Enterprise Culture: The Headspring of the Enterprise Competition Ability

doi:10.4236/jss.2013.15006

Paper Menu >>

Journal Menu >>

Open Journal of Social Sciences

2013. Vol.1, No.5, 23-26

Published Online October 2013 in SciRes (http://www.scirp.org/journal/jss) http://dx.doi.org/10.4236/jss.2013.15006

Open Access 23

Enterprise Culture: The Headspring of the

Enterprise Competition Ability

Zhaojiang Dong

Shandong University (Weihai), Weihai, China

Email: [email protected]

Received June 2013

There are many factors that can decide and affect the enterprise competition ability. From the value chain,

the article has analyzed and inquired into the formation and promotion of enterprise competition, and

think that the enterprise culture is headspring of enterprise competition ability, that the product or service

is the carrying of business enterprise competition ability and that the value chain is the guaranteeing of the

enterprise competition ability. The enterprise culture is the headspring of nutrition to the enterprise com-

petition ability; it is a key factor that affects the enterprise competition ability.

Keywords: Competition Ability; Enter pr ise C ompetition Ability; Enter pr ise C ultur e

Introduction

Competition is the inevitable product of the market economy

and the objective law. In the fierce market competition, we

must keep on to improving the enterprise competition ability in

order to have an invincible position and continue to develop.

The enterprise competition ability is not achieved overnight.

Along with the enterprise growing up, the enterprise competi-

tion ability is also experiencing a relatively slow growth proc-

ess.

The Connotation of the Enterprise Competition

Ability and Its Components

Competitiveness is a very complex concept. Theory of enter-

prise competition ability includes interpretations from different

angles and different levels. For example, the comprehensive

quality of enterprise competition ability said enterprise compe-

tition ability is to point that in a competitive market, an enter-

prise has to keep more effective than other companies in pro-

viding products or services to the market, and gain profit and

their own comprehensive quality development (Jin, 2001); Pro-

ductivity said that the enterprise competition ability is a kind of

productivity reflected through an enterprise selling its products

in the market (Zhang, 1999); Then the management ability said

that, the management ability, enterprise competition ability is

the ability to be successfully engaged in business activities of

the enterprise and entrepreneurs in adapting, coordinating and

managing the external environment (Yan & Zheng, 1998); Re-

source allocation said is that the core of enterprise competition

ability is enterprise resource configuration (Li, 2001); Also

some scholars use multiple indexes to define and evaluate the

enterprise competition ability (Wang, 2002). The author be-

lieves that the enterprise competition ability is a three-dimen-

sional, dynamic concept.

First of all, enterprise competition ability is a three-dimen-

sional concept.

Enterprise competition ability seems to be a flying bullet.

The bullet that can fly far, depends on both the bullet force—

the power of the ammunition, and the bullet itself quality—tex-

ture and resistance; Based upon the quality of the launcher, and

the size of the medium resistance. For businesses, the most

fundamental measure for the intensity of its competition ability,

is the profitability of the enterprise; And the discretion of the

enterprise profitability is reflected that the enterprise is better

than its competitors for providing customers with competitive

products or services. Products and services competition is face

to face direct competition between businesses, embodied in

price competition, product competition, quality competition,

service competition, etc.; Behind the competition is capital,

production equipment, management and associated “logistics

support” competition, which is the technology competition,

talent competition, the management of the competition. And all

this competition can be regarded as an industrial engineer stra-

tegy competition. Entrepreneurs are not only the first focus of

the competition, but also the decision makers and commanders

of the competition.

Second, enterprise competition ability is a dynamic concept.

In 1985, “World Economy Forum” in the report about the

competitiveness points that in the current and future, competi-

tion ability is the ability and opportunities to design, product

and sale goods with more attractive price and quality than do-

mestic and foreign competitors in their own environment

(Zhang, 1999). Evaluation of enterprise competition ability

depends on the strength of the current, and needs to consider

the status of the enterprise’s future development even more. An

enterprise in a certain period is likely to be the leader of the

industry or a product in the price, new product development,

marketing channels and promotion, etc., playing a leading role

for other enterprise in this industry; However, it may be a mar-

ket follower in the future competition with product, technology

and marketing competition at a disadvantage. Then, it just imi-

tates or follows the market leader. So, the enterprise competi-

tion ability must be examined dynamically (Bian, 2012).

Third, the measure of enterprise competition ability is con-

stantly changing.

