Key factors of sustainable firm performance: a strategic approach
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The world is witnessing striking changes since the development of information technologies and their increased significance for business environments. These changes require firms to rethink the validity of their traditional methods for competing and for generating value. Traditional competition has already lost much of its effectiveness, and the uncertainty, dynamism, volatility, and impermanence of the new commercial environments are reconfiguring the foundations and premises of business competition. In this new environment, it is necessary to re-identify the factors that affect firm performance – to abandon classical perspectives and analyze those factors that play key roles in business performance from a new strategic viewpoint. Performance is a multidimensional concept that defines the success of a business as well as its level of achieving business objectives. Traditionally firms consult measures of performance like annual sales and firm size. Factors such as efficiency and effectiveness may be added to these two dimensions later. More recently, new dimensions of performance (such as utilization of inputs, quality, innovation, and quality of work life) have been added to the performance criteria, and the idea of what constitutes successful, effective, or sustainable performance has been very much broadened. Today, dimensions like employee behavior, market share, product or market leadership, and public responsibility must all be included in an evaluation. This book takes a strategic approach to explaining what key factors determine sustainable firm performance under the ruthlessly competitive conditions of our time. These key factors include creating knowledge, managing knowledge, managing environmental uncertainty, generating organizational intelligence, producing organizational knowledge, and strategically managing the supply chain. The main objective of this book is to help firms develop new strategies for outperforming their rivals in a rapidly evolving competitive environment. This book differs from other studies in that it brings a strategic viewpoint to the concept of sustainable firm performance – it looks for ways firms can develop and exploit their advantages and achieve their overall goals. Managers who read this book will learn to identify and analyze the key factors that make their firms effective, successful, and sustainable over time.