Porter’s Competitive Advantage and Chandler’s Scale and Scope Essay

Essay on Porters Competitive Advantage of Nations and Chandler’s Scale and Scope in the performance of national economies

Japan’s productivity for instance was at 9.4% while France and German were at 5.4 and 5.6 % respectively (Yamamura & Streeck 2003). Ideally, Japan has had competitive advantage over USA when it comes to the production of cars. The reduction of US productivity, hence, in ability to compete internationally can be attributed to various factors. For instance, differences in work practices between United States, Germany and Japan, which demonstrates that culture, can greatly affect a country’s competitive advantage with respect to a number of business structures. Brakman et al. (2006) focused on the importance of a country’s culture and its effect on Porter’s diamond model. Porter supports the idea that a nation’s culture is

Porter supports the idea that a nation’s culture is vital factor in determining its competitive advantage. However, it fails to integrate culture in the diamond model. Culture has a huge effect on linkages between similar sectors, thus, to some degree Porter’s framework take into consideration the way in which culture show differences in countries business structures and comparative performance. When Japan is compared to Northern and Western Europe, is a strong economy. Differences in culture need various organizational strategies to address the issues. That is, economic landscape of a particular nation may be influenced by cultural practices (Schmitz 1995).

Essa on Porters Competitive Advantage of Nations and Chandler’s Scale and Scope in the performance of national economies

Moreover, Gerschenkron (1962) theory demonstrates that history play a crucial role in assessing economic success and performance of a country. But Porter ignores the purpose of history in diamond framework. With respect to Germany and Japan, there is a direct linkage between previous militarism and current industrialization that is prevailing. Militarism has resulted in industrial excellence through creation of culture of discipline in the labor market for Japan and Germany. Additionally, these nations competitive advantage is a result of unethical past militarism (Fruin, 1994).  Most importantly, historical occurrences may be distinct a nation that determines its character (Whittington, Mayer & Curto 1999). The incident of incursion and insurgency is a common experience among a number of success countries around the world. Porter’ model has various limitations.

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For instance, diamond framework was developed from examining the historical events of about 100 sectors, however to conduct this historical even it required some written undertaking to enable these assessments. Furthermore, while it would need organisation’s history, the references or acknowledgements show the histories of 100 sectors. Those histories used in the diamond framework are simply sketches illustrating instead of testing theory (Hannah 1991). On the other hand, Chandler supports the idea that history pays an essential role for not just a firm but also a sector (Chandler, Hagstrom & Solvell, 1999). Additionally, Chandler states that contemporary assessment of a country of business should be done in accordance with past histories.

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