Organizational Flexibility in Emerging Economies
Chapter 4: Adaptive Responses Under Competitive Pressures
Chapter 3 underlined the competitive pressures ﬁrms underwent during the 1990s. We described these ﬁrms as being in a hypercompetitive or highly turbulent environment. Craig (1996) and Volberda (1999) point out that hypercompetitive environments have precipitated far-reaching changes in ﬁrms’ competitive position and have forced them to transform in order to compete eﬀectively. The adaptive responses of ﬁrms under hypercompetition would therefore vary according to the extent to which the transformation process was undertaken (Volberda, 1997). The adaptive responses of the companies under analysis are, therefore, the main concern of chapters 5–8. In his seminal work, D’Aveni (1994) points out that in hypercompetitive environments, competitive advantages are quickly eroded. Companies therefore have to be more concerned about creating new competitive advantages than sustaining old ones. D’Aveni (1994) suggests that companies have to disrupt their own advantages and the advantages of competitors. These strategies need speed and surprise to enable companies to seize opportunities ﬁrst. Questions arise as to what strategies are needed in such highly competitive environments? And what organizational and managerial challenges are required to allow a company to face hypercompetitive environments? At the strategic level, the literature has emphasized the importance of product innovation, process and knowledge as competitive and disruptive advantages. In presenting a model for understanding ﬁrms’ competitive advantages, Nault and Vandenbosch (1996: 342) assert that in hypercompetitive markets companies should cannibalize their own advantages. For them it is better to ‘eat your own lunch before someone else does’. Such a strategy requires companies...
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