an empirical analysis of the strategic management of competitive advantage

223 Pages·2012·1.61 MB·English

ANEMPIRICAL ANALYSIS OFTHE STRATEGICMANAGEMENT OF
COMPETITIVE ADVANTAGE:A CASE STUDYOFHIGHERTECHNICAL
ANDVOCATIONAL EDUCATIONINTAIWAN
By
HSUN-I HUANG
School of International Business
Facultyof Business and Law
VictoriaUniversity
Submittedinfulfilmentoftherequirementsforthedegreeof
DOCTOROFPHILOSOPHY
February,2012
ABSTRACT
Institutions of higher technical and vocational education (hereafter HTVE) in Taiwan
face the pressures of a reduced number of students and competition for students from an
increased number of domestic and international institutions. To cope with these
challenges, HTVE institutions that are better equipped to respond to market
requirements, and are prepared to make constant improvements in the efficiency and
performance of their academic and administrative affairs, are expected to attain a
competitiveadvantage andenhancetheirlong-term sustainability.
In this research, a model of competitive advantage for HTVE institutions in Taiwan is
developed and tested. The model integrates theories of strategy and competitive
advantage, namely industrial organization theory, resource-based view theory, and
Miles and Snow’s (1978) typology of strategy. Within this framework, research was
conducted to: (i) identify the elements and indicators of competitive advantage as they
apply specifically to HTVE institutions; (ii) analyze the types of strategies undertaken
by HTVE institutions to best fit with their internal and external environments; (iii)
ascertain the major factors of external industry structure, internal resources, and
institutional performance; and (iv) examine the relationships between external industry
structure, internal resources, and strategy types with institutional performance in the
context of Taiwan’s HTVE.
As a result of this research, it is concluded that integration of the resource-based view
theory and Miles and Snow’s (1978) typology of strategy provides a useful framework
in which to comprehensivelyand systematicallyanalyze an industrysector in relation to
competitive advantage. This study highlights that an effective competitive strategy for
HTVEinstitutions in Taiwan depends on the match between the state of the
environment surrounding the HTVE institutions and their use of resources. The results
have implications for government policy-makers attempting to oversee the quality of
HTVE in Taiwan, and for senior managers of HTVE institutions aiming to achieve
competitive advantage and sustainability. A series of actions can be taken, including
establishing market-exit mechanisms, advocating strategic alliances and partnerships
between institutions, co-operating with foreign institutions of higher education,
advocating industry-academia collaborations, and ensuring curriculum design in
compliancewithindustryrequirements.
ii
STUDENT DECLARATION
I, Hsun-I Huang, declare that the PhD thesis entitled An Empirical Analysis of The
Strategic Management of Competitive Advantage: a Case Study of Higher
Technical and Vocational Education in Taiwan is no more than 100,000 words in
length, exclusive of tables, figures, appendices, references and footnotes. This
thesis contains no material that has been published by another person previously, in
whole or in part, for the award of any other academic degree or diploma. Except
whereotherwiseindicated,this thesis is myown work.
Signed-------------------------------- 17st February2012
iii
ACKNOWLEDGEMENTS
To have this thesis completed is a significant step in mylife and career, and it
could not have been achieved without receiving precious support and
encouragement from several people. I would like to express my true
appreciation to my principal supervisors, Associate Professor Anne-Marie
Hede and co-supervisor, Associate Professor Wayne Binney, for their
professional guidance and consistent encouragement during the preparation of
this thesis. Their constructive and helpful supervision over the past few years
in providing great knowledge has led to the submission of my thesis. The
thesis wouldnot havebeencompletedwithout theirvaluableassistance.
I would particularly like to express my appreciation to Dr Kuo-Shung Cheng,
Dr Shang-Ping Lin and Dr Teng-Chiao Lin for their valuable contribution
during the data collection process. And special thanks also go to my previous
supervisors, Associate Professor Linda Roberts and Dr Robert Waryszak for
their guidance, patience and support at the beginning of the thesis writing
process. Without their valuable advice, I would not have been able to
determinethedirectionofthethesis.