Z. J. DONG

Open Access

People of different age, to the competitive advantage with the

enterprise also have different opinions. Before the 1950s, the

third industrial revolution in the past, a firm’s competitive ad-

vantage even more depends on enterprise resources, especially

natural resources; After World War II, with the petrochemical,

electronics, aviation and other industries and mass production

as a symbol of the coming of the fourth industrial revolution,

technology and management a re considered to be one of the

enterprise competition important weights; Since the 90s, along

with the United States of “information superhighway” construc-

tion as the sign, the world has entered the information age.

Entering the 21st century, information technology has become

an important part of enterprise competition ability (Liu, 2008).

According to the above analyses, t he enterprises competition

ability can be divided into three fundamental levels: the outer

layer is the carrier of enterprise competition ability, embodied

in the product or service competition, which is the most direct

power contrast for enterprise competition; The middle is the

enterprise competitiveness “processing workshop”, embodied

in the enterprise’s resources and its configuration ability; The

inne r layer is the core of enterprise competition ability, embod-

ied in comprehensive quality of entrepreneurs, such as deci-

sion-making ability, organization and coordination ability, in-

novation ability, interpersonal ability, etc. Entrepreneur’s qual-

ity, through the enterprise culture constructed, affects the en-

terprise competition ability to be cultivated and enhanced. An-

yhow, description of the enterprises competition ability must be

three-dimensional, dynamic, and must consider how to cultivate

and promote enterprise’s competitiveness from the lasting com-

petitiveness of enterprises.

Nurture and Grow of the Enterprises

Competition Ability

• Enterprises have to undergo from scratch, since the child-

hood of the change process. The enterprise competition

ability is not innate, but also to experience the process from

weak to strong. Revealing the forming process of enterprise

competition ability has important significance to cultivate

and promote enterprise competition ability.

• American strategists Porter argued that: “The competitive

advantage in the final analysis depends on it that the com-

pany can create value for customers (Kotter, 1999).” From

the perspective of economics, the value enterprises create

for customers is equal to the consumers’ benefits (satisfac-

tion) that acquire from company provided products deduct

paid by consumers for the product cost. The much higher

enterprise creating customer’s value is, the more obvious

competitive advantage becomes in the market. Then, we

must continuously improve product quality and reduce pro-

duct cost, in order to improve the cost performance of ex-

isting products and bring more value to consumers. How-

ever, consumer-related products or services competition is

only a form of enterprise competitiveness. There are many

competitive advantages of enterprises, such as technical

superiority, talent advantage, management advantage, in-

novation advantage, etc. To identify the enterprise competi-

tion ability we must take enterprise activity decomposition,

by looking at the activity itself and its relationship to de-

termine the enterprise competitive advantage. To reveal and

determine the enterprise competitive advantage, and find

out the ways to enhance enterprise competition ability, Por-

ter proposed the value chain analysis.

• Value activities are enterprises engaged in the material and

technical boundaries distinct activities. There are two broad

categories of value activities, namely main activities and

ancillary support activities. The main activities include re-

source inputs, production operations, product output, mar-

keting and after-sales service; the ancillary activities in-

clude research and development, procurement, logistics, hu-

man resources management and so on. From a competitive

perspective, company competitiveness in the value chain of

each link is affecting the overall enterprise competition

ability.

• In the process of the cultivation and development about the

enterprise competition ability, entrepreneurship plays a key

role. Entrepreneurs are the focus of enterprises and initially

chose the nature of the enterprise, investment direction, etc.,

and also ultimately decide the development direction and

development of the enterprise scale. Entrepreneurs are bred

the enterprise competition ability, who integrate all kinds of

resources in together to form a unique competitive ability.

Entrepreneur’s comprehensive quality is the most primitive

elements of the enterprise competition ability, and the en-

terprise’s core competitiveness. Entrepreneurial decision

determines the configuration of enterprise resources, and

once the decision is wrong, it will lead to a serious decline

in enterprise competition ability. But the enterprise’s core

competitiveness, after all, is the internal. Core competitive-

ness of the enterprise only through the enterprise value

chain, would be converted into enterprise’s concrete com-

petitiveness. The enterprise competition ability depends not

only on how well each department, and how the coordina-

tion between different departments, but also on the coordi-

nation between enterprise and the external market.

• On the basis of the theory of value chain, to a great extent,

we can reveal enterprise competition ability cultivati on and

growth process. Entrepreneur starting a business is like a

seed to be buried in the ground. The choice of seeds decides

enterprise future development condition. At the same time,

the quality of the land, climate, management and so on, are

also the important factors that affect seed development and

growth. In the long run, enterprise’s success or failure de-

pends on the strength of its own competitiveness, and the

most decisive factor in enterprise competitiveness is the en-

terprise core ability or core competitiveness, namely the en-

trepreneur’s comprehensive quality. Outstanding entrepre-

neur by building enterprise culture, carry out its manage-

ment concept into the enterprise management and develop-

ment of the whole process and infiltrate into various parts

of the enterprise value chain and link, which produce a

profound effect to the enterprise long-term survival and de-

velopment.

