Organizational success depends on several factors, some of which may actually be controlled by employers, others which definitely are beyond their control in that related to the external environment and influenced by human perceptions. In order for employers to attain sustainable competitive edge, therefore, they should not only constantly assess and review their ability to stay competitive, but also unrelentingly scan the external environment. The former activity - after all, would be sorely pointless if disconnected from the latter.
The contextual factor
It is an axiomatic fact that the external environment in which employers operate and the incessant, quickening pace change occurs make a remarkable impact on organizations. Employers are prompted to constantly review and adapt their business structure, the approach working activities must be performed, their business strategy and ultimately their corporate culture accordingly.
The contextual factor and its dynamics increasingly influence the way organizations make and review their plans to gain and enhance their competitive edge potential in the market. Businesses strengths and weaknesses are affected by the ever-changing external environment; employers consequently devote close, special attention to environmental scanning tools, like the PESTLE analysis.
Whilst the SWOT analysis, enabling employers to “look in” for strengths and weaknesses and “look out” for opportunities and threats, is rather uniformly applied by employers over time, it can be argued that the main focus of the PESTLE analysis has been subject to change with the passing of time.
In the past, PESTLE analyses were mostly focusing on “political” and “economic” factors, whereas more recently, by reason of the unrelenting technological advances and pervading use of technology in the workplace, employers have paid closer attention to the “technological” factor. “Digital transformation” is an expression most of the employers are acquainted with and behind the projects implemented by many organizations.
Nowadays and highly likely even more in the years to come, the “social” and “environmental” factors represent and will represent the main focus of PESTLE analyses. In many organizations, for example, the expression “digital transformation” has been already replaced with the ESG acronym, which stands for Environment, Social (corporate) Governance. Many employers are therefore already developing and implementing project plans aiming at offering their customers sustainable and environmentally friendly products and services.
The “political” factor has invariably played a significant role and unquestionably will continue to play a significant role in PESTLE analyses; similarly, the legal factor should be regarded as a constant, inescapable component of any environmental scanning tool. Like in the ESG case, not always employers’ choices are actually made regardless of the influence exerted by the regulatory framework in force.
The fact that the environmental and social factors
are destined to be the main focus of environmental scanning tools for the years
to come does not entail by any means that employers can neglect or pay lip
service to the other factors encompassed in the environment scanning tool they may
decide to use. Technological advances, for instance, definitely help employers
pursue their intended strategies, but also pose serious threat in terms of
cybersecurity. To secure appropriate execution of their business strategy, organizations
need thus to pay close attention to technology also in order to effectively
protect their ICT assets.
Table A - Environment Matrix
Significant factors coming into play
Paying close attention to the contextual factor does represent a means to an end, not the end itself. Yet the one size does hardly fit all, employers should therefore carefully analyse the information they gather and take action accordingly, taking heed of their specific circumstances and distinctiveness.
To gain sustained competitive edge, employers should not only constantly review and adapt their business model, but also develop and foster strong cultures, functional to the pursuance of their intended strategy, which need then to be effectively, appropriately executed.
Once employers identify and develop the
appropriate business model, strategy development, strategy execution and a
strong culture may seem to be the only key components of a recipe for sustainable
success, but in order for employers to actually gain sustained competitive
edge, they need to consider some additional crucial factors.
Table B – Sustained Success Key
Factors
The widespread use of the Internet and social media, and the ease and speed information can nowadays be conveyed accounts for the general public to take into consideration several facts, elements and factors when making their purchase decisions.
Corporate Culture Vs Organizational Climate
Corporate culture does play a crucial role in supporting strategy execution. Organizational values and beliefs or as aptly summarized by Furnham and Gunter (1993) “the way we do things around here,” are of paramount importance for the pursuance of any organization strategy. Notwithstanding, the widely held belief that organizational culture can make or break an employer attempt to successfully pursue its intended strategy can only be partially backed up.
Inasmuch as employers develop and foster organizational culture to influence individual behaviour in the workplace, it is indeed the way employees interpret and translate organizational culture into practical behaviour and actions, that is, organizational climate, which strongly affects the way they behave and act in the workplace.
Corporate culture is essentially concerned with corporate values and beliefs as well as with the behaviour, attitudes, inclination and views, which employers expect employees to exhibit, embrace and share to successfully pursue their intended strategy. Organizational climate is concerned with individual genuine feelings and perceptions of the values and beliefs employers aim at fostering in the workplace. Not always employees’ perceptions are perfectly in line with employers’ expectations.