Furthermore, I would like to thank my family, who have always given
wonderful support and encouragement during this journey. They have
provided me with a valuable opportunity for which I am greatly indebted. I
will always cherish their love and support for both myresearch and future life.
iv
TABLE OFCONTENTS
ANEMPIRICALANALYSISOFTHESTRATEGICMANAGEMENTOFCOMPETITIVE
ADVANTAGE:ASTUDYOFHIGHERTECHNICALANDVOCATIONALEDUCATIONIN
TAIWAN.....................................................................................................................................................I
ABSTRACT...............................................................................................................................................II
STUDENTDECLARATION.................................................................................................................III
ACKNOWLEDGEMENTS....................................................................................................................IV
TABLEOFCONTENTS..........................................................................................................................V
LISTOFFIGURES..............................................................................................................................VIII
LISTOFTABLES...................................................................................................................................IX
CHAPTER1:INTRODUCTION.............................................................................................................1
1.1INTRODUCTION...................................................................................................................................1
1.2RESEARCHBACKGROUND...................................................................................................................1
1.3RESEARCHAIM...................................................................................................................................2
1.3.1Generalaim................................................................................................................................3
1.3.2Specificaims..............................................................................................................................3
1.4OVERVIEWOFTHECONCEPTUALFRAMEWORK...................................................................................4
1.5OVERVIEWOFTHERESEARCHMETHOD..............................................................................................4
1.6CONTRIBUTIONSOFTHERESEARCH....................................................................................................5
1.7STRUCTUREOFTHERESEARCH...........................................................................................................6
CHAPTER2:LITERATUREREVIEW:STRATEGICMANAGEMENT.........................................8
2.1INTRODUCTION...................................................................................................................................8
2.2INDUSTRIALORGANIZATION(IO)THEORY.........................................................................................8
2.2.1 Mason/Bain’s structure-conduct-performanceparadigm..........................................................8
2.2.2 Porter’s five-forcemodelofcompetition..................................................................................10
2.2.3 Summary and critique of Porter’s five-forcemodelofcompetition.........................................12
2.3THERESOURCE-BASEDVIEW(RBV)THEORY.................................................................................15
2.3.1Classificationofresources.......................................................................................................16
2.3.2SummaryandcritiqueofRBVtheory.......................................................................................20
2.4STRATEGYTYPES..............................................................................................................................21
2.4.1 Miles and Snow’s typology of strategy.....................................................................................24
2.4.2 Empirical applications of Miles and Snow’s typology.............................................................25
2.5INTEGRATIONOFIOANDRBVTHEORIES.........................................................................................29
2.6SUMMARY.........................................................................................................................................31
CHAPTER 3: TAIWAN’S HIGHERTECHNICALANDVOCATIONALEDUCATIONSECTOR
....................................................................................................................................................................32
3.1INTRODUCTION.................................................................................................................................32
3.2HIGHEREDUCATION:ANINTERNATIONALREVIEW...........................................................................32
3.3TAIWAN’SEDUCATIONSYSTEM........................................................................................................34
3.4THEHISTORICALDEVELOPMENTOFTAIWAN’SHTVESECTOR........................................................36
3.5STRUCTURALCHANGESINTAIWAN’SHTVESECTOR.......................................................................39
3.5.1Comparisonofnumbersofseniorvocationalhighschoolsandseniorhighschools...............39
3.5.2ComparisonbetweenthreetypesofHTVEinstitutions............................................................40
3.5.3ChangeinthenumberoffreshmanstudentsenrolledatHTVElevel.......................................42
3.6EXTERNALENVIRONMENTANALYSISOFTAIWAN’SHTVESECTOR.................................................43
3.6.1Macroenvironmentanalysis....................................................................................................43
3.6.2Microenvironmentanalysis.....................................................................................................46
3.7SUMMARY.........................................................................................................................................48
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CHAPTER4:CONCEPTUALFRAMEWORK...................................................................................49
4.1INTRODUCTION.................................................................................................................................49
4.2APPLICATIONOFIOANDRBVTHEORIESTOTHECONTEXTOFEDUCATIONALINSTITUTIONS...........49
