Management DecisionStrategic capabilities and their relationship to organisational success and its measures:Some pointers from five Australian studiesAlan Simon Vanya Kumar Peter Schoeman Pirrie Moffat Damien Power

Article information:To cite this document:Alan Simon Vanya Kumar Peter Schoeman Pirrie Moffat Damien Power, (2011),"Strategic capabilities andtheir relationship to organisational success and its measures", Management Decision, Vol. 49 Iss 8 pp.1305 - 1326Permanent link to this document:http://dx.doi.org/10.1108/00251741111163133

Downloaded on: 01 June 2015, At: 18:34 (PT)References: this document contains references to 49 other documents.To copy this document: permissions@emeraldinsight.comThe fulltext of this document has been downloaded 2156 times since 2011*

Users who downloaded this article also downloaded:John A. Parnell, (2011),"Strategic capabilities, competitive strategy, and performance among retailersin Argentina, Peru and the United States", Management Decision, Vol. 49 Iss 1 pp. 139-155 http://dx.doi.org/10.1108/00251741111094482Nicholas O’Regan, Abby Ghobadian, (2004),"The importance of capabilities for strategicdirection and performance", Management Decision, Vol. 42 Iss 2 pp. 292-313 http://dx.doi.org/10.1108/00251740410518525Andrea Ordanini, Gaia Rubera, (2008),"Strategic capabilities and internet resources in procurement: Aresource-based view of B-to-B buying process", International Journal of Operations & ProductionManagement, Vol. 28 Iss 1 pp. 27-52 http://dx.doi.org/10.1108/01443570810841095

Access to this document was granted through an Emerald subscription provided by 472570 []

For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald forAuthors service information about how to choose which publication to write for and submission guidelinesare available for all. Please visit www.emeraldinsight.com/authors for more information.

About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The companymanages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well asproviding an extensive range of online products and additional customer resources and services.

Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committeeon Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archivepreservation.

*Related content and download information correct at time of download.

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Strategic capabilities and theirrelationship to organisationalsuccess and its measures

Some pointers from five Australian studies

Alan SimonUniversity of Western Australia Business School (M261), Perth, Australia

Vanya KumarCommercial Roads, VicRoads, Kew, Australia

Peter SchoemanOracle Consulting Services, Brisbane, Australia

Pirrie MoffatFreehills Law Firm, Perth, Australia, and

Damien PowerDepartment of Management, Melbourne University, Melbourne, Australia

Abstract

Purpose – The purpose of this paper is to determine the strategic capabilities that are related tosuccess in five disparate Australian industries.

Design/methodology/approach – Five studies were conducted using a generative multi-stageresearch approach in order to determine the capabilities that are related to success in the managementconsulting, advertising and IT industries, legal profession and top 500 listed companies.

Findings – There is a clear commonality of capabilities across all studies. These are quality ofservice, particularly customer service; good leadership and vision, which encourages innovation andcreativity; selection and retention of excellent staff with good technical skills; credibility, integrity andhonesty; excellent differentiated product(s) or service(s); and adaptability and flexibility. In general thecapabilities were significantly related to the organisational success measures.

Research limitations/implications – The study could be extended to other Australian andinternational industries.

Originality/value – Organisations that develop and implement resources to be proficient in allthese capabilities should achieve increased success measured by a mix of hard and soft performanceindicators. Our study is differentiated because the drivers and, indeed the indicators, of success havebeen proffered by executives themselves (not just the literature), who were located in disparateindustries. Their views are deemed important because Australia’s economy emerged relativelyunscathed from the global financial economy and avoided a recession.

Keywords Common strategic capabilities, Organizational success, Corporate strategy, Australia

Paper type Research paper

1. IntroductionSirmon and Hitt (2009) have argued that increased globalisation and technologicaladvances have forced many companies to rethink how they would relate to theircustomers in the future. Their original paper must have been written before the advent

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0025-1747.htm

Strategiccapabilities

1305

Management DecisionVol. 49 No. 8, 2011

pp. 1305-1326q Emerald Group Publishing Limited

0025-1747DOI 10.1108/00251741111163133

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

of the global financial crisis (GFC). Hence they could not have foreseen just how crucialcustomer service and several other strategic capabilities would become in theaftermath. The GFC began with the collapse of the sub prime mortgage market in 2008.Mortgages were taken out at low interest rates by homebuyers who could not afford topay them back when fixed interest rates reverted to variable market rates. The crisisaffected the whole world including Australia, not just the USA (Tariquzzamam et al.,2008). In the aftermath, Carpenter (2010, p. 5) posed the question, “What does it mean tomanage effectively through tough times? Is there really no playbook to follow?” Headded (Carpenter, 2010, p. 5) that, “for some organizations, effective management willmake the difference between death and survival. For other firms, effective managementwill position their organizations to emerge from the downturn alive – with greaterfocus, clearer purpose, and brighter future prospects”. In this paper we will argue thatthis playbook for managers might consist, at least in part, of developing excellentstrategic capabilities that Australian executives, across many disparate industries,consider critical for success (see also Simon, 2010). Our overarching theoreticalframework of reference is strategic capabilities and organisational success, wellillustrated by the portfolio of capabilities developed and effectively implemented by anoutstanding vehicle manufacturer. Thereafter we present and discuss the results of ourfive studies. We then move on to articulate the six strategic capabilities that areconsidered across the board to be related to success. We acknowledge that our researchwas not conducted during the global financial crisis and subsequent recovery.However, given that these six drivers for success are emphasized by business leadersacross such a range of industries and because Australia emerged relatively unscathedfrom the global financial crisis and avoided a recession, we are hopeful that they mayhelp executives everywhere who are managing in tough times and may have to do soagain in the future.

2. Theoretical frameworkThe concept of developing and effectively using strategic capabilities to achievesuccess is not new to business and management literature and there is clear agreementwith Hubbard et al. (1996) and Hubbard et al. (2007) that strategic (and dynamic)capabilities have three distinct characteristics:

(1) they are difficult to imitate;

(2) they are of value to the customer and are;

(3) better than those produced or possessed by competitors (see also Ambrosiniet al., 2009; Barney, 1991; Deeds et al., 1999; Eisenhardt and Martin, 2000; Helfat,1997; Lambe et al. 2002; Macher and Mowery, 2009, Peteraf, 1993; Sher and Lee,2003 and Teece et al., 1997). Zander and Kogut, 1995 make a case for distinctiveor superior competencies which are even better if matched to environmentalexigencies or opportunities).

These capabilities are “specific physical (e.g. specialized equipment, geographiclocation), human (e.g. expertise in chemistry) and organisational (e.g. superior salesforce) assets [. . .]” (Eisenhardt and Martin, 2000, pp. 1106-7). It is effective usage ratherthan their mere possession that generates a competitive advantage and enhancessuccessful performance for McKelvie and Davidsson (2009).

