Implementing Sustainable Competitive Advantage for Proactive

207 Pages·2010·5.27 MB·English

YANG LIU

Implementing Sustainable Competitive
Advantage for Proactive Operations in
Global Turbulent Business
Environments

ACTA WASAENSIA NO 227

INDUSTRIAL MANAGEMENT 19

UNIVERSITAS WASAENSIS 2010
Reviewers Professor Pekka Kess
University of Oulu
Department of Industrial Engineering and Management
P.O.Box 4610
90014 University of Oulu
Finland

Professor Kefan Xie
Wuhan University of Technology
School of Management
205 Luoshi Road
Wuhan 430070
P.R.China
III
Julkaisija Julkaisuajankohta
Vaasan yliopisto Syyskuu 2010
Tekijä(t) Julkaisun tyyppi
Yang Liu Artikkelikokoelma
Julkaisusarjan nimi, osan numero
Acta Wasaensia, 227
Yhteystiedot ISBN
Vaasan yliopisto 978–952–476–314–1
Teknillinen tiedekunta ISSN
Tuotantotalouden yksikkö 0355–2667, 1456–3738
PL 700 Sivumäärä Kieli
65101 Vaasa 207 Englanti
Julkaisun nimike
Kestävän kilpailuedun toteuttaminen ennakoivaan operatiiviseen toimintaan
globaalissa turbulenttisessa liiketoimintaympäristössä
Tiivistelmä
Tulevaisuuden valmistustoiminnan kilpailukyky dynaamisessa ja monimutkais-
essa liiketoimintaympäristössä perustuu ennakoivaan strategiaan. Tutkimuksen
tavoitteena on tunnistaa ja kehittää operatiivista kilpailukykyä kestävällä tavalla.
Kestävä kilpailuetu muodostuu kilpailukykyisen liiketoimintastrategian hyödyntä-
misestä liiketoimintatilanteiden hallinnassa. Nopeita strategioita hyödyntämällä
integroidaan valmistus- ja teknologiastrategiat päätöksentekijöiden muutosjohta-
misen profiileihin.
Tutkimuskysymykset ovat:
1. Miten valmistustoiminnan kilpailukykyä voidaan arvioida?
2. Miten dynaamisia päätöksiä voidaan hyödyntää toiminnan hallinnassa glo-
baalissa turbulenttisessa liiketoimintaympäristössä?
3. Miten kilpailukykypotentiaalia on mahdollista kehittää kestävällä tavalla?
Tutkimuskysymyksiin etsittiin vastauksia viiden artikkelin avulla ja soveltamalla
systeemi- ja kontigenssiteoriaa holistisen mallin muodostamiseen. Tutkimuksessa
kehitetään teoreettinen lähestymistapa mallintamiseen, jossa integroidaan ne
ydintekijät, jotka vaikuttavat operatiivisen kilpailukyvyn suorituskykyyn. Eli yh-
distämällä valmistusstrategia ja muutosjohtaminen yrityksen teknologiatasoon
voidaan käsitteellisten analyyttisten mallien avulla arvioida kilpailukyvyn tasoa
kokonaisuutena.
Dynaamisen päätöksenteon tukena on hyödynnetty Sense & Respond -menetel-
mää resurssiallokaatioiden optimoimiseksi ja strategioiden muokkaamiseksi ope-
ratiivisen kilpailukykypotentiaalin kehittämiseksi kestävällä tavalla.
Globaalissa kontekstissa tehty empiirinen tutkimus osoittaa, että kuvatun
kaltainen ennakoiva toimintatapa on keskeistä kestävän kilpailuedun toteuttami-
sessa. Tutkimus kokoaa yhteen aiheen teoreettisen keskustelun ja käytännön hyö-
dyt toiminnan johtamisesta globaalissa turbulentissa liiketoimintaympäristössä.
Asiasanat
Valmistusstrategia, transformationaalinen johtaminen, teknologiastrategia,
operatiivinen kilpailukyky, strateginen ketteryys, dynaamiset päätökset,
ennakoiva toiminta, kestävä kilpailuetu, turbulenttinen liiketoimintaympäristö