Corporate Culture and Its Determinants

Pula Bernhard and Hammer, Michigan Business School pro-

fessor, who will compare the enterprise to a tree, think that a

company is like a tree; the trunk and main branch are the core

product; branch is the business unit; leaves, flowers and fruit

are the final products; to provide nutrients, sustain life, and

solid tree root is the core competitive ability (Xu, 2002). So,

what provides the big tree’s nutrition? The author believes that,

the enterprise culture is the nutrient source for enterprise com-

Z. J. DONG

Open Access

petition ability to be cultivated and improved.

The so-called enterprise culture is the enterprise in a certain

ethnic culture traditions gradually formed with a sum of basic

idea about the enterprise characteristics, values, moral norms,

rules and regulations, lifestyle, cultural environment and suit-

able ways of thinking and patterns of behavior. Enterprise cul-

ture can be divided into four levels in the structure, the spiritual

and cultural level, system culture level, behavior culture and

material culture leve l.

Each company has its own unique culture of its own business

philosophy and principles, their way of problem solving and

decision making, and the staff behavior patterns, etc. From the

form, the enterprise culture belongs to the category of ideology

concept, the person’s value idea. This kind of value concept and

social ethics belong to the same category, and same kind of

intrinsic constraint, in people’s mind and concept of self-disci-

pline. From the content, enterprise culture, the value concept,

that reflecting corporate behavior and the enterprise’s practical

operation process, is the system arrangement and the strategic

choice of the enterprise reflecting on a person’s value idea.

From the nature, the value concept of enterprise culture is put

into practice. Enterprise culture is the value concept, that both

belong to embrace and advocate, and belong to value concept

be put into practice. Enterprise culture is the most fundamental

factor for constraining employee behavior and the operation

process. Thus, in terms of function, the value concept of enter-

prise culture belongs to standardize enterprise behavior, playing

a fundamental role in specification to the enterprise behavior

and staff behavior. The value concept of enterprise culture is

the real solution to the problem, not the surface symbol used for

packaging enterprise in order to look good.

Enterprise culture plays a very important role in enterprise

development. Enterprise culture is the soul of the enterprise.

The value concept of enterprise culture is actually the guidance

for enterprise and its employees, embodied in the consciousness

of each employee. Enterprise culture advocated by enterprise is

a request to people with the value concept in the system ar-

rangement and operation strategy choice. Enterprise culture is

the important ideological guarantee for the enterprise system

and management strategy, and also the ideal foundation for the

enterprise system innovation and management of strategic in-

novation.

Corporate Culture’s Influence on the

Enterprise Co mp etition Ability

Enterprise culture is put forward from the Japanese miracle

of economic development, caused the US-Japan comparative

management research boom. In the 1980s, western management

scholars had a kind of new management ideas. Then, the focus

of the enterprise management research began to run by the en-

terprise’s economic factors to non-economic factors and fo-

cused on the effects of culture on management. “The enterprise

culture to enterprise long-term business performance has a sig-

nificant role”; “the enterprise culture in the next 10 years is

likely to be key factors determine the rise and fall of the enter-

prise” (Kotter & Heskett, 1997). The competitiveness of the

enterprise culture to enterprise’s cultivation and promotion has

important influence.

Enterprise culture is an enterprise’s characteristic different

from other enterprises’. The values of all the enterprise mem-

bers will infiltrate the enterprise daily production and operation

activities, affect the normal work behavior of all employees,

work attitude, spirit and business performance, etc., which can

be inflected through the enterprise final product or service, and

ultimately determines the enterprise’s market competitiveness.

Forecasters say that culture is tomorrow’s economy. To further

promote the development of enterprises and to truly become the

world first-class enterprise, enterprise must resort to the cultural

strength.

Enterprise culture is not spontaneously formed, but built by

shaping. Enterprise culture influence on enterprise competition

activity through the following several aspects:

First, the institutionalization of enterprise culture. The so-

called institutionalization of enterprise culture, in the reality it

contains two meanings: the first layer of meaning is to point

that, enterprise culture is embodied in the institutional arrange-

ment and strategic choice. While enterprise culture is reflecting

the enterprise system arrangement and strategic choice through

the value concept of people, we need to see the active function

of culture, namely the enterprise culture having a guiding role

to enterprise operation; Another layer of meaning of enterprise

culture points that, enterprise culture as a value concept advo-

cated by enterprise managers, should be gradually institutional-

ized to command staff’s thought, and in turn affects employee

and enterprise behavior.