MD49,8

1306

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

The use of strategic capabilities to achieve a competitive advantage is particularlywell illustrated by the Mercedes Benz car group (www.mbusa.com/index.do2). Formore than a century, Mercedes has consistently developed and manufactured vehiclesthat are recognized all over the world as the very best. The company has focused on thestrategic capabilities of innovation (Davidson et al., 2009), technical knowledge (White,2002) and quality of service (Lagrosen and Lagrosen, 2007; Teece et al., 1997). ThusMercedes Benz is considered to be about the safest, most comfortable andtechnologically advanced car on the road. The car’s trademarked emergencybraking system and its electronic stability program are designed to keep the occupantssafe. In addition to these substantive qualities, the car has also been endorsed by ClintEastwood and Janice Joplin and a red one was gifted to Nelson Mandela on his releasefrom a Cape Town prison. It is therefore so strongly branded that it is almostimpossible to imitate, a crucial property of an outstanding strategic capability asmentioned above. Notwithstanding the good quality of their products, competing carslike BMW and Lexus, are still not spoken of in the same breath as Mercedes Benzdespite the fact that its vehicles are comparatively very expensive (see also Simon,2010).

There is consensus too in the literature on how to measure business success. Kaplanand Norton’s (2005) balanced scorecard is generally used to measure successfulperformance and their original article has been reprinted as a classic in the HarvardBusiness Review. Perhaps oversimplifying for the sake of brevity, “soft” and “hard”indicators are contained in the scorecard. Kaplan and Norton’s (2005) measures arefinancial, internal business, innovation and learning and customer perspectives. Their“hard” measures might be operationalised as increased profitability, shareholderreturn, marketshare and growth (see also Lambe et al., 2002 and Robins and Wiersema,1995). “Soft” measures impact more indirectly on the bottom line and they might beoperationalised as increased customer and job satisfaction, improved teamwork, andso on.

However, while there is a great deal of management literature on capabilities andindicators as separate entities, we discovered that there is comparatively less analysisof the actual relationships between specific strategic capabilities and success factors(e.g. Robins and Wiersema, 1995). Writing specifically about IT as a possible strategiccapability per se, Bharadwaj (2000, p. 170) has noted that “only a limited number ofstudies have explored the resource-based view of IT, and the analyses to date havebeen mostly conceptual”. Therefore his study sought to “empirically examine theassociation between IT capability and business performance” (Bharadwaj, 2000, p. 170)and indeed established the link. Because there is comparatively less reporting ofstatistical analysis of the relationships between strategic capabilities and successfactors, we attempted to empirically test these relationships in the managementconsulting, advertising, IT and legal industries and ultimately, in our capstone study ofthe top 500 companies listed on the Australian Stock Exchange (ASX). This articlereports the findings of these studies, each conducted by one or more of the authors,starting with the strategic capabilities that lead to success in management consulting,in the results section. At the end of our paper we elicit common strategic capabilitiesfrom the five studies and are thereby able to clearly articulate important drivers forbusiness success. Based on the findings of the five studies we propose that thedevelopment of human resources who are proficient at implementing six specific

Strategiccapabilities

1307

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

strategic capabilities, could conduce to organisational success. We describe the actualstrategic capabilities that are considered important for organisational success byexecutives in very different industries and also how they relate to specific indicators oforganisational performance. In this way we hope to build a “better theory of firmperformance as well as” (inform) “managerial practice” (Teece et al., 1997, p. 509).

3. The research methodology for the five studiesThe research projects all used some form of a generative research strategy (Simon et al.,1996; Sohal et al., 1996). This multi-stage process uses qualitative researche.g. interviews of a small sample from the target population and content analysis ofrelevant documents (e.g. brochures) or web sites and a major literature review toconstruct a questionnaire which is then distributed to a broader sample of the targetpopulation. Therefore the questionnaire is developed and constructed from an updatedreview of the literature and from initial qualitative research among the targetpopulation itself. Repeated themes relating to the strategic capabilities and successfactors were deduced from the literature review and qualitative research and thisenabled the construction of the four-point Likert scales that were inserted in thequestionnaires used in four of the five studies. The four-point Likert scales ranged fromcritical or utmost importance or very important to totally unimportant. Respondentswere also asked to rank the top three strategic capabilities and success factors in thesefour studies. The only exception was the fifth study – the ASX Top 500 researchproject – as the questionnaire contained five-point scales for the capabilities, but also afour-point scale for the success factors. Respondents were not asked to rank the topthree in the Top 500 study so an ordering by mean score is provided in the resultssection. For example, the question asked in the management consulting study was“please rate the following skills and values that lead to management consultingsuccess, according to how important you consider them to be”. The second part of thequestion was “which of the 3 above listed skills and values do you think are mostimportant [the response options were first, second and third most important]?” Themain question asked in the law firm study was “which of the above strategiccapabilities (a list was provided) do you consider to be the three most important for thesuccess of your law firm?”

The two general hypotheses across the four studies are:

(1) That there are a number of common strategic capabilities that are consideredimportant for success by executives in five disparate industries.

(2) That these strategic capabilities are related to many performance indicators.

It needs to be noted that most, but not all of the capabilities and performance indicatorswere standardised across the range of businesses included in the research. A few areesoteric because they were generated by literature relevant to, and leaders of, differentindustries. However, what is most important, as will be shown, is that six strategiccapabilities (and a number of performance indicators) were common to all five studies.

3.1 Method for the management consulting studyIn the first phase of the study on strategic capabilities and management consultingsuccess, 23 non-standardised schedule interviews were conducted among a purposive( judgmental) sample of practicing management consultants. The questions in the

MD49,8

1308

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

interview schedule drew reference to nine strategic capabilities and six performanceindicators established from an initial literature review. A minimum standard of threereferences to a strategic capability and two to a performance indicator was used.Alongside these 23 depth interviews, the brochures of 19 consulting firms wereanalysed. From these two qualitative techniques, there also emerged a number ofadditional strategic capabilities and performance indicators. A minimum cut-off of fourwebsites or interviewees supporting or mentioning a strategic capability or successfactor was established. In the second phase, a new set of strategic capabilities andsuccess indicators obtained from the qualitative research and the review of theliterature enabled the construction of a questionnaire. This new set contained a total of20 strategic capabilities and ten success indicators. As mentioned, these were insertedas four-point Likert scales in the questionnaire and all are listed in Table I. Thisquestionnaire was sent to 1128 members of the Australian Institute of ManagementConsultants (IMC). The response rate was 35 per cent – 391 returns. Figure 1summarizes the research method.

Validity, according to Zikmund (2003), addresses whether a survey instrument hasmeasured what it was designed to. Comparisons between the IMC membership and therespondents to our study produced very similar results. For example, 86 per cent of theIMC’s members and 87 per cent of our respondents were males. We therefore argue thatthis study appears valid.

3.2 Method for the advertising agency studyIn the first phase of this particular research study, an attempt was made to conduct 20in-depth telephone interviews. A semi-structured interview, containing a mix of closedand mostly open-ended questions, was constructed. Several attempts were made toobtain interviews among senior managers of advertising agencies but no-oneconsented (usually citing being too busy as the reason for non-participation). Thestrategy was therefore altered and thereafter agencies were telephoned and requestedto hand e-mailed semi-structured interviews to senior managers for completion in theirown time. Fourteen completed “interviews” were received by this method, either bye-mail or fax. The data produced by this small sample were analysed qualitativelyusing handcounts to determine the main themes repeatedly mentioned by respondents.

