For multinational companies looking to win over new customers and recruit the brightest talent, workforce diversity can be an important source of competitive advantage.
How do firms achieve and sustain competitive advantage? This is one of the paramount questions in the field of strategic management. The example of Procter & Gamble shows that a diverse workforce can be developed into what is known as a “dynamic capability”, creating a lasting competitive edge.
“Dynamic capabilities” are a set of specific and identifiable processes (Eisenhardt and Martin, 2000). To be more explicit, they are “the firm’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments” (Teece et al, 1997). Although this definition may sound a little abstract, we can see that dynamic capabilities are, in fact, embodied in many strategic processes: for example, alliance-building, product development and strategic decision-making. And because they are dynamic, these capabilities involve adaptation and change.
See full Article.
Posts