V
Publisher Date of publication
Vaasan yliopisto September 2010
Author(s) Type of publication
Yang Liu Selection of Articles
Name and number of series
Acta Wasaensia, 227
Contact information ISBN
University of Vaasa 978–952–476–314–1
Faculty of Technology ISSN
Department of Production 0355–2667, 1456–3738
P.O. Box 700 Number of Language
FI–65101 Vaasa pages
Finland 207 English
Title of publication
Implementing Sustainable Competitive Advantage for Proactive Operations in
Global Turbulent Business Environments
Abstract
The future competitiveness of manufacturing operations under dynamic and com-
plex business environments relies on forward-thinking strategies. The objective of
this work is to identify and develop the operational competitiveness in a sustain-
able manner by implementing Sustainable Competitive Advantage (SCA) for
managing dynamic business situations.

The research objective is explored through the following research questions:
1. How can competitiveness in manufacturing operations be evaluated?
2. How can dynamic decisions be utilized to manage operations in global turbu-
lent business environments?
3. How can competitiveness potential be developed in a sustainable manner?

To answer the research questions, this work presents five articles and applies sys-
tems and contingency theories to build a holistic system. It develops a theoretical
approach to modelling and integrating the core factors which affect operational
competitiveness performance, i.e. manufacturing strategy and transformational
leadership with technology level, into conceptual analytical models to evaluate
overall competitiveness, and utilizes Sense & Respond (S&R) for dynamic deci-
sion-making to optimize resource allocations and adjust strategies in order to de-
velop competitiveness potential in a sustainable manner.

Such proactive operations are proposed in this study as the key to implementing
SCA with empirical research carried out in a global context, which provide both
theoretical significance and also practical benefit to conclude the experience of
managing operations in global turbulent business environments.
Keywords
Manufacturing strategy, transformational leadership, technology strategy, opera-
tional competitiveness, strategic agility, dynamic decisions, proactive operations,
sustainable competitive advantage (SCA), turbulent business environments

VII
ACKNOWLEDGEMENTS
I would like to express my deepest gratitude to my supervisor, Prof. Josu Takala
at the University of Vaasa for his constant guidance, encouragement, support and
intensive examination of this dissertation. He is not only my academic advisor of
my doctoral studies but also a mentor and good friend in my career and life. He
has motivated me a lot in my research interest in industrial management, which
has led to fruitful research work.
I would like to thank the reviewers of my dissertation, Prof. Pekka Kess from the
University of Oulu, Finland and Prof. Kefan Xie from Wuhan University of
Technology, China, for your very valuable feedback and comments to improve
this manuscript.
My appreciation also goes to the editors and reviewers who gave valuable critique
to improve my research work and publications, especially Distinguished Prof.
Chinho Lin from National Cheng Kung University, Prof. Binshan Lin from Lou-
isiana State University in Shreveport, Dr. Kongkiti Phusavat from Kasetsart Uni-
versity, and Prof. Kristina Zgodavova from Technical University of Košice.
Many thanks to our partner universities in China for their close collaboration and
joint effort in providing assistance to carry out the empirical research, particularly
Dr. Shubin Si and Prof. Shudong Sun, Department of Industrial Engineering,
Northwestern Polytechnical University; Dr. Yun Chen and Qian Wu, School of
Management, Wuhan University of Technology; Prof. Gang Liu, Dr. Dan Chen
and Yan Shi, School of Management, Shandong University; and also School of
Management, Huazhong University of Science & Technology; School of Elec-
tronics and Information, Tongji University; School of International Business Ad-
ministration, Shanghai University of Finance and Economics.
I am grateful to Adj. Prof. Marja Naaranoja, Head of Industrial Management at
the University of Vaasa who has been very helpful to improve my dissertation,
and the science and publication editor Virpi Juppo and the publication secretary
Tarja Salo for making this dissertation into a publishable format, as well as the
researchers and staff of Industrial Management at the University of Vaasa: Prof.
Tauno Kekäle, Prof. Petri Helo, Dr. Yohanes Kristianto, Rayko Toshev, Tanatip
Kamdee, Ye Liu, Jussi Pennanen, Antti Kukkola, Antti Rajala, Ari Haapanen,
Mikael Ehrs, Ulla Laakkonen for all kinds of help, and John Shepherd for English
proofreading of the thesis; and also to my advisors Prof. Riku Jäntti at Helsinki
University of Technology and Prof. Mohammed Elmusrati at the University of
Vaasa for supporting my minor studies in Telecommunication Engineering.
VIII
My sincere thanks also go to my employers at Vaasa University of Applied Sci-
ences, Jorma Tuominen, Dean of Technology and Communication, and Kalevi
Ylinen, Head of Department of Information Technology, and all the colleagues
and students who encouraged and supported me in accomplishing my doctoral
studies in addition to my full time job.
Finally, I would like to thank my parents, my girlfriend and all people who sup-
ported me during this most difficult time. This work could have never been
achieved without your constant encouragement.

