Task Environment and Resource Deployment: Their Impact on the Performance of Telecommunications Firms in Asia-Pacific Co
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Task Environment and Resource Deployment: Their Impact on the Performance of Telecommunications Firms in Asia-Pacific Countries Norlia Ahmada and Rachda Chiasakulb a Faculty of Business and Management, Open University Malaysia (OUM), Kuala Lumpur, Malaysia. E-mail: [email protected]/[email protected] b Asia Plus Securities Public Company Limited, Bangkok, Thailand
This research combines both the positioning school and the Resource-Based View models in an analysis of telecommunications firms operating in Asia-Pacific countries. From a strategic management viewpoint, it provides an analysis of the task environment as an external factor, as well as changes in resource deployment as internal factors, to these firms. Thereafter, it examines the influence of a task environment, which has experienced enormous changes resulting from market deregulation and rapid technological advancement, and resource deployment on firm performance. Our findings support the notion that changes in task environment, which correspond to a decrease in market concentration and an increase in task ambiguity lead to a lower profitability rate among firms. In addition, this study also indicates that a firm’s ability to respond to changes in the task environment is reflected in changes in resource deployment. Finally, a considerable change in resource deployment is also associated with a higher level of performance. Notably, this study offers some insights on issues of heterogeneity among firms within the telecommunications industry, suggesting that they are uniquely different in term of their objectives and strategic resources. Asian Business & Management (2005) 4, 157–184. doi:10.1057/palgrave.abm.9200128 Keywords: market concentration; task ambiguity; resource deployment; performance
Introduction and Objectives of the Study The conceptual idea for this research originates from the increasing importance of transformation in the telecommunications industry, coupled with the argument in the strategy literature on the relative influence of industry forces Received 9 August 2003; revised 20 September 2004; accepted 12 October 2004
Norlia Ahmad and Rachda Chiasakul Task Environment and Resource Deployment
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and firm factors on overall performance. The industry and firm effect issues fall on the boundary of the industrial organization (IO) or positioning school and strategic management fields. The idea from the positioning school is that industry structure is the central determinant of firm performance and, in the field of strategy, strategic management scholars argue that a firm’s profitability depends on the resources and distinctive capabilities of each firm relative to its rivals, rather than to industry forces.1 This research combines both the positioning school and the Resource-Based View (RBV) in a strategic analysis of the telecommunications industry. Preceding studies2 of the telecommunications industry, covering such topics as privatization of incumbents and market liberalization issues, have been addressed primarily by economic
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