In the second phase of the research, a questionnaire was constructed. The surveyedliterature and the findings from the “interviews” were used to generate thequestionnaire. Five strategic and six general management capabilities as well as ninesuccess factors were generated by the qualitative research and/or the literature. Dataobtained from the interviews suggested that the capabilities be divided into strategicmanagement and general strategic capabilities. A minimum of three literary referencesand citing of, or support for, a capability or performance indicator by threeinterviewees was required for further canvassing in the questionnaire. All thecapabilities and indicators can be seen in Table II. Simon et al., (1996, p. 34) point outthat in this generative strategy, “informal techniques harvest crucial concepts from thetarget population itself. These concepts are . . . finally tested among a larger section ofthe population using the more formal procedures”. The AFA (Advertising Federationof Australia) agreed to e-mail this questionnaire to 216 top executives (Chief ExecutiveOfficers or Managing Directors or Financial Contollers/Directors) in advertisingagencies in Australia and who were also members of the AFA. Only 11 (5.1 per cent)

Strategiccapabilities

1309

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Str

ateg

icca

pab

ilit

ies

Per

form

ance

mea

sure

s

Fu

nct

ion

sW

eig

hte

dsc

ore

Sk

ills

and

val

ues

Wei

gh

ted

scor

eS

ucc

ess

ind

icat

ors

Wei

gh

ted

scor

e

Qualityof

service

582

Integrityandhonesty

616

Custom

ersatisfaction

873

Set

tin

gcl

ear

obje

ctiv

es41

5Client-Consultantcommunication

596

Pro

fita

bil

ity

388

Sol

vin

gp

rob

lem

s35

7Credibility

271

Rep

eat

bu

sin

ess

277

Sel

lin

g28

0R

epu

tati

on19

9P

erso

nal

/Job

sati

sfac

tion

272

Defi

nin

gp

rob

lem

s20

9D

isci

pli

ne

ofco

nsu

ltan

t15

2R

efer

rals

217

Unique/Differentiatedproduct

108

Net

wor

kin

g/B

uil

dre

lati

onsh

ips

148

Rev

enu

e12

1Technicalknow

ledge

104

Pro

ject

man

agem

ent

skil

ls11

5G

row

th55

Innovation/R&D

80Abilityto

dealwithambiguity(flexibility)

92M

eeti

ng

the

bu

dg

et29

Bro

adsk

ill

bas

e78

Ch

aris

ma

15L

ong

evit

yof

con

sult

ing

pra

ctic

e29

Mar

ket

ing

/Ad

ver

tisi

ng

63Id

enti

fyin

gtr

end

sin

con

sult

ing

12N

um

ber

ofcl

ien

ts/

size

ofcl

ien

tb

ase

17

Notes:

Ital

ics

hav

eb

een

use

dto

elic

itth

eco

mm

onsu

cces

sd

riv

ers

that

are

emp

has

ized

inth

eco

ncl

usi

on

Table I.Strategic capabilities andconsulting successindicators in themanagement consultingstudy ranked in order ofimportance for eachcategory

MD49,8

1310

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

responded. Thus the questionnaire was e-mailed to all the remaining advertisingagencies in Australia with a request that it be completed by, or forwarded to anexecutive for completion and return by e-mail or fax. A total of 386 were sent out in thesecond e-mail out and about 10 per cent of these were rejected by the SystemAdministrator. Thirty nine responded making for an effective response rate of 11.2 percent. The total number of questionnaires that were returned was 50. The data wereanalysed using SPSS for Windows.

Clearly these response rates are low and both the “interview” and questionnairesamples are small and non-representative which limits the generalisability of thefindings. However “interview” and questionnaire responses were obtained from 12executives employed in Australia’s top 20 advertising agencies. For this reason, whilethe findings should be treated with some caution, we feel that they are not withoutconsiderable importance.

3.3 Method for the IT consulting studyThe research method used for this study was also adapted from the generativeresearch model described above. This research method combined both qualitative andquantitative methods in an overall research process, this is shown in the list below:

(1) Phase 1 – Developing Research Issues and Descriptive Research Model:. Conduct major and current review of literature.. Pre-test interview schedule (five interviews).. Data analysis and refine interview schedule.

Figure 1.Adapted generative

research process for themanagement consulting

study

Strategiccapabilities

1311

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

. Construct focus group procedure.

. Pre-test focus group procedure by conducting one session.

. Data analysis and refine focus group procedure.

. Conduct 15 non-standardised schedule interviews among CEOs, CIOs,services managers and clients of ERP companies.

. Conduct two focus group sessions with CEOs, CIOs, services managers andwith clients of ERP companies.

. Conduct qualitative data analysis to determine best practice strategies –content analysis and adapted repertory grid technique.

(2) Phase 2 – extending the model and quantitative analysis:. Develop web-based questionnaire.. Pre-test web-based questionnaire.. Data gathering from web-based survey. - 1,000 cross-sectional surveys on

consulting best practices were sent to CEOs, CIOs, services managers andclients – response rate was less than 5 percent (35 returns) resulting in afurther 300 surveys being sent out using snowballing sampling technique. Afurther 36 returns were received.

Rank Mean

Strategic management capabilityHiring of the right agency staff 1 2.12Vision on the part of senior management 1 2.12Good management of staff 3 3.10Leading by example 4 3.48Good business background of managers 5 3.71

General strategic capabilityServicing existing clients 1 3.84Ability to listen to the client 1 3.84Creative thinking 3 3.76Problem solving skills 4 3.54Ability to procure new business 5 3.52Honesty 6 3.48

Success indicatorClient retention 1 3.62Agency profitability 2 3.42Procurement of new clients 3 3.38Growth of the agency 4 3.31A good client list 5 3.12Client profitability 6 2.98Low agency staff turnover 6 2.98Awards for creativity effectiveness 8 2.47Billing 9 2.46

Notes: Italics have been used to elicit the common success drivers that are emphasized in theconclusion; For data entry, this scale was coded 1 ¼ ”Very important” to 4 ¼ “Totally unimportant”

Table II.Advertising agencyexecutives’ rankings ofthe strategic managementand general strategiccapabilities necessary foradvertising agencysuccess

MD49,8

1312

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

. Conduct content validity analysis and reliability checks using CronbachAlpha measures.

. Data processing and analysis – the categorical data were analysed usingSPSS Windows and suitable statistical tests applied. Chi-square tests ofindependence were used to test the relationship between the strategiccapabilities and indicators of consulting success. In testing the bivariaterelationships, every single strategic capability was tested against everyperformance indicator. The purpose was to determine which strategicconsulting success factors were related to one or more consulting skills.

. Interpretation of findings.

In Phase 1, the crucial themes/concepts leading to IT consulting success weregenerated from the target population. This was done by conducting 20 depthinterviews and three focus group sessions as can be seen in the list above. In Phase 2, aweb survey was developed and administered. This iterative process led to a final set ofbest practices and/or strategic capabilities, which is discussed in the findings section ofthis paper and they can be seen in Table III. Once more, a minimum of three referencesto, or supporters of, a best practice or capability was required for inclusion as an itemscale in the questionnaire.

