Contact: Grant Madsen, (801) 378-9206[email protected]
BYU business professor's research says collaboration is key to competitive advantage
PROVO, Utah -- Despite the harsh light shed on relationships between companies and their suppliers by the ongoing troubles between Ford Motor Co. and Bridgestone/Firestone Inc., research presented in a new book by a Brigham Young University professor concludes that collaboration actually gives companies a competitive advantage in the marketplace.
"Firms today are recognizing that by effectively collaborating with other companies, they can beat lone-wolf competitors who go it alone. Successful companies are collaborating to challenge competitors as a well coordinated team, rather than as individual enterprises," says Jeffrey H. Dyer, an associate professor of organizational leadership and strategy. "The winners of the next decade and beyond will understand the advantages that are created through effective collaboration across company boundaries."
His book, Collaborative Advantage: Winning Through Extended Enterprise Supplier Networks, details Dyer's eight-year study of the automotive industry. The book includes information from eight peer-reviewed journal articles, the most recent of which were published in issues of this year's Strategic Management Journal and Journal of International Business Studies. His research has won awards from McKinsey & Company and the Strategic Management Society as well as the Institute of Management Sciences.
Focusing his research on Toyota Motor Corporation and DaimlerChrysler, Dyer, who taught at the University of Pennsylvania's Wharton School before coming to BYU in 1999, interviewed more than 200 executives and surveyed 500 of their suppliers to arrive at his conclusions.
"Competition between single firms, while still the rule, is becoming less universal as networks of allied firms have begun to compete in the marketplace," he says. "Increasingly, competitive advantage is created by companies that accomplish their goals by working in teams."
In the book, Dyer, a former Bain & Company consultant, explains how companies can learn from Toyota and Chrysler to make suppliers a part of their competitive bag of tricks. Although automobile companies like General Motors Corp. and Ford are much larger than Toyota and Chrysler, they are neither as profitable nor as productive.
During the last 15 years, Toyota was more than three times as profitable as Ford, GM and Nissan Motor Co. Ltd., while Chrysler was roughly twice as profitable. Dyer credits the increased profitability to Toyota and Chrysler being the first in their industry to recognize thatthe fundamental unit of competition has changed from the individual firm to several firms working together.
Also, Dyer demonstrates how to build trust in supplier companies, how to exploit and manage knowledge (describing how Toyota manages knowledge across organizational boundaries), and how to create advantages by investing in novel approaches to distributing assets.
The book focuses on the automotive industry because of its impact on the U.S. and other national economies, its history of pioneering technology, its ability to adapt to organizational changes and its competitiveness. Dyer explains that the book's principles are meant to apply to complex product industries like computers, biotechnology, software, microelectronics and telecommunications.
"This is because mass-produced products are all pretty much the same. A tire is a tire, so little or no competitive advantage is gained by a car company deciding to switch tire makers," says Dyer. "The advantages are going to come from allying with companies that can build a better motor or another major component."
Additionally, Dyer says managers who don't recognize the importance of collaboration are in danger of adopting the wrong strategies for their firms.
"They're going to be single firms competing against groups of firms with exponentially more resources," he says. "And over time single individuals don't stand a chance against a team."
Contact: Jeffrey H. Dyer, (801) 378-5742 office, (801) 763-1819 home
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