Strategic Capabilities

Topics: Strategic management, Capability approach, Management Pages: 8 (2903 words) Published: March 2, 2012
Strategic Capabilities

Strategy is all about planning the next moves, making decisions - how and where to move forward from the current position. In the past, strategy was associated mainly with the military sector, the top chiefs of command were making tactical choices in order to defeat their rivals and achieve victory. In the business sector the purpose of strategy is in principle the same, planning and building a road or path that will lead us to where ever it is we want to be in the future and to overcome all obstacles that might lay on the way. However, there is a difference between those two sectors, soldiers need only to follow orders without seeing or understanding the big picture, while in the organization's strategy, in order to achieve maximum efficiency and better performance, all the people involve need to understand the reason for their actions. Successful strategies relayed, among other things, on the organization (military or any business) to possess the strategic capability to perform in different levels to reach specific goals that lead to success, and that can be sometimes a hard task for the organization due to the fact that capabilities as well as other product or service, evolves as time goes by. Definition of Strategic Capability (SC)

There are many different definition to the term ‘Strategic capabilities’, Johnson and Scholes define strategic capabilities as the capabilities of an organization that contribute to its long-term survival or competitive advantage (Exploring strategy, 2011). Joakim define SC as high–level routines, resources and competences that are recognized as important in order to create and sustain a competitive advantage ( Joakim S, 2010), While Korn and Pine refer to the capabilities of the members of the organization that enable the formation and deployment of strategy in pursuit of a sustainable advantage (Kim Korn and Joe Pine). There is no right or wrong, all the definitions are correct and all of them concluded that SC related to the capability of an organization to achieve advantages over the competitors. And in order to achieve advantages, organizations need to evaluate their resources and technologies, financial statuses and human resources to its disposal and at the same time to know how to combine and synchronize those elements in to action, which eventually will lead to prosperity. In other words, in order for an organization to create or maintain an advantage over another, the organization need to evaluate its resources and competences. While doing so, the organization can define and dived between its operational capabilities (how the organizations earn its living and what it does best) and its dynamic capabilities, Teece et al. (1997: 516) define dynamic capabilities as ‘the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.’ Or in other words, how the organization can change and modify its operational routines to be fitted parallel to the changes accrue in the surrounding environment. Create and Maintain Strategic Capabilities Nowadays.

We are living in a rapid world with a lot of constant change, which new technology and new ideas rising constantly, for some companies and organizations those changes can be illustrated as a superior and breakthrough advantage over other, while in other situations it can be consider to be a catastrophe, e.g. a company can have unique and exclusive competencies in a certain area, but due to new presented technology they might lose their main competencies. Therefore, organizations and other business need a constant observation on the environment (competitors, technology, economic, social and politic aspect), and to be able to assess exactly where is it that they stand, with continuous chasseing and evolving new capabilities. Due to those new requirements, organizations need to adopt and adjust to current situations in order to...
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