Content validity (or face validity) was assessed in the IT study. A total of 35responses to the initial web-based survey were received from the ERP sector. A further36 responses were received in response to the use of a snowball sample. To make a casefor content validity, these latter 36 questionnaires were analysed and the resultscompared with those of the original 35 respondents. Results were similar for allquestions.

Reliability is the degree that a measure is free from error. Reliability is concernedwith the consistency of results (Zikmund, 2003). The Cronbach alpha measure wasused to test reliability. For Cavana et al. (2001, p. 324), “in general reliabilities of lessthan 0.60 are considered to be poor, those in the 0.7 range are acceptable, and thoseover 0.8 are good”. The cronbach alpha scores for relevant scales used in this researchranged between 0.68 for the scales “aim for revenue growth” and “develop sustainableprofits/cash flow” and 0.87 for “a model specifically developed for ERP companies toachieve consulting services best practice will be applicable in Australia” and “aconsulting services model that provides a framework for achieving best practices willenable ERP companies to improve their consulting services performance”.

3.4 Method for the law firm studyThe major focus of this study was to discover the strategic management capabilitiesthat provide law firms with a competitive edge in the market. The legal profession wasselected for our research study because it faces unique pressures. Firstly, theenvironment is intensively competitive (eg. Sirmon and Hitt, 2009). For example, in2006 there was a phenomenal increase of 31.8 per cent in the number of law firms inWestern Australia (WA). Secondly, the legal profession is widely known for having anegative public image. Thirdly, there is very little empirical research on whatconstitutes either drivers or indicators of success specific to the legal industry. Thisstudy also used a modified generative research strategy (see Figure 2). Following aliterature review, a content analysis of relevant legal firms’ websites was conducted in

Strategiccapabilities

1313

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

an effort to generate major themes and ideas from the population. The web sites of 22randomly selected law firms listed in the 2007 Blackstone Society Careers Handbookwere content analysed. This assisted the formulation of the interview schedule used inthe second phase to conduct 15 in-depth interviews. Thereafter, information from theliterature review and the qualitative data were used to construct a questionnaire, whichwas administered to all WA law firms in the last phase of the research. In total 419questions were sent out and 102 were returned. Items in the questionnaire canvassedviews on the relative importance of the 15 strategic capabilities and ten success factorsdeduced from the literature review, content analysis and depth interviews. They can allbe viewed in Table IV. A minimum of three references from the literature and/orsupporters from the qualitative research were required for inclusion in thequestionnaire survey.

Description of best practices for KFAs Weighted score

LeadershipSeek senior management commitment 72Encourage open and honest communication 70Lead through vision and values 45

ValuesDevelop customer’s trust 101Demand integrity 94Build lasting customer relationship 57Consulting skillsDevelop client-consultant communication 73Develop domain knowledge/product skills 72Build credibility/reputation of consultant 61

Consulting success factorsStrive for customer/client satisfaction 96Set clear expectations 61Achieve objectives agreed upon 54

AdaptabilityTailor implementation strategies for the type of customer being engaged 69Adapt to different situations with ease 59Anticipate change and respond proactively 55

Project management practicesManage project scope 116Manage project quality 89Provide senior management support for project manager 82ProfitabilityBuild a solid business pipeline 70Make money in consulting assignments 61Develop sustainable profits/cash flow 44

Customer focusStrive for customer satisfaction 126Become the trusted advisor 83Focus on client interest 44

Notes: Italics have been used to elicit the common success drivers that are emphasized in the conclusion

Table III.Summary of top threebest practices/capabilitiesfor key focus areas(KFAs)

MD49,8

1314

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

We also tested these data for reliability and validity. Some examples of cronbach alphascores for relevant scales used in this research to test for reliability are:

. “Practical solutions” and “problem solving” – 0.904;

. “Employee career development” and “employee retention” – 0.864;

. “Employee retention” and “recruitment” – 0.746;

. “Profit” and “revenue” – 0.826.

Cross-tabulations were also computed to test for content validity. The results of themain survey (which included the pre-test responses) were compared with the resultsfrom the responses received following the reminder letter. The results were almostidentical for all questions.

3.5 Method for the ASX top 500 studyIn this study the questionnaire was developed from an updated review of the literatureand from “interviewing” a sample of seven executives. Because the potentialinterviewees are busy business leaders employed by blue chip companies, they wereoffered the option of completing and returning the interview schedule electronically.All availed themselves of this opportunity. Thirteen strategic capabilities and 15success factors were identified from a minimum of three literary references and threesupporters in the qualitative research and are included in Table V. The finalquestionnaire was sent to the CEOs of Australia’s top 500 companies. Forty-one werereturned. After three weeks, reminders were mailed to a 10 per cent sample of thoseCEOs who had not responded. Just one was received.

Figure 2.Adapted generative

research process for thelaw firm study

Strategiccapabilities

1315

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Reliability tests were run before the questionnaire data were analysed. A Cronbachalpha coefficient of 0.66 was obtained for the scales “envisioning the future” and“making appropriate trade-offs between long- and short-term goals”. For the scales“communication with customer” and “broad understanding of customer’s needs”,Cronbacha alpha ¼ 0.802. For the scales “increased earnings per share” and “increasedshareholder return”, Cronbach alpha ¼ 0.663. From this we conclude that,notwithstanding the small sample size, this study is also reliable.

4. Results and discussion4.1 Strategic capabilities and successful management consultingThe first major study was a review of the strategic capabilities that lead tomanagement consulting success and it was conducted in the late 1990s (Kumar et al.,2000). While this is just over a decade ago, many of the strategic capabilities andsuccess factors deemed important then, still have currency in more recent research aswill be shown. The consultants came up with a list of 20 such strategic capabilities, anumber which far exceeded expectations. As researchers we were hoping for about ten,a more logical and workable number. However, that 20 strategic capabilities werefound is, in itself, significant. It indicates that the route to success is a complex one. The

Rank Score (points)

Strategic capability1 Client trust 792 Attuned to client wants/Needs 743 Legal expertise/Technical competence 644 Integrity and honesty 535 Quality of service 456 Reputation 437 Accessibility 358 Commercial approach 319 Reasonable rates/Fees 28

10 Efficiency 2611 Communication 2112 Employee retention 2113 Credibility 2014 Practical solutions 1715 Networking/building relationships 12

Success indicator1 Client satisfaction 1732 Client retention 963 Results/Outcomes for clients 854 Referrals 785 Profit 516 Employee satisfaction 387 Accrual of new work 298 Strong client base 259 Revenue 22

10 Growth 7

Notes: Italics have been used to elicit the common success drivers that are emphasized in the conclusion

Table IV.Top 15 strategiccapabilities and successindicators (weightedaverage) for law firms

MD49,8

1316

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

dearth of empirical data in this area, led to another unexpected direction: the search forperformance indicators of consulting success. Ten such indicators of performance werediscerned.

