (2000, p. 67), would not last as competitive edge due to the inability of most firms to embrace sustainable competitive advantage. The reason according to him is the fact that inevitable changes take place and new market entrants are surging in number in an upward spiral leading to the conclusion among business analysts that there is no such thing as sustainable competitive advantage today.
This means that from time to time, firms would be able to formulate significant strategies just to be able to create a certain value that would allow them to take the lead in the competition and obtain their competitive advantage. For as long as new market entrants and rival firms continue to formulate something that would bring them competitive advantage, a certain strategy that might have potential edge in an industry may not remain as the ultimate best in the course of time due to many firms that are able to formulate their best move forward from time to time. For Oliver, what seems to be sustainable competitive advantage should relate with the ability of the firm to formulate strategic moves that are unique and hard to emulate or simply product and services that offer higher value in the marketplace and are difficult to imitate (Oliver 200, p. 173).
In essence, the scholar wanted to explicate the idea that in order for a certain competitive advantage to be sustainable, firms should be able to produce competitive strategies that are hard to reproduce, making them unique in the marketplace that no other firms could eventually emulate them. For this reason, Oliver is trying to formulate a new idea concerning competitive advantage and according to him, there could be no such thing as sustainable competitive advantage because of the prevailing trending of discovering new essential ideas that would lead to the execution of new strategic moves across various industries or marketplaces. Concerning this point, Oliver tries to introduce the concept or idea linked up with temporary competitive advantage (2000, p. 174). In this regard, he says that the most prudent thing for a firm to do is to ensure that it is always dynamic to the environmental forces.
Temporary competitive advantage
Most firms always make it through in coming up with temporary competitive advantage in the market. The only temporary competitive advantage that is sustainable is corporate learning (McDonald’s 2013, p. 1). This scholar believes that in reality, this could represent employees’ collective knowledge arranged in a way corporation designs, develops and delivers new ideas to the marketplace, may it be for new products, new segments of customers, and new way of conducting business (Hommel 2012, p. 43). According to this scholar, the rapid change in information technologies primarily in 1980s, led to a shorter span of the knowledge in electrical engineering. With this statement, Oliver (2000, p. 68) is trying to imply that the rapid expansion of technologies in almost every area has also paved the way for the need to ensure learning at a higher level.
It is important to appreciate the importance of education as a fundamental source of learning because it has become a necessity in the age of rapid changing technology and transforming competitive advantage. Oliver (2000,p56) believes that success is prominent to those firms that are able to promote new learning and head on to new corporate initiatives.This means that he is trying to agree on the importance of innovation. Creating something new and executing a new initiative could have full realization through innovation.
However, prior to the formulation of innovation, this scholar points out the idea that learning is necessary. It is the fundamental component how the organization would be able to produce something new and sustain its competitive advantage. Corporate learning is therefore a fundamental component of the firm’s competitive advantage because it helps the firm to produce something new and execute the necessary changes that could be unique and would be able to produce competitive advantage at some point.
At this point, it is clear that this scholar is trying to explain everything to us that a certain competitive advantage could be barely sustainable today. After all, corporate learning has become so pervasive that every firm has the potential to initiate or execute a highly competitive strategic output that would have give them the chance of lifting them up to competitive advantage. For this reason, for as long as a certain strategic move does not remain unique in the marketplace, a sustainable competitive advantage cannot be guaranteed to the full according to Oliver (2000, p. 48).
Corporate learning has increasingly become constant and this is the reason why he would want to point out that new initiatives would surface from time to time in the marketplace, leaving the opportunity to every key player to hold a temporary competitive advantage. Temporary competitive advantage is therefore, synonymous to corporate learning. Its significant existence based on the concept of this scholar has clear association with how a certain firm is able to learn many things and something new from time to time. Without the ability to learn something new, it is true that firms may not able to produce new ideas, concepts and eventually a vital new execution of competitive strategies that are unique that would lead to competitive advantage.
Corporate learning is therefore, a significant challenge for its competing firms within a marketplace because it serves as the ultimate force that would be able to help the other firm to achieve its competitive advantage. On the other point, this would also hinder the chance of a certain firm to continue proliferate with its competitive advantage. Corporate learning is a remarkable capability of the firm, as one tries to include resources and capabilities just to be able to grab hold of competitive advantage.
