Download - MEASURING THE COMPETITIVENESS OF A FIRM
MEASURING THE COMPETITIVENESS OF A FIRM
Prof. Dr. Dilek Çetindamar Sabancı School of Management
Sabancı University&
Hakan KilitçioğluArge Consulting
June 2013
Dilek Cetindamar, Hakan Kilitcioglu, (2013),"Measuring the competitiveness of a firm for
an award system",Competitiveness Review: An International Business
Journal incorporating Journal of Global Competitiveness,
Vol. 23 Iss: 1 pp. 7 - 22
Contents• Goal
• Model
• Advantages
• Next
Origins of the model• TUSIAD - Sabancı University Competitiveness Forum
(REF) is a research center formed in Istanbul in 2003 by:
• Turkish Industrialists’ and Businessmen’s Assoc.and
• Sabancı University.
• REF’s mission is;
• to help improve the competitiveness of Turkish private sector in international markets by conducting and supporting research on competitiveness, innovation and technology management and benchmarking.
• Specialized in measuring competitiveness at the:• national, • sectorial, • company level.
• Collaborate with SEDEFED (the Federation of Industrial Associations) on Competitiveness Congress
• Develop and launch the award together
• Project start: 2009 November
• 10 applicants
• Project ends: 2010 November
Goal• Measuring competitiveness at the firm level
Literature review• Competitiveness: to utilize a nation’s human,
capital, and natural resources in their ultimate productivity.
• Nations compete with each other to supply an environment to attract investments, keep high productivity, high wages and sustainable growth.
• Measurements are at the national level.
• Best examples:
• Institute for Management Development (IMD)’s World Competitiveness Yearbook and
• World Economic Forum’s Global Competitiveness Index (GCI) (since 1979)
WEF:Publicly available data & the Executive Opinion Survey
12 major pillars/measurement categories:
1. well-functioning public and private institutions2. appropriate infrastructure3. a stable macroeconomic framework4. good health and primary education 5. higher education and training 6. efficient product markets 7. efficient labor markets 8. efficient financial markets9. the ability to harness the benefits of existing technologies10. market size11. producing new and different goods using the most
sophisticated production processes12. through innovation
Lack of academic studies at firm level
• Few studies only
• Muhittin Oral’s brillant models but very complex
Model• Competitiveness refers to a firm’s capacity to
compete in a specific market, to increase its market share, to enter international markets by exporting, and to achieve sustainable growth and profitability.
Objectives of the award:• Raising awareness on sustainable global competitiveness
• Reward those who have achieved sustainable global competitiveness
• Raising awareness on basic criteria that enhances competitiveness
• Increasing the companies’ ability to compete by way of spreading the exemplar practices of the successful companies
International examples?• Deloitte “Fast Growing company competition” (only
IT)
• “The Porter Prize” considers one dimension of the firm in competition: strategy. Since 2001 (in Japan only)
• The UK award model is developed and given by a magazine called “Real Business” since 1997 (for UK firms)
• The Belgium award: “The European Business Awards” sponsored by the Dutch bank HSBC and other business organizations (European firms)
3 Pillars of: “The Most Competitive Firm of the Year”
1. OUTCOME since company needs to show performance in all aspects of what it does to compete.
2. RESOURCES an umbrella term to describe competencies of a firm.
3. MANAGERIAL PROCESSES AND CAPABILITIES to include a capability term in order to include the role of management in the transfer of inputs into outputs.
Leadership Sust
aina
bilit
y of
st
rate
gies
Abilit
y to
dev
elop
pr
oces
ses a
nd
syst
ems Human
ResourcesTechnolog
y,
Innovation,
Design
Financial Resources
Outcome Indicators (%40)
Resources (%30)
Managerial Processes and Capability (%30) (which provides effective and efficient use of
resources)
Customer & Society
Growth Export Value added & Profit
Outcome Indicators
Advantages• One of the first complete model
• One of a few award models at operation
Advantages1. Multi-faceted evaluation
• Only the last year is evaluated but the last three years’ performance is taken into account.
• “Goal” and “Accrued” data from the company records• “Comparison” data from the company’s competitors or the best
in their field, or market performance average
2. Compatibility to All Sectors and Flexibility• “Relevance” title gives the company to rate the performance
for its relevance to their sector. • Each company is given an “open ended question” to guide us
on how to evaluate their performance • The award comprises questions for “all sectors” from
manufacturing to service.
3. Considering performance data within a context by evaluating it with its connections to company resources and infrastructure
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EXAMPLE: HUMAN RESOURCES PERFORMANCE
Relevance 2007 2008 2009
Employee Satisfaction Percentage RealizedGoalComparison
In-house Training Hours per Employee RealizedGoalComparison
Number of Improvement Proposals per Employee RealizedGoalComparison
Please answer the following questions about the Human Resources approaches (qualitative
measures) in your company
1. Is your human Resources Management compatible with your company’s strategies? How do you achieve
this compatibility?
2. Does your company use performance based salary system?
……
Results (objective measures):
Results score= [(the scope of each criteria x
realized performance)/2] x (targets) x (benchmarking)
Approach score=(appropriateness and
development level of the approach) x (implementation) x
(achieving sustainability)
Results Score %
Approach Score %
Total Score
OTURCOME INDICATORS
1. GROWTH A: 0 100% (A*10): 0
2. EXPORT A: 0 100% (A*10): 0
3. VALUE ADDED & PROFIT A: 0 100% (A*10): 0
4. COSTUMER & SOCIETY A: 0 50% B (costumer) 0 30% (A*5+B*3+C*2): 0C (Society) 0 20%
RESOURCES
5. HUMAN RESOURCES A: 0 40% B: 0 60% (A*4+B*6): 0
6. FINANCIAL RESOURCES A: 0 30% B: 0 70% (A*3+B*7): 0
7. TECHNOLOGY, INNOVATION, DESIGN A: 0 40% B: 0 60% (A*4+B*6): 0
INFRASTRUCTURE
8. LEADERSHIP A: 0 40% B: 0 60% (A*4+B*6): 0
9. SUSTAINABILTY OF STRATEGIES A: 0 30% B: 0 70% (A*3+B*7): 0
10. ABILITY TO DEVELOP PROCESSES AND SYSTEMS A: 0 40% B: 0 60% (A*4+B*6): 0TOTAL SCORE 0
AWARD SCORE TABLE
CUSTOMER & SOCIETY B (Customer)
MANAGERIAL PROCESSES AND CAPABILITY
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Evaluation Process(1)Application Prosess
Selecting the Assessors
Handing over the Application Forms to the Assessors
Individual Evaluations* Positive aspects* Improvement opportunities* Questions
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Evaluation Process(2)Reaching a consensus and site visit planning
Site Visits
Reaching a consensus and Scoring
Announcing the Prize Winner• Jury meeting• The Award Ceremony• Sending the final evaluation reports to the applicants
Next• Customize the model for SMEs
• Work on the Category 2 award:“The Fastest Growing Company with its International Operations”
Contact:Prof. Dilek Cetindamar, [email protected]
Hakan Kilitçioğlu, [email protected]
www.ref.sabanciuniv.edu
www.rekabetkongresi.org