It may be argued that when it happens corporate culture definition perfectly matches that provided by Herb Kelleher, former Southwest Airlines CEO, during a conference on corporate strategy in New York City in the late 1980s (Taylor, 2019): “Culture is what people do when no one is looking.” In this case, employees genuinely embrace corporate culture insofar as living it regardless of their Manager or any other co-worker presence.
Corporate culture can effectually help employers pursue their intended objectives and achieve competitive edge only when corporate values and beliefs, and the way things should be done in the workplace perfectly coincide with employees values, beliefs and the way they would like to do things in the workplace.
Consistency and ethics should be regarded as the underpinning tenets of corporate culture, if employers talk the talk, but they do not walk the walk it is hardly likely that organizational climate may actually match and support corporate culture, albeit this has been nicely developed and formulated on paper.
The influence of corporate image and reputation
With an estimated 60% of the world population having access to the Internet in 2021 (The UN specialized agency for ICTs, November 2020) information circulation is rising dramatically, despite unevenly across different regions and countries. The Internet and social media make it extremely easy for consumers to access any kind of information concerning organizations, not necessarily directly linked to their products and services, which may affect their decision-making process.
In particular, corporate image, brand reputation and employer brand are all external factors which may remarkably impact consumer decision-making process.
Employer brand
Employer brand is the term commonly used to refer to a business reputation as an employer. It basically “measures” how attractive an organization is considered by jobseekers when looking for their first or a new job opportunity. People apply for a position in a specific company because is that company that they really want to join.
HR usually establishes and keeps open a number of communication initiatives, especially by means of social media and social networks, to enhance organizations employer brand image, but “candidate experience” definitely represents one of the most significant, arguably the most significant, component of employer branding. Yet it may be used by candidates also to ascertain if employers talk the talk and walk the walk.
Jobseekers as well as potential consumers pay special attention to organizations branded by their own employees as “great place to work” and “employer of choice.” HR typically showcases corporate culture, workplace climate, employee wellbeing initiatives and work-life balance, equal opportunities and diversity and inclusion practices to lure talents and high-fliers, and invite them to browse through their career webpages and apply for suitable positions.
Corporate branding
Consumer decision-making is increasingly influenced by corporate branding, of which employer branding can be considered as a component. As maintained by Roll (2022) “a strong brand is about building and maintaining strong perceptions in the minds of customers.”
Corporate branding can therefore be defined as the series of initiatives and actions taken by employers and the resources they deploy to implement their business model in order to attract and retain new customers.
Also in this case, nevertheless, it is of paramount importance that employer efforts, aiming at conveying a specific message and improving their public image, are consistently received and interpreted by consumers. Despite employers’ efforts to project a strong corporate brand image, customers may indeed get a different idea of their business.
It may be contended that corporate branding is to corporate image as corporate culture is to organizational climate. Employers should not only develop strong corporate cultures and corporate brands, but also do whatever they can to ensure excellence in execution. Appropriate, coherent execution may effectually help employers achieve consistency between development and implementation and avert employees and customers to believe that they talk the talk but do not walk the walk.
Sustained Competitive Edge Paradigm
Attaining sustained competitive edge definitely
represents a daunting, herculean task for every employer. It is highly unlikely
that organizations may shine, worse still, stay afloat in rough, troubled
waters, if they do not ensure that the key factors to achieve competitive
advantage are actually synchronised and run like clockwork.
Table C – Sustained Competitive Edge Paradigm
In particular, in order for employers to achieve sustained competitive advantage they should play special, close attention to four key components, to wit: Business Strategy, Corporate Culture, Employer Branding and Corporate Branding, safe in the knowledge that implementation and human perceptions can make or break their effort to succeed.
Being underpinned by several pillars, the Sustained
Competitive Edge Paradigm is essentially based on the bundle approach according
to which the simultaneous concomitant recourse to different measures, enables
employers to produce synergic, multiplicative effects. Also in this case,
nevertheless, employers will obtain the positive, synergic effects produced by
the bundle approach, only if they devote constant, careful attention to all of
the Sustained Competitive Edge Paradigm components and factors, and take prompt
action to adapt them accordingly when necessary.
Longo, R., (2022), Sustained Competitive Edge Paradigm; Luxembourg: HR Professionals, [online].