Second, the internalization of enterprise culture. Only be-

coming a part of the staff values, enterprise culture can impact

on employee behavior lasting. The value concept, that is com-

mitted by the enterprise and must be practiced, is infiltrated to

the employees’ minds by the way of instilling. Enterprise cul-

ture management can’t take immediate method. That, from the

entrepreneur’s idea (subjective consciousness) into the concept

of enterprise employees, should be through a long-term practi ce

process. Entrepreneurs’ contribution to the society is not only

establishing the enterprise, producing products or services,

guarantying the market supplies, but more important is created

the excellent enterprise core concept, accumulated the rich

knowledge of business operation, which make the enterprise

become a powerful vitality of the organism with a soul, and

then make the enterprise keep the lasting competitiveness. Cul-

ture can only be achieved through a long time to the specifica-

tion role and control function for people. Short time assault,

make movement way and hard promotion approach, can only

be counterproductive. What it is important is penetrating the

enterprise management idea into the hearts of employees. En-

terprise culture management need to achieve spring constant

blowing and moistens everything silently.

Third, the practice of enterprise culture. Enterprise culture is

not just a corporate advocacy and espoused value concept, but

also must be put into practice. Enterprise culture comes from

practice and guides practice at the same time, which is fully

implemented into practice. Thus, the value concept of enter-

prise culture is more than advocated. In the Haier Group, the

rationality and human are combined together organically. Un-

der the strict specification system, Haier fully absorb the man-

agement philosophy, encourage personal value pursuit, and put

the enterprise culture into part of the employees’ daily work,

which make employees feel a kind of pressure everywhere and

the have the desire to do better, and then consciously norm and

constraint on their behavior.

Excellent entrepreneurs are often at the forefront in the en-

terprise culture construction. Chuanzhi Liu has attached great

importance to Lenovo’s enterprise culture construction. Leno-

Z. J. DONG

Open Access

vo’s culture include: speak contribution and benefit of values;

into the international market of the common ideals; solidarity

and coordinated operations of the overall sense; truth-seeking

spirit and entrepreneurial spirit of the company; high technol-

ogy enterprise social image. Although Lenovo culture embodies

in enterprise strategic strength is not enough, its comprehen-

siveness is worth learning. Similar like Rongchang Group Pre-

sident advocating the enterprise culture (autonomy, self-disci-

pline, initiative, encourage each other and confidence), Ruimin

Zhang, the Haier President, proposes the enterprise culture as

“people-oriented, de-centered, honestly, the gentleman debate,

the polite”, which has its place desired.

The quality of enterprise operators or managers decides the

rise and fall of enterprises. A lot of practices at home and

abroad proved repeatedly, every successful enterprise has an

entrepreneur as the core of high-quality management group to

support. The hugely successful enterprise is always linked with

an entrepreneur’s name; the entrepreneur is the soul of the en-

terprise success. Enterprise core competition ability, namely

entrepreneur’s comprehensive quality and ability, in addition to

the correct decision of the entrepreneurs and enterprises tangi-

ble value chain into the concrete competitiveness of the enter-

prise, the other important way is shaping the unique enterprise

culture, which influences eac h employ ee ’s sense of competition

and competitive ability, and thus fundamentally improving en-

terprise overall competitiveness.

REFERENCES

Bian X.-K., & Qiu W.-X. (2012). Comparative advantage and enter-

prises competition ability. Enter pr ise Econ o mic, 3.

Jin, B. (2001). On the nature of the competitiveness of enterprises.

Chinese Industrial Economy.

Kotter, J. P., & Heskett, J. L., Zeng, Z. Translation (1997). Enterprise

culture and performance. Beijing: Huaxia Publishing House.

Kotter, J. P., Mei, R.-H. Translation (1999). Marketing management.

Shanghai: Shanghai People’s Publishing House.

Li, G.-Y. (2001). Enterprise resource allocation power and competi-

tiveness. Monthly Theory, 11, 88.

Liu, P. (2008). Enterprise core competition ability and cultivation in our

country. Mode r n Economy, 1.

Wang, B.-A. (2002). Enterprise competition ability evaluation index

system design. Industrial Technology & Economy, 2, 35.

Xu, F. (2002). On state-owned foreign trade enterprise’s core competi-

tion ability. International Economics and Trade Research, 1, 59.

Yan, M., & Zheng, L.-Y. (1998). Ent erprise co mpetitiveness evaluation.

Financial Theory and Practice, 4, 35.

Zhang, Z.-Q., & Wu, J.-Z. (1999). Enterprise competitiveness and its

evaluation. Management Modernizat ion, 1, 24.