4.3DEVELOPMENTOFHYPOTHESES.......................................................................................................51
4.3.1Relationshipbetweenexternalindustrystructureandstrategytypes......................................51
4.3.2Relationshipbetweenexternalindustrystructureandinstitutionalperformance....................53
4.3.3Relationshipbetweeninternalresourcesandstrategytypes....................................................54
4.3.4Relationshipbetweeninternalresourcesandinstitutionalperformance.................................57
4.3.5Relationshipbetweenstrategytypesandinstitutionalperformance........................................59
4.4SUMMARY.........................................................................................................................................61
CHAPTER5:RESEARCHMETHOD..................................................................................................62
5.1INTRODUCTION.................................................................................................................................62
5.2RESEARCHPARADIGM.......................................................................................................................62
5.3JUSTIFICATIONOFTHERESEARCHAPPROACH...................................................................................64
5.4STAGEONE:QUALITATIVERESEARCH...............................................................................................65
5.4.1Recruitmentofinformants........................................................................................................66
5.4.2Interviewprocess.....................................................................................................................67
5.4.3Interviewquestionsandtranscription......................................................................................67
5.4.4Dataanalysis............................................................................................................................69
5.5STAGETWO:QUANTITATIVERESEARCH............................................................................................71
5.5.1Questionnairedesign...............................................................................................................71
5.5.2Scaling......................................................................................................................................73
5.5.3Pre-testanditemmodification.................................................................................................73
5.5.4Sampling..................................................................................................................................74
5.5.5Datacollectionmethod............................................................................................................75
5.5.6Dataanalysis............................................................................................................................76
5.6RELIABILITYANDVALIDITY.............................................................................................................79
5.7SUMMARY.........................................................................................................................................82
CHAPTER6:QUALITATIVERESEARCHFINDINGS....................................................................83
6.1INTRODUCTION.................................................................................................................................83
6.2MAJORELEMENTSOFEXTERNALINDUSTRYSTRUCTURE..................................................................83
6.2.1Competitiverivalry..................................................................................................................83
6.2.2Threatofsubstitutes.................................................................................................................86
6.2.3Threatofentrants.....................................................................................................................89
6.2.4Bargainingpowerofbuyers.....................................................................................................91
6.2.5Bargainingpowerofsuppliers.................................................................................................93
6.3MAJORELEMENTSOFINTERNALRESOURCES....................................................................................94
6.3.1Organizationalresources.........................................................................................................95
6.3.2Humanresources.....................................................................................................................97
6.3.3Financialresources................................................................................................................102
6.3.4Physicalresources.................................................................................................................104
6.3.5Marketingcapabilities...........................................................................................................107
6.3.6R&Dcapabilities....................................................................................................................111
6.4MAJORINDICATORSOFINSTITUTIONALPERFORMANCE..................................................................115
6.4.1Studentperformance..............................................................................................................116
6.4.2Staffperformance...................................................................................................................119
6.4.3Institution-levelperformance.................................................................................................122
6.5SUMMARY.......................................................................................................................................132
CHAPTER7:QUANTITATIVERESEARCHRESULTS................................................................134
7.1INTRODUCTION...............................................................................................................................134
7.2RESPONSERATE..............................................................................................................................134
7.3PROFILEOFRESPONDENTS..............................................................................................................134
7.4FACTORANALYSIS..........................................................................................................................136
