Building A Company : An Organization

The roles of for-profit and nonprofit businesses in the economy are both organizations that rely on the factors of production which are the four fundamental resources. One of them is natural resources such as land, fresh water, wind and mineral deposits. The value of all natural resources tends to rise with high demand, low supply, or both. Another one is capital which includes machines, tools, buildings, information, and technology. Capital does not include money, although businesses use to money acquire, maintain, and upgrade their capital. In additional human resources consist of physical, intellectual, and creative contributions of everyone who works within an economy. Education and motivation have become progressively important to human resources. The last fundamental resources are entrepreneurship and they are people who take risk of

The structure and design of organizations have drastically changed over the last twenty-five years. Organizations develop new goals at the beginning of the year or after the completion of previous goals, and heavily depend on planning to help achieve these goals. Planning is an integral part of organizational success, as upper management receives substantial information on various needs such as risk uncertainty, available resources, employee development, and unforeseen changes in technology (Daft, 2013). Most importantly, successful planning allows management to make effective decisions when unforeseen events arise within the organization. Not participating in planning is equivalent to taking a road trip across the country without a

“We all have competencies. They are the sum of our experiences and the knowledge, skills, values, and attitudes we have acquired during our lifetime” (Pickett, 1998, p. 103). A successful organization will have a set of competencies defined. Having competencies identified outlines the framework of standards that a company and employees should follow. There is a tendency to list a large number of competencies when creating the standards for an organization. Companies should focus on five to seven key core competencies that are needed in order to be successful. The core competencies should encompass the growth of the company, staff, and public perception.

Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources.

Core competencies are the capabilities that are critical to a business achieving competitive advantage. The starting point for analysing core competencies is recognising that competition between businesses is as much a race for competence mastery as it is for market position and market power. (Prahalad and Hamel)

Capabilities: Schmitz (2012) refers to capabilities as “what the organization can do” to effectively utilize its resources. Some examples of Raytheon’s capabilities are Raytheon’s Six Sigma progress, integrated supply chain management, and a variety of technological capabilities. Raytheon’s Six Sigma is “a disciplined, knowledge-based approach designed to increase

3. Staffs have the access to the adequate business resources such as facilities, equipment and training, professional development to ensure they are equipped with the skills and knowledge to complete the

Competencies can be used to provide the behaviours needed at work to achieve the business strategy, and enable organisations to form a model of the kinds of employee it wishes to attract through recruitment.

Capabilities refer to a firm’s skill in using its resources to create goods and services. During the 1970s and 1980s, Westlake lanes hosted a steady stream of family bowlers and birthday parties. Mr. Sugar also cultivated popular bowling leagues, 32 weeks in duration, for his Raleigh friends and neighbours. However, the capabilities of Westlake lanes can be described as a commodity that can be readily found.

For a business to be successful and have a competitive advantage, it is important to evaluate the company’s resources and capabilities (Pitt & Koufopoulos, 2012). Resources in a company are the productive assets owned (tangible or intangible) whereas capabilities are what the company can do with this (Grant, 2010). “Establishing competitive

Through an internal environment analysis, companies can identify and understand their own unique resources, capabilities, and competencies that are required for their sustainable competitive advantage. Resources, capabilities, and core competencies are the foundation of competitive advantage. There is no competitive advantages are permanently sustainable in any companies, so they have to consist on their current advantages and develop new advantages by internally understanding and analyzing their resources and capabilities. Competitors have their own unique resources, capabilities, and core competencies to create values for their customers. Both tangible and intangible resources, which include individual, social and organizational phenomena, are combined to generate capabilities. In turn, company’s capabilities are used to build core competencies. Also, core competencies are as a source of competitive advantage for a company to win in the competitive market.

According to Porter (1985) a company can apply three generic types of strategies to protect itself while competitive force is a key issue of the management. To achieve this position a strategy based on competency must be accomplished

Competitive advantage is the point of power for any organization as it is the point from which an organization can maximize it's profits if it's been planned for it well .

Competitive advantage is explained by Mahoney and Pandian (1992) as the function of industry analysis, organizational governance and the firm’s effects in the form of resource advantages and strategies. In order for a firm to be competitive it must adapt to the volatile business environment and through strategic management decisions establish a competitive advantage that will ultimately produce superior performance relative to its competitors (Akimova 2000).

Capabilities mean how the company mixes and utilizes all assets to bring the best product offered. These capabilities summarize in company 4Ps, which are listed as below: