The Use of Practices As a Tool to Create Competitiveness

A study of the relation between the Best Business Practices and the managers experience on how their outcomes contribute to their firms competitiveness

Document identifier:
Keyword: Best Practices, SME, Manufacturing, Growth, RBV
Publication year: 2005
Relevant Sustainable Development Goals (SDGs):
SDG 9 Industry, innovation and infrastructure
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The view on strategy is conditioned by the theory of the firm used and its implication concerning value creation and sources of competitive advantage. Traditionally a common view on strategy has been conceptualized as a situational choice of generic strategies (e.g. Porter) assuming a type of contingency based view of the firm. During the last decade and still dominating is the focus on core competencies or distinctive capabilities assuming a resource based view of the firm (RBV). But where do the capabilities come from? It is generally acknowledged in research that these often intangible or tacit capabilities are developed through experiential learning or learning by practicing. This is the basis of a “practice based view of the firm” (PBV), often assumed in quality theories and methodologies, as a variant or specification of RBV. It is in PBV assumed, based on research findings, that there are practices that, in combination and when effectively linked together, can be expected to consistently improve operational performance and thus provide firms who adopt them with an advantage over those that do not. Thus good business practices, and the learning and knowledge creation developed through using them, can be thought of as the base or foundation on which distinctive capabilities and hence competitive advantage is built. The Business Practices and Performance Model (BPPS) has been developed from such a perspective and operationalised in a survey instrument. It has been used in three large scale empirical investigations in New Zealand during the 1990s and recently in five regions in Sweden. This paper reports an analysis on the use of ”Best practices” among manufacturing firms, in the county of Dalarna in Sweden, with ten and more employees. The study focus on the following question: Can use of “best practices” bee seen as a contributing factor in the creation of competitiveness and in that sense contribute to the growth of the firm?


Ragnar Ahlström Söderling

Högskolan Dalarna; Företagsekonomi
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