7.4.1Factoranalysisforexternalindustrystructure......................................................................138
7.4.2Factoranalysisforinternalresources...................................................................................140
7.4.3Factoranalysisforinstitutionalperformance........................................................................142
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7.5CLASSIFICATIONOFSTRATEGYTYPES............................................................................................144
7.5.1Clusteranalysis......................................................................................................................144
7.5.2Discriminantanalysis.............................................................................................................145
7.6HYPOTHESESTESTING....................................................................................................................146
7.6.1Hypothesisone.......................................................................................................................146
7.6.2Hypothesistwo.......................................................................................................................146
7.6.3Hypothesisthree.....................................................................................................................147
7.6.4Hypothesisfour......................................................................................................................148
7.6.5Hypothesisfive.......................................................................................................................149
7.7SUMMARY.......................................................................................................................................150
CHAPTER8:DISCUSSION.................................................................................................................152
8.1INTRODUCTION...............................................................................................................................152
8.2FACTORSINTHEMAJORASPECTSOFCOMPETITIVEADVANTAGE....................................................152
8.2.1Factorsofexternalindustrystructure....................................................................................152
8.2.2Factorsofinternalresources.................................................................................................153
8.2.3Factorsofinstitutionalperformance......................................................................................154
8.3CLASSIFICATIONOFSTRATEGYTYPES............................................................................................156
8.4RELATIONSHIPBETWEENTHEMAJORASPECTSOFCOMPETITIVEADVANTAGE................................157
8.4.1Relationshipbetweenexternalindustrystructureandstrategytypes....................................157
8.4.2Relationshipbetweenexternalindustrystructureandinstitutionalperformance..................158
8.4.3Relationshipbetweeninternalresourcesandstrategytypes..................................................159
8.4.4Relationshipbetweeninternalresourcesandinstitutionalperformance...............................159
8.4.5Relationshipbetweenstrategytypesandinstitutionalperformance......................................161
8.5SUMMARY.......................................................................................................................................162
CHAPTER9:CONCLUSIONSANDIMPLICATIONS....................................................................164
9.1INTRODUCTION...............................................................................................................................164
9.2OVERVIEWOFRESEARCH................................................................................................................164
9.3CONCLUSIONSREGARDINGTHERESEARCHQUESTIONS..................................................................166
9.3.1Elementsandindicatorsofcompetitiveadvantage................................................................166
9.3.2Classificationofstrategytypes..............................................................................................166
9.3.3MajorfactorsininfluencinganddeterminingthecompetitiveadvantageofHTVEinstitutions
........................................................................................................................................................167
9.3.4Relationshipsbetweenexternalindustrystructure,internalresources,andstrategytypeswith
institutionalperformance................................................................................................................168
9.4SIGNIFICANCEOFTHERESEARCHANDITSCONTRIBUTIONTOKNOWLEDGE....................................170
9.4.1Theoriesofstrategyandcompetitiveadvantage....................................................................170
9.4.2Strategicmanagementofhighereducationinstitutions.........................................................170
9.4.3 Framework for analysis of Taiwan’s HTVE sector................................................................171
9.5MANAGERIALIMPLICATIONS..........................................................................................................171
9.5.1Establishmarket-exitmechanisms.........................................................................................172
9.5.2Advocatestrategicalliancesandpartnershipsbetweeninstitutions......................................172
9.5.3Co-operatewithforeigninstitutionsofhighereducation......................................................173
9.5.4Advocateindustry-academiacollaborations..........................................................................173
9.5.5Ensurecurriculumdesignisincompliancewithindustryrequirements...............................174
9.6LIMITATIONSANDOPPORTUNITIESFORFUTURERESEARCH............................................................174
9.7CLOSINGCOMMENTS......................................................................................................................176
REFERENCES.......................................................................................................................................178
APPENDIX.............................................................................................................................................195
APPENDIX1-LISTOFINTERVIEWEES....................................................................................................195
