chapter - Pearson

Competitive advantage
The ability to outperform competitors
or other organizations that
provide similar goods and services.
Chapter 1
Organizational Behavior and Management
19
first-line managers or supervisors and production workers. An organization seeking
to obtain a competitive advantage—that is, the ability to outperform competitors
or other organizations that provide similar goods and services—can do so by pursuing
any or all of the following goals: (1) increasing efficiency, (2) increasing quality,
(3) increasing innovation and creativity, (4) increasing responsiveness to customers. 20
The study of organizational behavior can help managers achieve these goals, each of
which is a part of managing human resources to gain a competitive advantage (see
Figure 1.4).
Increasing Efficiency
Organizations increase their efficiency when they reduce the amount of resources
such as people and raw materials they need to produce a quantity of goods or services.
For example, McDonald’s Corporation developed a fat fryer that not only
speeds up the cooking time of french fries but also reduces by 30 percent the amount
of oil used in the cooking process. In today’s increasingly competitive environment,
organizations are trying to increase efficiency by finding ways to better utilize and
increase the skills and abilities of their workforce. Many organizations train their
workforce in new skills and techniques such as those needed to operate increasingly
computerized assembly plants. Similarly, cross-training workers so that they learn
the skills necessary to perform many different tasks (as they do at Southwest Airlines)
and finding new ways of organizing workers so that they can use their skills more
efficiently are major parts of the effort to improve efficiency. Many organizations,
like NUMMI, are creating self-managed work groups that are collectively responsible
for finding cost-reducing ways to perform their jobs.
The global competitive challenge facing U.S. organizations is increasing the
need to invest in the skills of the workforce, because better-trained workers can make
better use of new technology. Organizations in Japan, Germany, and some other countries
make a long-term investment in the form of a guarantee of lifetime employment.
During their employment, employees develop skills specific to that organization and
help provide it with a competitive advantage. By contrast, U.S. organizations have traditionally
invested less money in training their workers. But now, with advances in
technology requiring a more skilled workforce, many U.S. organizations are increasing
their investment in their human capital by training new and existing employees.
FIGURE 1.4
How to Manage Human
Resources to Gain a
Competitive Advantage