Capability strength
Ability of a firm to develop a competitive advantage in a market depends on its capability strength. A certain idea arises concerning the prevailing academic background on how difficult it is to explain in detail how firms use resources and capabilities to create competitive advantage (Hommel 2012, p. 53). However, these two scholars offer detailed information on how capability lifecycle could explain the fundamental sources of firm’s heterogeneity. These two scholars defined dynamic capabilities as “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environment” (Chaston 2009, p. 28). This means that an organization must embrace dynamism in the market, and be able to formulate strategies through which it can change with the changing environmental factor. This also means that an organization must understand forces of change, and how each stage of change is important to the firm.
On the other hand, considering the point that capabilities follow certain stage of development and maturity, it therefore provides us the idea that its measurement is possible. However, one could not measure dynamic capability somewhere in learning, change and adaptation because none of these needs the intervention of capabilities as Witcher (2010, p. 118) would want to point out. As implied based on the above theoretical concepts, capability strength is an essential measure of the firm’s prevailing competitive advantage in its industry or marketplace. Therefore, it is crucial and necessary to understand more about this theoretical concept because this does not only allow us to explore potential gap in the literature particularly pertaining to this matter, but it would also lead us to knowing the essential tool on how to measure the ultimate competitive advantage of a certain firm or organization.
Montiel (2011, p. 98) says that Porter may not have the sufficient empirical evidences to support their claim, but their discussion of the theoretical concept that would pave us the way for understanding capability strength provides a substantial start and even the essential idea on how to measure a firm’s competitive advantage (Coulter 2009, p. 76). With this, an empirical study may eventually surface that would either justify or debunk the primary theoretical concepts. For this reason, understanding capability strength would be a significant move that would fully contribute to further understanding the vast area of strategic entrepreneurship as this concept continues to be an integral part of understanding the firm’s competitive advantage (Chaston (2009, p. 56).
Capability weaknesses
Non-dynamic capabilities of the firm according to Witcher (2010, p. 29), would change through the action of dynamic capabilities. This means that capability weaknesses would have to be recognized in the presence of dynamic strength. From the definition, as stated above, capability weakness has a strong link with an organization’s competitive disadvantage. The very justification of this claim lies at the point that capability lifecycle deals with the firm’s capabilities and their ultimate evolution over time.
Therefore, if the firm does not have substantial strength in order to mediate learning and potential change, competitive advantage may remarkably a challenge to achieve, as according to Oliver, corporate learning leads to the firm’s temporary competitive advantage. Turning capability weakness into strength is therefore, the most logical approach on how to help the firm obtain its competitive edge. Based on the above discourse so far, there is an implication that capability weakness would also stand as potential measure on how far the firm has substantially reached its competitive advantage.
Given the above reason, it is essential that when developing strategic policies, capability weakness would have a remarkable area of consideration for its further justification and even additional observation of its existence. Porter defines competitive advantage as a way of having a competitive position from the point of view of a firm reaching the maximum benefit of its competitive strategies at some point (Daft 2009, p. 67). This eventually talks about the firm’s ultimate capability to achieve change and undergo the essential process of the positive transformation.
However, it is clear that with capability weakness, a firm would not be able to achieve its competitive edge because what is necessary in a dynamically changing environment according to Oliver is an aggressive effort for substantial learning (2000, p. 78). Therefore, this scholar had the essential point when they said that dynamic capabilities do not necessarily have to mediate with learning and change. This therefore, means that in the absence of dynamic capabilities, dynamic weakness is taking its place leading the firm to obviously get a remarkable hardship in obtaining its competitive advantage.
The relationship between innovation and organizational dynamic
Innovation presents as an important area of study in modern management science. According to Kaplan and Sawhney (2010, 975), innovation is a critical element in modern organizations, especially where technological advancement and turnover rates are relatively high. In addition, innovation has become an important tool in making new strategies for business management in a competitive environment that needs the adequate application of knowledge and expertise in dealing with opportunities as well as threats. Innovation in management and organizational leadership allows organizations to use knowledge to come up with new and advanced tactics for dealing with risks, opportunities and threats and gain the competitive advantages.
It is through innovation that companies develop super brands, super strategies and unique competitive advantages over their competitors in the same business environment. Innovation entails the ability to design products or services and to implement key processes that will ensure that an organization achieves competitive advantage and sustainability of good performance in a competitive advantage. On the other hand, dynamism in an organization entails the ability to restructure some organizational factors in order to deal with opportunities or threats and in turn achieve a competitive advantage and sustain performance.