APPENDIX2-IN-DEPTHINTERVIEW......................................................................................................196
APPENDIX3-QUESTIONNAIRESURVEY................................................................................................200
APPENDIX4-IN-DEPTHINTERVIEW(CHINESEVERSION)......................................................................206
APPENDIX5-QUESTIONNAIRESURVEY(CHINESEVERSION)................................................................209
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LISTOF FIGURES
FIGURE2-1STRUCTURE-CONDUCT-PERFORMANCEPARADIGM...................................................9
FIGURE2-2PORTER’SFIVE-FORCEMODELOF COMPETITION....................................................11
FIGURE2-3EVOLUTIONOFTHERBVTHEORY..........................................................................20
FIGURE3-1TECHNICALANDVOCATIONALEDUCATIONSYSTEMOFTAIWAN............................36
FIGURE3-2CHANGEINNUMBEROFSENIORHIGHSCHOOLSANDVOCATIONALSCHOOLS..........40
FIGURE3-3CHANGEINTAIWAN’SECONOMICGROWTHRATEANDUNEMPLOYMENTRATE ......44
FIGURE3-4CHANGE INNUMBEROFBIRTHS.............................................................................45
FIGURE3-5CHANGEINNUMBEROFSENIORVOCATIONALSCHOOLSTUDENTS..........................47
FIGURE4-1THEINTEGRATEDMODELOFCOMPETITIVEADVATNAGE........................................50
FIGURE5-1STRUCTUREOFCHAPTER5................................................................................….62
FIGURE9-1MODELOFCOMPETITIVEADVANTAGEFORHTVEINSTITUTIONSINTAIWAN.......169
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LISTOFTABLES
TABLE2-1MILESANDSNOWSTRATEGYCONTINUUM..............................................................25
TABLE2-2DIFFERENCESBETWEENIOANDRBVTHEORIES...............................................29
TABLE3-1CHANGEINNUMBEROFHTVEINSTITUTIONSINTAIWAN.......................................41
TABLE3-2CHANGEINNUMBEROFSTUDENTSENROLLEDINHTVELEVEL...............................43
TABLE5-1 COMPARISONSOFPARADIGMSINSOCIALANDBEHAVIOURALSCIENCES.................63
TABLE5-2 SUMMARYPROFILEOFTHEINTERVIEWEES .............................................................67
TABLE5-3CRONBACH’SALPHASFORTHEFOURMAJORFACTORS............................................81
TABLE6-1EXTERNALINDUSTRYSTRUCTURE:THEMESANDSUB-THEMES................................83
TABLE6-2INTERNALRESOURCES:THEMESANDSUB-THEMES..................................................95
TABLE6-3INSTITUTIONALPERFORMANCEINDICATORS:THEMESANDSUB-THEMES...............115
TABLE7-1PROFILEOFRESPONDENTS.....................................................................................135
TABLE7-2RESULTSOFFACTORANALYSISFOREXTERNALINDUSTRYSTRUCTURE.................140
TABLE7-3RESULTSOFFACTORANALYSISFORINTERNALRESOURCES...................................142
TABLE7-4RESULTSOFFACTORANALYSISOFINSTITUTIONALPERFORMANCE........................143
TABLE7-5RESULTSOFCULSTERANALYSIS............................................................................145
TABLE7-6RESULTSOFDISCRIMINANTANALYSIS...................................................................146
TABLE7-7DIFFERENCESINPERCEPTIONSOFEXTERNALINDUSTRYSTRUCTUREBETWEEN
FOURSTRATEGYTYPES....................................................................................................146
TABLE7-8MULTIPLEREGRESSIONRESULTS:EXTERNALINDSUTRYSTRUCTURETO
INSTITUTIONALPERFORMANCE........................................................................................147
TABLE7-9DIFFERENCESINCOMBINATIONSOFINTERNALRESOURCESBETWEENFOUR
STRATEGYTYPES.............................................................................................................148
TABLE7-10MULTIPLEREGRESSIONRESULTS:INTERNALRESOURCESTOINSTITUTIONAL
PERFORMANCE.................................................................................................................149
TABLE7-11DIFFERENCESINLEVELSOFINSTITUIONALPERFORMANCEBETWEENFOUR
STRATEGYTYPES.............................................................................................................150
TABLE7-12THERESULTSOFTHEHYPOTHESISTESTS.............................................................151
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CHAPTER1:INTRODUCTION
1.1Introduction
This chapter outlines the background information needed to develop a competitive
advantage model for institutions of higher technical and vocational education (HTVE)
in Taiwan. Subsequently, the research objectives are identified, as are the expected
outcomes and the benefits of the research. In the final section, the research process is
formulated andthethesis structureis described.
1.2Research background
Technical and vocational education plays an important role in cultivating a nation’s
skilled labour. It can improve the quality of the skilled labour, and effectively respond
to the demand of labour so as to meet the needs of rapid economic development (Yuen,
1993). In recognition of the importance of technical and vocational education for the
economyof a country, many countries in the Asia-Pacific region have placed increasing
emphasis on technical and vocational education. This has depended on historical, social,
economic and political considerations (Tilak, 2002). Taiwan, as a country in the Asia-
Pacific region, has placed a high priority on technical and vocational education for a
long time, particularly at an early stage of the industrialisation process. The “Taiwan
Economic Miracle”has owed much to its system of vocational and technical education
as it has produced ahighlymotivatedand well-trainedlabourworkforce(Yuen,1993).
The technical and vocational education system in Taiwan has traditionally nurtured a
variety of workforce preparation levels that have contributed to a solid economic
foundation. However, since the 1990s, Taiwan has been confronted with both internal
and external challenges. Internally, Taiwan needs a more effective education and
training system to develop and maintain higher quality human resources (Lee, 1996).
This workforce demand is based on the nation’s economic structure, which has
gradually shifted from manufacturing to information technology and biotechnology.
Externally, Taiwan needs to maintain and promote its competitiveness in the global
economy (Lee, 1996). Faced with these challenges, it has been important for Taiwan’s
technical and vocational education sector, particularly higher level technical and
vocational education, to make structural adjustments that are aligned with the needs of a
developing society and to respond to future worldwide trends and changes (Yu & Hsu,
1