Each of the 20 strategic capabilities were then ranked based on consultants’responses (see Table I). The formula used to calculate the weighted score is:

Weighted Score ðWSÞ ¼X

ð3 £ RankNo1 þ 2 £ RankNo2 þ 1 £ RankNo3Þ

The overall points’ scores for the strategic capabilities provided in Table I weretherefore calculated as follows. If a respondent deemed a strategic capability to be themost important it was given a weighted score of three points. For second mostimportant, a score of two was awarded and one for third most important. All scoreswere then summed across the rankings of level of importance for all 20 capabilities.This method resulted in some capabilities being considered to be more important byconsultants than others. We also asked the participants in their research to rank theperformance measures, or indicators of success (see also Table I). A mix of “hard” and“soft” measures was considered by consultants to be necessary for success.Consultants were adamant in pointing out that financial indicators alone can never bethe ultimate measure of a successful consultant. Many consultants in fact indicatedthat their choice of profession was to reap many of the non-financial successes, namely,client satisfaction, personal satisfaction and building relationships in the form of repeatbusiness and referrals. As one consultant who was interviewed noted, “the day onegets bogged down looking at just a profit and loss statement and loses sight of theclient, is the day one loses the edge that makes for a successful consultant. Quitesimply, why should clients come to you, if you are not for them?”

Extent in yourorganisation

Importance forlong-term success

Mean score(5 ¼ pervasive)

Mean score(5 ¼ critical)

Scalea) Helping the customer envision the future (of his/herorganisation) 2.92 3.32b) Communication with customer 3.87a 4.26a

c) Broad understanding of the customers’ needs 3.87a 4.50a

d) Assisting the customer with implementation/installation 3.22 3.27e) Service culture 3.81a 4.19a

f) Services packaged with the sale 3.20 3.17g) Technical skills sets of staff 4.15a 4.15h) Marketing skills (of staff) 3.34 3.63i) Flexible work schedules for staff 3.24 3.12j) Innovation/design capability 3.51 3.73k) Strategic thinking at all levels of the organisation 3.22 3.68l) Unique/differentiated product 3.53 3.81m) Flexible to enable opportunism 3.63 3.80

Notes: Italics have been used to elicit the common success drivers that are emphasized in theconclusion; athe most highly rated items in the scale

Table V.The extent and degree of

importance of specificstrategic capabilities in

respondents’ top 500companies

Strategiccapabilities

1317

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

It is crucial to note that the analysis of consultant responses did not stop at theranking of these strategic capabilities and performance measures. After furtherstatistical scrutiny of the data, it was found that these strategic capabilities andperformance measures existed in a consulting web of reciprocal and mutually inclusiverelationships. Chi Square (x 2) tests of independence indicated that every function andskill and value was related to one or more success indicators ( p , 0.05)[1].

We cautiously contend that these tests re-emphasize that the roadway toconsulting success is a difficult and complicated one. This web suggests that noneof these functions or skills and values exist in isolation, that only when they areperformed together can there be real and long-term consulting success. Thesefindings are not meant to discourage those who would be management consultants.They are meant to make consultants aware of the complex reality of theirprofession. This begs the question whether other industries harbour the samecomplexity. Surely management consulting could not be the only industry in whichthe relationships of strategic capabilities and success factors are so intricate. It wasdecided in the next study to look at the strategic capabilities that relate to successin advertising agencies.

4.2 Strategic capabilities and advertising agency successA total of 64 senior executives employed in Australian advertising agencies, many ofthem top 25 and multinational firms, such as Badjar, Clemenger BBDO, DDB, GeorgePatterson Bates, Grey Worldwide, Leo Burnett, Saatchi and Saatchi, TMP, Young &Rubicam, and so on, were surveyed in 2001. They contend that the top five strategicmanagement capabilities necessary for advertising agency success are, in order: hiringthe right staff, senior management vision, good human resource management,leadership and business experience (see Table II).

They also believe that other more general strategic capabilities related to successare servicing existing clients, the ability to listen to the client, creative thinking,problem solving skills, procurement of new business and honesty. Knowledge of theclient’s business was thought to be an additional important general strategic capabilityby some of the respondents who completed the open-ended question at the end of thequestionnaire.

Lastly the respondents rated these indicators of success – client retention, agencyprofitability, growth of the agency, procurement of new clients and a good client list –as the five most important (see Table II).

It was not possible to test for relationships between strategic capabilities andindicators of agency success owing to the low response and resultant violation ofstatistical testing assumptions. However, while noting the possibility of Type 1 error,similar research conducted in the Management, IT consultancy and Legal fields (seeabove and in the next section) showed that all (in the case of the ManagementConsulting and Legal Industries) or many (in the case of the IT Consulting sector)strategic capabilities were related to at least one success indicator in a complex web ofinterrelationships. Therefore it is tentatively concluded that advertising agenciesshould implement all of the strategic management and general strategic capabilities inorder to achieve success. Strategic capabilities and their relationship to success in ITconsultancy formed the subject matter of our third study and we discuss the findingshere.

MD49,8

1318

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

4.3 Strategic capabilities for IT Consulting successThe third study in our series on strategic capabilities and organisational success wasconducted over a three-year period from 2003-2005 (see Simon et al., 2010). It aimed todiscover the strategic capabilities that relate to consulting success in the enterprisesoftware environment and developed a blueprint for best practice consulting servicesfor companies operating in the Australian Enterprise Resource Planning (ERP)software environment. This research too was based on a modified generative researchdesign. Interviews and focus group sessions were conducted to assess the state of theERP market in Australia, and to determine the initial capabilities required byAustralian ERP consulting services companies to achieve success. The data gatheredwere also used to formulate a web-based survey. Chi square (x 2) tests of independenceindicated that 38 (tentative) relationships between consulting skills and success factorswere significant ( p , 0.075) emphasizing the point that success may be contingentupon getting a complex web of relationships correct as was seen in the managementconsulting study.

Based on the findings of the survey, Key Focus Areas with associatedcapabilities/best practices were established (see Table III). The data were rankedusing the same process and formula described earlier.

4.4 Strategic management capabilities that drive West Australian law firm successFourthly we researched capabilities and successful performance of WA law firms in2007 (Moffat, 2007).

Qualitative findingsStrategic capabilities and success indicators (interviews). The combined results of aliterature review, content analysis and interviews revealed 25 strategic capabilities and13 indicators of success (the top 15 capabilities and top ten success factors can be seenin Table IV) and are discussed shortly. All of the interviewees were of the view thatthere is a nexus between these strategic capabilities and performance indicators. Theseideas were explored further in the analysis of the questionnaire data.

Quantitative findings from the questionnaire survey.Strategic capabilities. The 25 strategic capabilities generated by the literature

review, content analysis and interviews were assessed in the questionnaire for theirdegree of importance in achieving law firm success. Respondents were asked toindicate the extent to which the strategic capabilities were implemented or promoted intheir law firm to increase success. The respondents were also asked to rank the threemost important strategic capabilities for their law firm. These initial rankings wereused to calculate weighted scores (based upon three levels of importance) for thestrategic capabilities, which were subsequently ranked based on the number of pointsaccumulated using the same method and formula described above (see Table IV).