Therefore, it is worth noting that the two terms have a relationship, especially in their aims and objectives. In this context, the aim and objectives of innovation is to ensure that products or services are designed in a manner that will allow them meet the market demands. On its part, dynamism in an organization has an objective of ensuring that the organization adopt certain key strategies to meet the environmental change or demand. Here, both innovation and dynamism aim at ensuring the company sails through a given event of opportunity or threat.
According to Witcher (2010, p. 78), there is a close connection between innovation and organizational dynamics. Innovation and organizational dynamics can be analyzed from two fronts. In the modern management science, innovation plays a vital role in an organization. The challenges that firms face in the market due to the emerging trends can only be solved through innovation. Coming up with innovative ideas can help a firm develop strategies that would enable it increase is efficiency; hence reduce its operational costs in the market.
Hommel (2012, p. 27) says that technological innovation are very important for any organization to survive in the current competitive market. This is because it offers a firm to act in a positively unique way that will enable a firm to have competitive edge of its rivals. Innovation and organizational dynamics are intertwined factors that contribute to a higher adoptability and productivity of a firm in the market. According to Kodama (2008, p. 89), it is through innovation that a firm can be dynamic. It is innovative firms that can be dynamic in their operations. Innovativeness encourages constant development of new approaches of handling various activities in the market. Organization dynamics and innovations are core in ensuring that a firm remains efficient in all its operational activities.
On the other hand, D’Aveni (1995, p. 117) says that organizational dynamics always encourages innovation within the firm. Firms which understand the importance of dynamisms and its impact on the productivity of a firm will encourage employees to come up with innovative ways of carrying out various activities within the firm. This way, an organization would remain alert to changes in the market, always ready to counter challenges that may be brought by changes in the business environment.
According to Chaston (2009, p. 19), for a firm to be innovative, it should be able to have proper planning strategies that would allow it to develop strategies that can stand the test of time. There is need to develop a plan that would enable it create a strategy which the competitors cannot easily emulate. The strategy should be as dynamic as the external environmental forces. Scholars have always said that when developing an idea, it is important to take into consideration the fact that competitors might react.
Their reaction would always be geared towards ensuring that they emerge better in the market. As such, the management should develop plans to counter such moves. There is need to identify a planning method that would allow the firm to strive and defend itself at the same time. Witcher (2010, p. 39) describes of a military planning approach where the one strikes and defends self simultaneously. This is because the strategy of striking then defending ones’ self has proven to be very dangerous in the current market.
While in the process of striking, this scholar says that the competitor could also be in the process of striking. Both firms will be hit, and depending on the force each applied, one may be paralyzed in this process. This means that the firm can lose if the competitor struck with a greater force. There is also the possibility of the third party benefiting out of this rivalry without getting directly engaged. The only sure way of ensuring that this firm remains safe and prosperous would be to use the strike-as-you-protect strategy. This planning strategy is always referred to as coevolutionary gaming as discussed in the section below.
Coevolutionary Gaming
Planning is a very important process in the current competitive business world. According to Daft (2009, p. 96), the market has become so competitive that firms are forced to come up with new approaches on managing their activities in a manner that their competitors cannot easily predict. Coevolutionary gaming has come at an appropriate time when firms are struggling to find the best approach through which they can manage their operations. This is because many firms have suffered serious losses in scenarios where they develop plans only to realize that their competitors can easily understand their strategy and counter it very easily.
In such cases, a firm would be put in an awkward position trying to develop a different plan to counter that of its competitors who may seem superior in the market. According to Chaston (2009, p. 118), Coevolutionary gaming refers to a planning approach where top management creates two groups in which one group is responsible for developing new strategies, while the other group develops counteroffensive strategies. In this approach, the first group will be forced to develop new strategies every time the second group successfully counters every new strategy. This game may continue for some time until the units learns how to respond to the market competitors every time they master their strategies in the market. Hill and Jones (2010, p. 98) say that “Coevolutionary gaming mimics the dynamics fundamental to ecological competition in order to explore the effects of conflict and cooperation between teams.”
Coevolutionary gaming is fast gaining popularity in the current business environment. The process was first developed by the department of defense of the United States. When managing a small business unit, it is possible to collect data, obtain what the market needs, and develop strategies of providing this need to the market. However, military generals realized that when managing such large organizations as a military unit, such conventional strategies may not apply. This is because the same data that will be collected from the environment is the same data that is available to other competitors.