Vaasa, September 2010
Yang Liu
IX
Contents
ACKNOWLEDGEMENTS................................................................................VII
ARTICLES........................................................................................................XIII
1 INTRODUCTION...........................................................................................1
1.1 Background and objective....................................................................1
1.1.1 Operational competitiveness................................................2
1.1.2 Strategic agility....................................................................4
1.1.3 Sustainable competitive advantage......................................5
1.2 Research questions................................................................................7
1.3 Review of key terms in this work.........................................................8
1.4 Structure of the thesis.........................................................................10
2 THEORETICAL FOUNDATIONS...............................................................11
2.1 Research design..................................................................................11
2.1.1 Research strategy...............................................................11
2.1.2 Research approach.............................................................13
2.1.3 Research methodology.......................................................15
2.2 Analytical models...............................................................................19
2.2.1 Manufacturing strategy......................................................20
2.2.2 Transformational leadership with technology level...........21
2.2.3 Overall competitiveness.....................................................25
2.2.4 Sense and respond..............................................................25
2.3 Implementing sustainable competitive advantage..............................27
3 SUMMARY OF PUBLICATIONS...............................................................29
3.1 Overview of papers.............................................................................29
3.2 Summary of individual papers............................................................31
3.2.1 Paper 1: Global manufacturing strategies require
“dynamic engineers”? Case study in Finnish industries....31
3.2.2 Paper 2: Competitiveness of Chinese high-tech
manufacturing companies in global context......................33
3.2.3 Paper 3: Benchmarking and developing the operational
competitiveness of Chinese state-owned manufacturing
enterprises in a global context............................................36
3.2.4 Paper 4: Modelling and evaluation of operational
competitiveness of manufacturing enterprises...................37
3.2.5 Paper 5: Competitiveness development of Chinese
manufacturing enterprises in global context for
crisis management..............................................................39
4 EMPIRICAL RESEARCH............................................................................41
4.1 Overview of analysis process.............................................................41
X
4.2 Data processing and analysis...............................................................42
4.2.1 AHP analysis of raw data...................................................42
4.2.2 Analytical evaluation of MSI and TLI...............................43
4.2.3 Correlation analysis of MSI vs TLI....................................44
4.2.4 Development analysis of OCI potential..............................46
4.3 Findings...............................................................................................49
4.3.1 Performance of MSI...........................................................49
4.3.2 Performance of TLI............................................................49
4.3.3 Performance of MSI vs TLI................................................50
4.3.4 Performance of OCI............................................................51
4.4 Summary.............................................................................................51
5 DISCUSSION AND CONCLUSIONS..........................................................52
5.1 Findings and contributions..................................................................52
5.2 Theoretical and practical implications.................................................54
5.3 Validity and reliability.........................................................................54
5.4 Research limitations............................................................................55
5.5 Future research....................................................................................56
REFERENCES.....................................................................................................58
APPENDICES......................................................................................................69
Appendix A: Questionnaires...........................................................................69
A.1 Manufacturing strategy.......................................................69
A.2 Transformational leadership with technology level...........71
A.3 Sense and respond..............................................................76
Appendix B: Matlab code...............................................................................78
Appendix C: Articles......................................................................................85
C.1 Paper 1: Global manufacturing strategies require
“dynamic engineers”? Case study in Finnish industries.....85
C.2 Paper 2: Competitiveness of Chinese high-tech
manufacturing companies in global context.....................105
C.3 Paper 3: Benchmarking and developing the operational
competitiveness of Chinese state-owned manufacturing
enterprises in a global context..........................................123
C.4 Paper 4: Modelling and evaluation of operational
competitiveness of manufacturing enterprises.................145
C.5 Paper 5: Competitiveness development of Chinese
manufacturing enterprises in global context for
crisis management............................................................165