Building Network Capabilities in Turbulent Competitive Environments

Citation

Cook, D.P. (2013), "Building Network Capabilities in Turbulent Competitive Environments", Benchmarking: An International Journal, Vol. 20 No. 3, pp. 434-436. https://doi.org/10.1108/14635771311318171

Building Network Capabilities in Turbulent Competitive Environments provides an interesting perspective on the methods by which global firms can develop and enhance their core competencies in order to succeed in intensely competitive markets. Hong and Park use the lens of the Japanese and Korean experience to view the path to competitive improvement by integrating product architecture, supply chain management, and IT strategy. Readers are given insights to key factors viewed as critical drivers of Japanese and Korean firm successes as revealed through extensive examples, field study results, and case studies. In particular, the authors use cases drawn from the electronics and automotive industries to illustrate and support their key assertions. A deeper understanding of today's rapidly evolving global competitive environment should result. Arguably, the greatest contribution of this text is the richer understanding it lends to the development and maintenance of Korean and Japanese industrial might.

An important concept that runs throughout the text is that of the network capability. Hong and Park view this as the firm's ability to effectively manage its supply chain to leverage its unique organizational and product architecture for sustainable competitive advantage. A very interesting perspective is revealed concerning how newly emerging economies manage to catch up with the supply chain and technical capabilities of advanced economies. In the case of Korea, the authors offer valuable insights to the active role of government policy in the success of key industrial sectors and the suppliers to these sectors. In effect, government policies can be argued to have set the stage for the creation of a competitive business environment and the availability of the necessary human capital and research and development activities needed for firms to compete on the world stage. Further, the authors provide an inside look at the critical role that organizational leadership plays in the creation and sustenance of organizational capability. In many instances, the bold leadership vision of the CEO/Owner is attributed to swift decision making and investments that have contributed to the development of organizational capabilities and the ongoing organizational learning that is necessary to maintain these capabilities.

A theme that is repeated throughout this book is that of product architecture. Product architecture is linked to the ability of industries from emerging economies to rapidly catch up to those from more advanced economies. In particular, the role of product architecture in the transfer of technology is explored. Through case studies, the authors compare the catch‐up patterns common in the era of analog technologies vis‐à‐vis catch‐up patterns in the digital age. Comparisons between the Japanese and Korean semiconductor industries are useful not only for suggesting how to become competitive in an industrial sector, but also for maintaining a competitive posture in a global environment that features rapid transitions through the traditional product life cycle. Additionally, product architecture characteristics are tied to the speed of product development in the context of product life cycles and product innovation. In order to provide an operational context, the experiences of Korean mobile phone manufacturers are used. The mobile phone industry is an interesting case that illustrates in clear terms the relationships between product architecture and product development. It also sheds light on the network strategies of mobile phone manufacturers that are designed to permit user‐based innovations.

Integrated information management and successful supply chain management are the other key concepts that are examined based on their contributions to building network capabilities. The authors posit that competitive advantage in the supply chain is a function of the network leadership by which a firm controls the overall process. There is a tacit recognition that no firm exists in isolation, and to be successful, it must be able to coordinate the innovative capabilities of trading partners scattered across the supply chain. Some of the coordination aspects of supply chain management are considered using an industry's product architecture interrelationships. The need for effective IT strategies and the value of information for effective value creation and delivery in the supply chain is an area of analysis that is featured throughout the text. It is demonstrated through a variety of cases contained in the text such as those related to the LCD industry as well as the Korean automotive and steel industries. The applicability of effective IT management to product life cycle management is covered in a set of four cases involving Japanese firms. Park and Hong apply lessons from the past to posit a model for a futuristic product life cycle management model. This model, illustrated through a set of three Japanese‐based cases, emphasizes the translation of customer values into product development. It seeks to integrate product design that considers customer needs, design feedback, and management strategy.

This book is constructed as a set of essays that should pique the interest of practitioners and academics alike. Chapter 1 provides the context and background information that guides the structure of the rest of the text while the final chapter (Chapter 14) provides a condensed summary of the conclusions reached by the authors throughout the text. Obvious effort has been expended to assure that the essays are not laden with mathematical and theoretical minutia. Rather, a high‐level overview of important topics is presented. So, readers without a working knowledge of the topics may find themselves challenged at the times by the dense explanations. Such challenges should not be discouraging since key topics are frequently revisited throughout the text and the text features an extensively cited literature base. Some readers will find their appetites whetted for greater detail than is provided in the text and will certainly wish to avail themselves of the resources to which they are pointed throughout the text.

As suggested above, this book should appeal to a broad audience. Researchers should find their curiosities aroused by the wide range of timely and relevant topics covered. The cases, field study results, and interviews are presented such that there is an intuitive appeal to the authors' assertions; however, there are clearly opportunities identified that would merit further scholarly inquiry. For a more general business audience, Building Network Capabilities in Turbulent Competitive Environments gives an “insider” perspective on the rise of Korean industry, and to a lesser extent, Japanese industry. Understanding the recent successes of Korean firms, and the generally sustained successes of Japanese firms, will give the reader a greater appreciation for the competitive advantage the creation of network capabilities can provide. This greater understanding and appreciation of the integrative effect of product architecture, supply chain management, and IT strategy on competitive advantage should provide practitioners with lessons they can apply to their own business environments.

The underlying question in any book review is whether the book in question is a worthwhile investment. In the case of Park and Hong's Building Network Capabilities in Turbulent Competitive Environments the answer is yes. While I would caution readers that the text may require some degree of patience to absorb, it will have a place on my bookshelf.