The five most crucial strategic capabilities for WA law firm success, in descendingorder, are client trust, being attuned to client wants/needs, legal expertise/technicalcompetence, integrity and honesty, and quality of service. Given the nature of the workof lawyers, a relationship based on trust between the lawyer and client is essential sothat lawyers elicit all necessary information to ensure that the best result is obtainedfor their client. Being attuned to client wants/needs includes recognition of a client’sbusiness needs (Palihawadana and Barnes, 2004). The importance placed on thestrategic capability of legal expertise/technical competence is logical, given that it is a

Strategiccapabilities

1319

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

fundamental basis upon which a lawyer is engaged (Palihawadana and Barnes, 2004).Integrity and honesty are essentially ethical considerations. Ethics are paramount inthe legal profession and touch every dimension of a lawyer’s work. Issues such asconfidentiality and maintaining legal professional privilege are particularly pertinentto the legal profession. The importance of quality of service is not surprising given thatthe legal profession is a de facto service provider.

Indicators of success. The 13 performance measures emerging from the literaturereview, content analysis and interviews were canvassed in the questionnaire survey fortheir degree of importance in signifying law firm success. Respondents were also askedto rank the three most important indicators of success for their law firm. The top fiveperformance measures employed by WA law firms were, in descending order, clientsatisfaction, client retention (White et al., 2007), results/outcomes for clients, referralsand profit. The first four of these revolve around the client and are all interlinked.While this is not surprising given that the legal industry is part of the service sector,what is noteworthy is that financial, or “hard” indicators do not appear to be asimportant as these “soft” or non-financial indicators. Only the fifth ranked successindicator in Table IV is a financial (or “hard”) performance measure. Distinct emphasisis placed on “soft” or non-financial indicators in the legal profession which refutes thewidely held view that traditional financial measures dominate. However, firmsoperating in the service sector should harness both forms to ensure success (Heskettet al., 1994; Kaplan and Norton, 2005).

Relationship between strategic capabilities and performance measures. Importantly,chi-square (x 2) tests of independence revealed that every strategic capability wassignificantly related to at least one success indicator. The general hypothesis tested inthis study was that there is a relationship between strategic capabilities and theindicators of organisational success in the legal profession. The specific hypotheseswere tested using x 2 tests of independence. Every single strategic capability wasassessed against every indicator of law firm success, which comprised of both financialand non-financial measures (Heskett et al., 1994, Kaplan and Norton, 2005). Thisresulted in 325 hypotheses, of which 110 produced a significant result ( p , 0.075). Ifwe made the Bonferroni adjustment to negate the possibility of Type 1 error, thesignificance level that we should have tested at is 0.05/325 ¼ 0.00015. Therefore weagain acknowledge that the chi-square test results are tentative. Hence we note withcaution that the road to success is not a simple one because all the strategic capabilitieswere significantly related to at least one performance measure. However, not all thestrategic capabilities were related to both “hard” and “soft” indicators of success.

Factor analysis. Factor analysis was also conducted but proved to be of limited usebecause the strategic capabilities loaded on many (six) factors. Essentially this appearsto indicate that there are not just one or two overarching themes for the strategiccapabilities, but several. It is possible to infer from this that law firms require a rangeof many disparate strategic capabilities to gain a competitive edge in a competitiveindustry (Moffat, 2007).

To summarise, in order for law firms to gain a competitive edge in the market, it isnecessary for them to implement a diverse portfolio of strategic capabilities, which areall related to one or more of the indicators of law firm success. The success indicatorsare both financial and non-financial, with a distinct emphasis being placed on the latterby the WA legal industry. It could be argued that paradoxically, if all law firms

MD49,8

1320

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

implement these capabilities then they will no longer be rare and difficult to imitate.This could lead to strategic herding for Natterman (2000a) where firms all “begin tooccupy the same strategic ground” (Natterman, 2000b, p. 17). For this reasonCummings and Angwin (2004, p. 21) suggest that companies or firms need“individualized approaches that seek both economies of scale and unique identities inthe marketplace”. Therefore lawfirms, and indeed all other organisations, need toindividualise their strategic capabilities. Clearly the firms that develop outstandingcapabilities should be more successful.

The five studies described and discussed above were all located in business andprofessional service industries, namely, management consulting, advertising,information technology and the legal profession. We therefore decided to take thenext logical step and conduct this research among a sample of Australia’s top 500companies listed on the Australian Stock Exchange (ASX). We wanted to see ifwhat we had discovered in the five business and professional service industrieswould apply to a wider spectrum of resources, banking, manufacturing, insurance,property, communication and other industries. So the capstone of our research overthe years is a survey of the strategic capabilities leading to success in a sample ofASX top 500 companies and we discuss the results of this last study at thisjuncture.

4.5 Strategic capabilities and success in ASX top 500 companiesThe final study in the series investigated strategic capabilities for success in a sampleof Australia’s top 500 ASX listed companies. We interviewed and sent questionnairesto CEOs and other senior leaders in these top companies also in 2007. The findingsshow what the leaders of these very profitable listed companies consider the drivers ofbusiness success to be and also what the actual success indicators are (see Tables Vand VI).

Scale Mean (4 ¼ top)

Criticallyimportant

(%)Important

(%)

Not veryimportant

(%)

Totallyunimportant

(%)

Increased profit 3.67 2 69 29 2 0Increased revenue 3.19 29 62 10 0Increased market share 2.74 14 50 31 5Increased earnings per share (EPS) 3.57 3 57 43 0 0Increased share price 3.43 48 48 4 0Increased shareholder return 3.83 1 83 17 0 0Increased growth 3.19 36 47 17 0Improved safety and security 3.05 32 42 26 0Increased job satisfaction 3.12 19 74 7 0Increased staff retention 3.21 33 55 12 0Reduced staff absenteeism 2.54 2 54 39 2Increased staff engagement 3.29 38 52 10 0Increased customer referrals 3.05 37 39 17 7Increased customer satisfaction 3.46 4 56 37 5 2Improved teamwork 3.45 5 45 55 0 0

Notes: Italics have been used to elicit the common success drivers that are emphasized in the conclusion

Table VI.Rating of success

indicators according tohow important leaders of

top 500 companiesconsider them to be

Strategiccapabilities

1321

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Strategic capabilities considered pervasive in organisations are technical skills’ sets ofstaff (Cegielski, 2008) and a service culture focusing on the customer (Shah et al., 2006).These are also the most critical strategic capabilities for long-term success, achieved byincreased shareholder return, profit and earnings per share as well as increasedcustomer satisfaction and improved teamwork (Boynton and Fischer, 2007; Kaplanand Norton, 2005; Lorsch and Clarke, 2008).

As was the case with the advertising agency study, it was also not possible to testfor relationships between strategic capabilities and indicators of success owing to thelow response rate and resultant violation of statistical testing assumptions. However asmentioned, similar research conducted in the management consultancy, IT and legalfields showed that many strategic capabilities were related to at least one successindicator in a complex web of interrelationships. Therefore it was tentativelyconcluded that ASX Top 500 companies should also implement all of the strategiccapabilities in order to achieve success.

