Abstract:
The research explores the competencies that lead to firm success, success defined as the attainment of above-average rents over the long-term. The research asserts that to fully understand how companies come to be successful one needs to adopt a complex understanding of performance led by the internal workings of the firm. This involves identifying how different allocation processes might adapt resources to develop unique organisational competencies.Case study research was the most appropriate methodology to use in studying the internal workings of the firm. The case study focused on a single South African firm and, more specifically, on the competencies within a particular business division. Five competencies were identified and their development and evolution analysed in five historical phases of the organisation.Key findings are summarised as follows: strong leadership was essential in driving a particular strategy that once it became institutionalised developed into a core competence; one of the precursors to the development of competencies was the leaders’ choice of the firm’s positioning on the value chain; a collaborative organisational structure was not necessary for the development or evolution of organisational competencies; external sourcing for competencies was unsuccessful when the acquired competencies were foreign to the existing store of competencies in the organisation; institutionalisation, initially required to develop certain competencies, can inert the evolution of competencies due to perceived threats to existing norms and values in the organisation. The research also explored the development of competencies in an isolated environment which affords time to allocate resources and to develop processes in isolation from external market forces to build unique competencies.The findings contribute to an in-depth understanding of the reasons for the firm’s success as well as contributing to an area of strategy theory that is empirically understudied, particularly in the South African case. The research concludes with suggestions for further research to contribute to this important understudied area.
