Performance Measurement of Technology-Production Base of the Firms: Ascertaining Their Strategic Competitive Advantage
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Performance Measurement of Technology-Production Base of the Firms: Ascertaining Their Strategic Competitive Advantage Panayiotis Sioutis & Konstantinos Anagnostopoulos
Received: 4 October 2013 / Accepted: 28 November 2014 # Springer Science+Business Media New York 2014
Abstract The strategic use of resources and dynamic capabilities that compose the “Technology-Production Base” (TPB) build an absolute strategic advantage for a firm’s competitiveness. Thus, the performance measurement of constituents of TPB becomes a key priority to the manufacturing firm. By this consideration, the purpose of this paper is to define a reliable and user-friendly set of measures as key performance indicators (KPIs) that reflects the TPB’s constituents and assesses the strategy performance of a manufacturing firm appropriately. The study rests on the novel theoretical model of the firm’s TPB established by analysis of its three basic constituents— machinery, human resources, and the interaction relationships of humanware—regarding them as measurable elements. The results from analysis of the firm’s TPB are the novel concepts of “Strategy-Focused Manufacturing,” “Wheel of TPB Creation,” and “TPB Scorecard,” which comprises a set of 20 KPIs tested in an initial research project in which were involved three internationally competing manufacturing firms. Keywords Technology-production base . Non-financial measurements . Strategy-focused manufacturing . Wheel-of-TPB . TPB scorecard
Introduction The investigation of success and failure of economies and firms were and continue to be a timely and controversial issue for discussion. On the question, “why some firms succeed where others fail?,” there is no general answer. Every era has its own answers. However, since in the current era the growth of economies is generally based on technology and is rapidly affected by its changes, the success of the firms depends more P. Sioutis (*) : K. Anagnostopoulos Department of Production and Management Engineering, Democritus University of Thrace, Vasilisis Sofias 12, Xanthi 671 00, Greece e-mail: [email protected] K. Anagnostopoulos e-mail: [email protected]
J Knowl Econ
and more on intangible resources like knowledge, manufacturing competencies and skills, innovation, and dynamic capabilities, which strategically determine the competition and their position in the market. To survive and prosper under conditions of change, firms must develop the ‘dynamic capabilities’ to create, extend, and modify the ways in which they make their living (Helfat et al. 2007). The dynamic capabilities and their strategic character as a competitive advantage and also their resource-based perspective shaped a distinguished field of study that strongly affects the theory as well as the current practice of the firms (Porter 1980, 1985; Teece et al. 1997; Teece 2009; Helfat et al. 2007; Penrose 1959/2009). However, the concept of dynamic capabilities, despite of its importance, remains a generic notion (it covers a wide semantic level), which is not specified in an
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