5. ConclusionIn our introduction, we said that we were going to debunk Carpenter’s (2010)contention that there is no playbook to follow for managing effectively in tougher timesthan even Sirmon and Hitt (2009) imagined. For managers, this playbook is constructedfrom the six excellent strategic capabilities that Australian executives, across manydisparate industries, consider critical for success. We showed how Mercedes Benz usesa portfolio of unique capabilities to sell their cars to discerning customers and this isalso true for all successful businesses. The conclusion is clear – in order for anorganisation to succeed, it should take cognisance of the common threads in thestrategic capabilities across the five studies discussed in this paper. It washypothesized that common strategic capabilities would emerge from the five studies.These common threads have been highlighted in the tables, which summarise the mainfindings of the five studies and they are:

(1) quality of service including customer/client service and the need to listen to andunderstand the customer;

(2) good leadership and vision; which

(3) encourages innovation and creativity;

(4) selection and retention of good staff with good technical skills, credibility,integrity and honesty;

(5) excellent differentiated product(s) or service(s); and

(6) adaptability and flexibility.

These strategic capabilities regularly appear in the management literature, e.g. Kumaret al., 2000 – all of these capabilities; Lagrosen and Lagrosen, 2007 and Teece et al.,1997 – the customer; Sarros and Santora, 2001 – leadership; Newey and Zahra, 2009,McWilliams and Siegel, 2000 and Yeoh and Roth, 1999 – integrity and corporateresponsibility, and innovation achieved through product or service development orR&D; Pfeffer, 1999 and Lambe et al. 2002 – employees with special skills; and Mussonand Tietze, 2009, Rundle, 1997 and Sher and Lee, 2003 – flexibility and adaptability.However what is illuminating is that the six threads were generated not only by themanagement literature but also by the target populations in five very different

MD49,8

1322

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

industries. Furthermore, Australia emerged from the global financial crisis relativelyunscathed and managed to avoid a recession. Hence the strategic capabilities deemedimportant by Australian executives are almost by definition valuable for otherbusiness leaders in the world. So the bottom line is that by developing and establishingthese strategic capabilities in an organisation, the result should be increased profits,growth, market share, shareholder returns and customer and staff satisfaction. Itshould not be difficult for firms to do this. Such capabilities could easily be “found inthe rare, imperfectly imitable, and non-substitutable resources already controlled by afirm” (Barney, 1991, p. 117). Maximization of this potential should yield the desiredresults as much of the literature argues that the trick is for firms to realize theirpotentials in constraints. In other words how firms develop and maximize theirresources to create competitive advantage is the key (e.g. Helfat, 1997; Iansiti, 1993;Lambe et al., 2002 and Sher and Lee, 2003). As Yeoh and Roth (1999, p. 638) havewritten, “we argue that it is the firm’s unique capability to deploy or transform itsresources that results in sustained competitive advantage”. Training them in, andrewarding them for, demonstrated excellence in the six common strategic capabilitiesshould conduce to a sustained competitive advantage. In particular, given that all six ofthese capabilities are likely related to the success factors (our second hypothesis),resources (staff) who can show that they excel in all six are the most desirable.Traditional HRM has advocated selecting the right people for the job. What our studiesshow, in particular the bivariate analysis of strategic capabilities and performancemeasures, is that firms will secure a competitive advantage even in tough economictimes if they can select or train the really right new, or existing, people for the job.

Note

1. We acknowledge that this web is constructed from the results of so many chi-square teststhat some may have been significant by chance alone so there is a risk of Type 1 error. TheBonferroni adjustment of alpha/n for the whole family of hypotheses ¼ 0.05/210. So wewould have to test at the 0.0002, rather than 0.05 level. A total 27 of the 210 hypotheses weresignificant at , 0.002 so we issue a caveat that the chi-square test results are tentative.

References

Ambrosini, V., Bowman, C. and Collier, N. (2009), “Dynamic capabilities: an exploration of howfirms renew their resource base”, British Journal of Management, Vol. 20, S1, pp. S9-S24.

Barney, J. (1991), “Firm resources and sustained competitive advantage”, Journal ofManagement, Vol. 17 No. 1, pp. 99-120.

Bharadwaj, A.S. (2000), “A resource based perspective on information technology capability andfirm performance: an empirical investigation”, MIS Quarterly, Vol. 24 No. 1, pp. 169-96.

Boynton, B. and Fischer, B. (2007), “Leading all-star teams: virtuoso teams get virtuoso results”,Leadership Excellence, Vol. 24 No. 4, p. 13.

Carpenter, M.A. (2010), Managing Effectively Through Tough Economic Times, Pearson, UpperSaddle River, NJ.

Cavana, R., Delehaye, B. and Sekaran, U. (2001), Applied Business Research: Qualitative andQuantitative Methods, John Wiley & Sons, Milton.

Cegielski, C.G. (2008), “Toward the development of an interdisciplinary information assurancecurriculum: knowledge domains and skill sets required of information assuranceprofessionals”, Decision Sciences Journal of Innovative Education, Vol. 6 No. 1, pp. 29-49.

Strategiccapabilities

1323

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Cummings, S. and Angwin, D. (2004), “The future shape of strategy: lemmings or chimeras”,The Academy of Management Executive, Vol. 18 No. 2, pp. 21-36.

Davidson, P., Simon, A., Woods, P. and Griffin, R. (2009), Management: Core Concepts andApplications, John Wiley & Sons, Milton.

Deeds, D.L., DeCarolis, D. and Coombs, J. (1999), “Dynamic capabilities and new productdevelopment in high technology ventures: an empirical analysis of new biotechnologyfirms”, Journal of Business Venturing, Vol. 15 No. 3, pp. 211-29.

Eisenhardt, K.M. and Martin, J. (2000), “Dynamic capabilities: what are they?”, StrategicManagement Journal, Vol. 21 Nos 10/11, pp. 1105-21.

Helfat, C.E. (1997), “Know-how and asset complementarity and dynamic capabilityaccumulation: the case of R&D”, Strategic Management Journal, Vol. 18 No. 5, pp. 339-60.

Heskett, J.L., Jones, T.O., Loveman, G.W., Sasser, W.E. and Schlesinger, L.A. (1994), “Putting theservice-profit chain to work”, Harvard Business Review, Vol. 72 No. 2, pp. 164-74.

Hubbard, G., Pocknee, G. and Taylor, G.A. (1996), Practical Australian Strategy, Prentice Hall,Sydney.

Hubbard, G., Samuel, D., Heap, S. and Cocks, G. (2007), The First XI: Winning Organizations inAustralia, 2nd ed., John Wiley & Sons, Milton.

Iansiti, M. (1993), “Real-world R&D: jumping the product generation gap”, Harvard BusinessReview, May-June, pp. 138-47.

Kaplan, R.S. and Norton, D.P. (2005), “The balanced scorecard: measures that driveperformance”, Harvard Business Review, Vol. 83 No. 7, pp. 172-81.

