Organizational Capability:

The firm’s ability to manage people

to gain competitive advantage.

Organizational Capability:


Traditional Sources of Competitive Advantage:


Strategic planning typically focuses on resource allocation.

Organizational capability focuses on achieving goals through employee commitment and competence.

Two criteria for competitive advantage:

1) adding perceived value to the customer

2) offering uniqueness that cannot be easily imitated by a competitor


Organizational Capability enhances perceived customer value in three ways:

1) Responsiveness: the ability of the business to understand and meet customer needs more quickly than competitors

2) Relationships: the ability of a business to develop enduring relationship between customer and employee

3) Service quality: the ability of business to design, develop and deliver service that meets or exceeds customer expectations.

Organizational Capability enhances uniqueness because it is difficult to imitate: