Managers' Forum ~ Business Case Reviews

    The business case that I have decided to review is Global Leadership Skills and Reputational Capital: Intangible Resources for Sustainable Competitive Advantage.  The main focus of this case is make the reader aware that today’s global economy challenges corporate executives to compete with anybody, anywhere, and at any time.  Furthermore, companies face the problem of having to provide high quality goods and services at a low cost.  In
addition, these low cost high quality production runs must be made in a timely manner while still having to concentrate on stimulating workforce moral and collective learning techniques.  The authors of this case then
claim that corporations can no longer just increase domestic profitability without having to worry about their global reputation and environmental impact.

    According to the article, business executives enhance intangible assets when they apply their leadership styles and substance skills globally.  One such intangible asset is corporate reputation, which can help leverage a firm’s global competitive advantage.  For example, Coca Cola’s has always tried to focus on branding; as a result, they have enhanced their brand name which has lead to their global competitive advantage.  On the other and, sometimes corporations focus on just making a global short-term profit. These actions have been linked to outcomes such as social disintegration, low employee morale, and “predatory” financial practices.  This process leads to an actual diminishing of reputations as intangible assets.  To achieve a global competitive advantage, a global strategic business unit must implement a value creating strategy that can not be replicated by any other firm.

    The article lays down a foundation to achieve a global competitive advantage, this is known as the Strategic Resource Model.  According to this model, a competitive advantage may be sustainable if intangible and tangible
internal skills (what the company can do) and assets (what the company has) are managed properly.  The focus is internal since corporations only have control on the internal environment.  Skills consist of using cumulative
experience and know-how, and recognizing cultural differences through team learning and manage change.  Assets consist of various plants, equipment, land, intellectual property rights, and ability of maximize shareholders
wealth.  These assets and skills are then cultivated into core capability differentials.  When harvested, differentials lead to sustainable global competitive advantages that must continuously be monitored.
 

Joseph A. Petrick, Robert F. Scherer, James D. Brodzinski, John F. Quinn, and M. Fall Ainina.  "Global Leadership Skills and Reputational Capital: Intangible Resources for Sustainable Competitive Advantage." Academy of Management Executives.  U.S.A.: Feb 1999. Vol. 13.

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