This means that applying such strategies may not yield a competitive edge over other firms in the market. For this matter, it becomes necessary for the management to design approaches that are unique to other competitors. This is what large institutions have embraced in the market today. Daft (2009, p. 114) says that “Just as in real life –where strategic feedback occurs over long time horizons – staggering moves allows these bullwhip effects to fully develop and influence strategic plans.”
This means that management of these large firms must be conscious of the time they take to come up with appropriate strategies within a time limit that will give it a competitive advantage over other firms in the market. In Coevolutionary gaming, communication is a very important tool. When starting the game, it is important for the second group that will be developing strategies to counter the strategies developed by the first group to have a way of getting information about the strategies of the first group. This means that there should be a communication process that will enable this firm to obtain this information.
Hooley (2008, p. 56) says that in this strategy, each group should have a way of obtaining strategies from the other firm in time before the other group can gain a competitive edge. As such, time will be of main importance to both groups. The longer time an organization can take in concealing its strategies from reach of the competing group, the better. This way, the management of the group which can conceal information for a long time will always be considered a victor.
In order to emerge a victor, each group must devise a strategy where it can obtain information from the other firm within the shortest time possible, while still ensuring that its information is concealed away from the competitor. This is exactly what the firm will be expected to do when it goes to the market. In the market, the firm will have the two groups which will now work as a unit, but in their own specialized roles. The first group shall have specialized in offensive role in the market, having practiced it in the firm during the planning process. It will introduce its strategies into the market.
The second group shall have specialized in counteroffensive role. When in the market, it is expected that the competitor will respond to the strategies developed by this firm. Given the fact that the first group of management had specialized in responding to such intrusion, it shall devise a new approach to counter the response of the competitor. The second group of the management on the other hand, will be expected to make an intrusion into the strategies used by the competitors. The ultimate aim of this second group would be to eliminate any competitive advantage that this competitor may have due to its current strategies.
Their role will also include diverting the attention of the competitors from digging into the strategies of this firm (developed by the first group of management), to finding ways through which they can conceal their strategies. In this manner, this firm would turn from being the aggressed, to being the aggressor. The is the best way through which a firm can survive in the current market, a fact that has seen the strategy become very common among the firms in the United States. When a firm turns into an aggressor, its competitors may not have much time attacking it because this may divide their attention. These competitors will focus on how to protect themselves from this aggressor.
This way, the strategies developed by this firm may not easily be intruded upon by the competitors. As Viardot (2004, p. 85) says, Coevolutionary gaming will always have an impact on decision biases. Most of the biases in decision making are always as a result of a narrowed thinking. It is always caused by the belief that other firms are either inferior or superior to this firm based on a number of factors. However, while coevolutionary gaming appreciates the fact that there is a possibility of having firms which are superior, while others are inferior, it also appreciates that there are dangers of considering a firm as inferior or superior.
When the management considers a firm as being superior, it may develop some unnecessary fear as it may feel inferior before that firm. This may easily make it fail to develop strategies to counter such firms because they are considered to superior to be beaten in the market. This may not necessarily be true because beating a market leader may not be as difficult as others may think. On the other hand, underrating smaller firms can be very dangerous because such small firms can easily respond to the market dynamics, giving them an edge over their competitors in the market.
According to Witcher (2010, p. 78) “Often, teams discover fundamental strategies that will work in most of the likely trajectories – but usually not until the third or fourth set of moves. Knowing what they now know, they can write a more effective strategic plan, one that starts three or four steps ahead of the competition.” In what these scholars describe as taking the third step first, the strategy makes it difficult for competitors to have a mastery of what this firm may be planning in the market. Gerber (2008, p. 76) says that coevolutionary gaming might at times impede decision making within a firm. This is because it overemphasizes on the possible counteroffensive strategies that may be applied by the competitors.
This makes the firm take a lot of time thinking of the possible ways in which competitors will respond to the strategies of this firm, instead of focusing on the needs of the market. Coevolutionary gaming has become very popular among business units in the current competitive market. This is because competition has become so stiff that competitors are forced to come up with ways in which their strategies can be unique. It is only through unique strategies that firm can gain competitive advantage in the market. This is what coevolutionary gaming offers to firms. Although some critics have faulted this approach as being oversensitive towards analyzing the response of the competitors, the strategy has been considered the most appropriate in managing market competition.