Discuss the positives and negatives of corporate culture in the competitiveness of a firm. Relate how firms should deal with different corporate cultures in mergers and acquisitions
Corporate culture refers to the values and practices that an organization shares and holds strongly in its operations. Organizations promote corporate culture in line with the firm’s characteristics. Corporate culture affects the performance of the firm in the market hence affecting its competitiveness. Corporate cultures may affect the competitiveness of a firm positively or negatively (Wheelen, Hunger & Deresky, 2016). A good corporate culture boosts control and coordination within the firm ensuring goals are well aligned between the firm and the members and enhances the effort of the workers. Good corporate culture improves efficiency within the workplace and motives employees by enhancing collaboration amongst them (Zhao, Teng & Wu, 2018). Therefore, good corporate culture amounts to a competitive advantage for the firm making it more competitive in the workplace.
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Mergers and acquisitions are business strategies that allow different businesses to combine for expansion and to promote growth. Corporate culture is an important point of consideration in mergers and acquisitions as the different business have to find common values to shares. Key to dealing with different cultures in mergers and acquisitions is planning, communication, employee and professionals’ involvement, selectivity and time (Wickford, n.d). Merging requires planning and constant communication between the different firms to determine what they have in their cultures and what they intend to achieve in their corporate culture in the merger. Involving professional in developing a culture aids the process of ensuring the best practices from both sides are retained. Employees are majorly affected by the merger and the change in culture hence involving them is central to a successful culture merge. Lastly, both firms have to be selective on what practices are beneficial and retain them as well as give the new culture time to hold and after the merger.
Explain how value chain analysis can be used to make a firm more competitive.
Value chain analysis refers to the process of firms identifying primary and supportive activities in its operations and how they contribute to value on the final product. Firms then analyze the major contributors to final product value activities to minimize costs and increase differentiation (Wheelen, Hunger & Deresky, 2016). In reducing costs, a firm seeks to gain a cost advantage by determining the factors that drive costs and identifying opportunities in cost factors for reducing costs. To do so, firms identify primary and support activities and determine the relevance of every activity in the total cost of a product. Then, the firm identifies cost drivers for each activity and the links between the activities and finally determines opportunities to reduce costs to get a cost advantage. Differentiation is about a firm trying to produce superior products to those of their competitors (Jurevicius, 2013). In this case, the firm identifies value-creating activities, examines the approaches for differentiation to develop customer value and identify the most viable differentiation for implementation.
Identify core competencies, resources, and capabilities found in your Strategic Audit firm. Explain how they make your Strategic Audit firm more competitive.
Fine accounting is a strategic audit firm with a number of core competencies, resources, and capabilities. Firstly, it has highly trained and skilled audit professionals with years of experience and practice. Secondly, the firm has a lasting reputation as a top-level accounting firm with over 200 successful research studies. Fine accounting is driven by a collaborative corporate culture centered of the values of integrity and professionalism which engage its employees and clients in delivering the best reliable results. All the core competencies and resources give the firm a competitive advantage among its competitors by placing it at the top in performance.
Discuss in detail how the VRIO Framework can be used to evaluate a business’ competencies. Explain which of the VRIO factors would allow a firm to achieve a sustainable advantage over its competitors, and why?
VRIO framework is a resource based strategic view of the firm's competencies. VRIO framework analyses business competencies through four fundamental questions which are what the Value? How rare? What's the cost to imitate? Is the business organized to tap the value of its resources? In value, VRIO determines if the resources of a business enable it to pursue an opportunity or counter a market threat. The question of "Rare" examines if a firm's resource is unique to the resources of other competitors. The question of imitation examines how difficult it is for other firms to develop and provide a similar commodity in terms of cost and resource. Finally, the question of an organization determines how organized a business is in its processes and policies to enable it to support the exploitation of its resources in developing a valuable, unique and rare product (Pineda, 2017). The imitation factor enables a firm to have the sustainable competitive advantage to its competitors has it achieves differentiation. A unique product or the uniqueness of resources are integral to the differentiation of a product and hence a source of competitive advantage.
References
Jurevicius, O. (2013). Value chain analysis. Strategic Management Insight. Retrieved on 1 October 2018, from https://www.strategicmanagementinsight.com/tools/value-chain-analysis.html
Pineda, E. M. (2017). Understanding the VRIO Framework of analysis. Profolus Information Hub. Retrieved on 1 October 2018 from https://www.profolus.com/topics/understanding-vrio-framework/
Wheelen, T. L., Hunger, J. D. & Deresky, H. (2016). Concepts in strategic management, international management, and business policy . Pearson Prentice Hall.
Wickford, H. (n.d). How to merge two different cultures in the workplace. Hearst Newspapers. Retrieved on 1 October 2018 from https://smallbusiness.chron.com/merge-two-different-cultures-workplace-13705.html
Zhao, H., Teng, H., & Wu, Q. (2018). The effect of corporate culture on firm performance: Evidence from China. China Journal of Accounting Research , 11 (1), 1-19.
