Value Based Theory & Competitive Advantage

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Abstract

To remain competitive in the 21st century there are key pillars that an organization needs in order to be a leader in their industry and will enable it to value the needs for their customers globally. These pillars include an effective management style, diversity management and business ethics. These key pillars with a strong organizational culture will enable an organization to gain a competitive advantage over their competitors. In order to be successful in the 21st century market, an organization must be able to identify and adapt to these pillars. How these pillars are connected to competitive advantage is what this paper is about. Measuring the values for these pillars will allow an organization to work in different cultural environments and come out strong and successful. They will enable a company to gain a competitive advantage in the global market. These pillars will be represented within a 100 year old corporation that has changed in order to adapt to the 21st century market United Parcel Service, UPS.

Introduction:
Competitive advantage is something that we hear everyone talking about nowadays. From our CEO’S, teachers, managers, community leaders, small business owners, students, and people who are thinking of embarking in the world of entrepreneurship. The first thing we need to define is what exactly competitive advantage is and why is it so important in today’s world, the 21st century. Competitive advantage is “the ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than they do” (Jones & George, 2010 p. 22). Knowing the definition of competitive advantage is not sufficient for managers to be able to apply a market based value driven management strategy. The authors intend to give the readers an overview of the key pillars that are necessary to develop and maintain competitive advantage globally within organizations. The key pillars that every organization must incorporate are a successful management style, diversity management, business ethics and a strong organizational culture that will facilitate competitiveness in today’s global environment. Gable and Ellig (1993) introduced a new approach for businesses to coordinate the different decisions and the amounts of information managers are faced with everyday. They called the new approach “Market Based Management”. Gable and Ellig (1993) believed that in order to understand an organization and have it compete at an advantage in today’s market they have to let it act as a free society and apply the market principals. Otherwise they will “find themselves distant competitors to firm that do” (Gable & Ellig, 1993, p. 5). In order to apply the market based principals every organization needs to evaluate the eight facets of value driven management (Pohlman, 1997). Pohlman (1997) basically summarizes the theory by stating what is valued is what will ultimately drive actions. In the transportation and logistics industry the customers are one of the main direct forces from the ever changing and evolving task environment in which managers are faced with day in and day out. The reason that customers are one of the main forces is because it is the customers that end up influencing the decisions, strategies, missions, purpose and values of the corporations in the 21st century. The authors must first define what customers are because customer satisfaction is the main goal of any organization that is in business. “Customers are the individuals and groups that buy the goods and services an organization produces.” (Jones & George, 2010, p. 186). Customers in the transportation and logistics industry demand delivery of their products in the fastest and most economical way possible without suffering any damage. We will examine UPS in each of the main pillars (management, diversity, ethics, culture and global interaction)....
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