Organizational Capability Management Task
An Organizational Capability Management Task is a management task for organizational capabilities.
- Context:
- It can make use of an Organizational Capability Measure.
- It can make use of an Organizational Capability Analysis Task.
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- Example(s):
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- Counter-Example(s):
- See: Theory of The Firm, Process Capability Analysis, Business Resource, Business Process Reengineering.
References
2020
- (Wikipedia, 2020) ⇒ https://en.wikipedia.org/wiki/Capability_management_in_business Retrieved:2020-4-2.
- Capability management is the approach to the management of an organization, typically a business organization or firm, based on the “theory of the firm” as a collection of capabilities that may be exercised to earn revenues in the marketplace and compete with other firms in the industry. "Capability Management" seeks to manage the stock of capabilities within the firm to ensure its position in the industry and its ongoing profitability and survival.
Prior to the emergence of capability management, the dominant theory explaining the existence and competitive position of firms, based on Ricardian economics, was the resource-based view of the firm (RBVF). The fundamental thesis of this theory is that firms derive their profitability from their control of resources – and are in competition to secure control of resources. Perhaps the best-known exposition of the Resource-based View of the Firm is that of one of its key originators: economist Edith Penrose. "Capability management" may be regarded as both an extension and alternative to the RBVF that asserts that it is not control over physical resources that is the basis for firm profitability but that "Companies, like individuals, compete on the basis of their ability to create and utilize knowledge;...". [1] In short, firms compete not on the basis of control of resources but on the basis of superior Know-How. This Know-How is embedded in the capabilities of the firm – its abilities to do things that are considered valuable (in and by the market).
- Capability management is the approach to the management of an organization, typically a business organization or firm, based on the “theory of the firm” as a collection of capabilities that may be exercised to earn revenues in the marketplace and compete with other firms in the industry. "Capability Management" seeks to manage the stock of capabilities within the firm to ensure its position in the industry and its ongoing profitability and survival.
2016
- (Leinwand et al., 2016) ⇒ Paul Leinwand, and Cesare R. Mainardi. (2016). (2016). “Strategy That Works: How Winning Companies Close the Strategy-to-execution Gap.” Harvard Business Review Press,
- QUOTE: ... the authors reveal five practices for connecting strategy and execution used by highly successful enterprises such as IKEA, Natura, Danaher, Haier, and Lego. These companies: Commit to what they do best instead of chasing multiple opportunities; Build their own unique winning capabilities instead of copying others; Put their culture to work instead of struggling to change it; Invest where it matters instead of going lean across the board; Shape the future instead of reacting to it. ...
, from (Leinwand et al., 2016).
- QUOTE: ... the authors reveal five practices for connecting strategy and execution used by highly successful enterprises such as IKEA, Natura, Danaher, Haier, and Lego. These companies: Commit to what they do best instead of chasing multiple opportunities; Build their own unique winning capabilities instead of copying others; Put their culture to work instead of struggling to change it; Invest where it matters instead of going lean across the board; Shape the future instead of reacting to it. ...
2015
- (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/Capability_management_in_business#Capability_vs Retrieved:2015-12-15.
- A process is how the capability is executed. Much of the reengineering revolution or Business process reengineering focused on how to redesign business processes. ... Dave Ulrich makes a distinction between capabilities and competencies: individuals have competencies while organizations have capabilities. Both competencies and capabilities have technical and social elements.
At the individual-technical intersection, employees in the firm bring functional skills and competencies such as programming, cost accounting, electrical engineering, etc. At the individual-social intersection, leaders also have a set of competencies or skills such as setting the strategic agenda and building relationships. Moving to the intersection of organizational and technical, are business capabilities. In short, they are the technical things or what the firm must know how to do to execute strategy. For example, a financial service firm must know how to manage risk and design innovative products.
Finally, we have organization capabilities such a talent management, collaboration, and accountability. They integrate all the other parts of the firm and bring it together. When leaders have mastered certain competencies, organization capabilities become visible. For example, when a leaders master "turning vision in to action" and "aligning the organization," the organization a whole shows more accountability.
- A process is how the capability is executed. Much of the reengineering revolution or Business process reengineering focused on how to redesign business processes. ... Dave Ulrich makes a distinction between capabilities and competencies: individuals have competencies while organizations have capabilities. Both competencies and capabilities have technical and social elements.
- ↑ Leonard, 1998
2004
- (Ulrich & Smallwood, 2004) ⇒ Dave Ulrich, and Norm Smallwood. (2004). “Capitalizing on Capabilities.” In: Harvard Business Review.
- QUOTE: If you ask them which companies they admire, people quickly point to organizations like General Electric, Starbucks, Nordstrom, or Microsoft. Ask how many layers of management these companies have, though, or how they set strategy, and you’ll discover that few know or care. What people respect about the companies is not how they are structured or their specific approaches to management, but their capabilities — an ability to innovate, for example, or to respond to changing customer needs. Such organizational capabilities, as we call them, are key intangible assets. You can’t see or touch them, yet they can make all the difference in the world when it comes to market value.
These capabilities — the collective skills, abilities, and expertise of an organization — are the outcome of investments in staffing, training, compensation, communication, and other human resources areas. They represent the ways that people and resources are brought together to accomplish work. They form the identity and personality of the organization by defining what it is good at doing and, in the end, what it is. They are stable over time and more difficult for competitors to copy than capital market access, product strategy, or technology. They aren’t easy to measure, so managers often pay far less attention to them than to tangible investments like plants and equipment, but these capabilities give investors confidence in future earnings. Differences in intangible assets explain why, for example, upstart airline JetBlue’s market valuation is twice as high as Delta’s, despite JetBlue’s having significantly lower revenues and earnings.
In this article, we look at organizational capabilities and how leaders can evaluate them and build the ones needed to create intangible value. Through case examples, we explain how to do a capabilities audit, which provides a high-level picture of an organization’s strengths and areas for improvement. We’ve conducted and observed dozens of such analyses, and we’ve found the audit a powerful way to evaluate intangible assets and render them concrete and measurable.
- QUOTE: If you ask them which companies they admire, people quickly point to organizations like General Electric, Starbucks, Nordstrom, or Microsoft. Ask how many layers of management these companies have, though, or how they set strategy, and you’ll discover that few know or care. What people respect about the companies is not how they are structured or their specific approaches to management, but their capabilities — an ability to innovate, for example, or to respond to changing customer needs. Such organizational capabilities, as we call them, are key intangible assets. You can’t see or touch them, yet they can make all the difference in the world when it comes to market value.