Kumar, V., Simon, A.M. and Kimberley, N. (2000), “Strategic capabilities which lead tomanagement consulting success in Australia”, Management Decision, Vol. 38 No. 1,pp. 24-35.

Lagrosen, S. and Lagrosen, Y. (2007), “Exploring service quality in the health and fitnessindustry”, Managing Service Quality, Vol. 17 No. 1, pp. 41-53.

Lambe, C.J., Spekman, R.E. and Hunt, S.D. (2002), “Alliance competence, resources and alliancesuccess: conceptualization, measurement and initial test”, Academy of Marketing Science,Vol. 30 No. 2, pp. 141-58.

Lorsch, J.W. and Clarke, R.C. (2008), “Leading from the boardroom”, Harvard Business Review,Vol. 86 No. 4, pp. 104-11.

McKelvie, A. and Davidsson, P. (2009), “From resource base to dynamic capabilities:an investigation of new firms”, British Journal of Management, Vol. 20, S1, pp. S63-S80.

McWilliams, A. and Siegel, D. (2000), “Corporate social responsibility and financial performance:correlation or misspecification?”, Strategic Management Journal, Vol. 21 No. 5, pp. 603-9.

Macher, J.T. and Mowery, D.C. (2009), “Measuring dynamic capabilities: practices andperformance in semiconductor manufacturing”, British Journal of Management, Vol. 20,pp. S41-S62.

Moffat, P. (2007), “The art of war to business: strategic capabilities and their relationship to thesuccess of West Australian law firms”, unpublished Honours thesis, the University ofWestern Australia.

Musson, G. and Tietze, S. (2009), “International perspectives on flexibility: overview andintroduction”, British Journal of Management, Vol. 20, S1, pp. S132-5.

Natterman, P. (2000a), “Best practice does not equal best strategy”, McKinsey Quarterly, Vol. 2,pp. 2-4.

Natterman, P. (2000b), “When benchmarking fails”, Strategic Direction, Vol. 16, pp. 17-19.

MD49,8

1324

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Newey, C.R. and Zahra, S.A. (2009), “The evolving firm: how dynamic and operating capabilitiesinteract to enable entrepreneurship”, British Journal of Management, Vol. 20, pp. S81-S100.

Palihawadana, D. and Barnes, B. (2004), “Client loyalty and defection in the corporate legalindustry”, The Service Industries Journal, Vol. 24 No. 4, pp. 101-14.

Peteraf, M. (1993), “The cornerstones of competitive advantage: a resource-based view”, StrategicManagement Journal, Vol. 14 No. 3, pp. 179-91.

Pfeffer, J. (1999), “Put the spotlight on personnel”, Security Management, Vol. 43 No. 8, pp. 31-4.

Robins, J. and Wiersema, M.F. (1995), “A resource-based approach to the multi-business firm:empirical analysis of portfolio interrelationships and corporate financial performance”,Strategic Management Journal, Vol. 16 No. 4, pp. 277-99.

Rundle, S. (1997), “Managerial responsiveness: flexibility, adaptability and responsiveness(‘FAR-ness’) as the key success factors in market entry in the South-East Asian GrowthWedge – Indonesia, Malaysia and Singapore”, unpublished PhD thesis, MonashUniversity, Melbourne.

Sarros, J.C. and Santora, J. (2001), “The transformational-transactional leadership model inpractice”, Leadership & Organization Development Journal, Vol. 22 No. 8, pp. 383-93.

Shah, D., Rust, R.T., Parasuraman, A., Staelin, R. and Day, G.S. (2006), “The path to customercentricity”, Journal of Service Research, Vol. 9 No. 2, pp. 113-24.

Sher, P.J. and Lee, V.C. (2003), “Information technology as a facilitator for enhancing dynamiccapabilities through knowledge management”, Information Management, Vol. 41,pp. 933-45.

Simon, A. (2010), “Resources, dynamic capabilities and Australian business success”, Journal ofGlobal Business and Technology, Vol. 6 No. 2, pp. 12-31.

Simon, A., Schoeman, P. and Sohal, A. (2010), “Prioritised best practices in a ratified ConsultingServices Maturity Model for ERP consulting”, Journal of Enterprise InformationManagement, Vol. 23 No. 1, pp. 100-24.

Simon, A., Sohal, A. and Brown, A. (1996), “Generative and case study research in qualitymanagement: theoretical considerations”, International Journal of Quality & ReliabilityManagement, Vol. 13 No. 1, pp. 31-41.

Sirmon, D.G. and Hitt, M.A. (2009), “Contingencies within dynamic managerial capabilities:interdependent effects of resource investment and development on firm performance”,Strategic Management Journal, Vol. 30 No. 13, pp. 1375-94.

Sohal, A., Simon, A. and Lu, E. (1996), “Generative and case study research in qualitymanagement: practical examples”, International Journal of Quality & ReliabilityManagement, Vol. 13 No. 2, pp. 76-88.

Tariquzzamam, A.T.M., Alam, Q. and Majumdar, N. (2008), “Sub-prime crisis and its aftermath –a threat to global capitalism”, CD Proceedings of the 22nd ANZAM Conference, Auckland,2-5 December 2008, p. 4.

Teece, D.J., Pisano, G. and Shuen, A. (1997), “Dynamic capabilities and strategic management”,Strategic Management Journal, Vol. 18 No. 7, pp. 509-33.

White, J.B. (2002), “Legal knowledge”, Harvard Business Review, Vol. 115 No. 5, pp. 1396-431.

White, T.B., Lemon, K.N. and Hogan, J.E. (2007), “Customer retention when the customer’s futureusage is uncertain”, Psychology and Marketing, Vol. 24 No. 10, pp. 849-70.

Yeoh, P-L. and Roth, K. (1999), “An empirical analysis of sustained advantage in the USpharmaceutical industry: impact of firm resources and capability”, Strategic ManagementJournal, Vol. 20 No. 7, pp. 637-53.

Strategiccapabilities

1325

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

Zander, U. and Kogut, B. (1995), “Knowledge and the speed of the transfer and imitation oforganizational capabilities: an empirical test”, Organization Science, Vol. 6 No. 1, pp. 76-92.

Zikmund, W.G. (2003), Business Research Methods (7E), Thomson South Western, Ohio, IL.

Corresponding authorAlan Simon is an Associate Professor in the University of Western Australia’s Business School.He teaches Management & Organisations and Managing Organisational Change toundergraduate students and Business Research Methods and Strategic Capabilities &Organisational Success to graduate students. He also has his own successful managementconsulting practice. Alan Simon can be contacted at: asimon@uwa.edu.au

MD49,8

1326

To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)

This article has been cited by:

1. Antonia Mohedano-Suanes, María Mar Benavides-Espinosa. 2013. Technology transfer, specificlocal knowledge and entrepreneurial partner control in international joint ventures. InternationalEntrepreneurship and Management Journal 9, 95-112. [CrossRef]

Dow

nloa

ded

by U

NIV

ER

SIT

Y O

F M

EL

BO

UR

NE

At 1

8:34

01

June

201

5 (P

T)