«Researchers have endeavored to increase understanding of the relationships between investments in information systems (IS), competitive advantage, ...»
Since the inception of the U.S.-based segment of FCI in 1915, its products have primarily been focused on the worldwide telecommunications markets. However, the early to mid-2000s saw several factors which were damaging to the U.S.-based company.
When the dot com bubble burst in the early 2000s the U.S.-based company was directly affected as there was a sudden halt in the development of the telecommunications infrastructure. Also during this time FCI‘s largest customer began to produce its own
FCI was bought and sold by two different companies that ultimately drained cash from the company, leaving it in a strapped financial position. In 2006, the company was purchased by an independent investor who prompted a vigorous effort to restructure the company. In early 2007 the United States/European-based company was acquired by its complement in China to bring a cash infusion to the U.S.-based company, to open up new markets to the U.S. side of the company, to provide cutting edge technology to the Chinabased portion of the company, and to open up the China-based company to global markets. A recent Jeffries and Company, Inc. (2008) analyst‘s report stated that the marriage of the two companies combined the two highest-quality producers in the industry. The newly formed company is pursuing a worldwide growth strategy by aggressively going after new markets such as electrical, utilities and transportation, developing new and innovative products, developing substitutes for competing products, and developing new uses for its current products.
In December, 2007, the organization had approximately 800 employees in administrative, engineering, manufacturing, research and development, and sales and customer service positions worldwide. Due to demand for its products, the organization is currently expanding its organization-wide employee base. As of December 2007, the organization had 300 customers in 30 countries, and had total revenue of approximately $197 million. The newly formed organization has spent approximately $500,000 on improving its research and development facilities and is recognized in China as a ―newand high-technology enterprise.‖ Additionally, the organization maintains close ties and
States and China in developing new and innovative products and manufacturing processes. As further evidence of the organization‘s focus upon research and development and its interest in being a global market leader, it assists the Chinese government as well as standards agencies in the United States and Europe in establishing industry-wide standards for its product types across a variety of markets.
For purposes of the current study, the data collection was centered in the United States-based division of the organization. This division is very technology oriented. The United States manufacturing facility houses 130 computers, not including a server room and backup equipment. All of their manufacturing equipment is computerized, with each machine on the floor having a workstation attached to and logged in to a software-as-aservice ERP system. Likewise, equipment such as microscopes and testing facilities necessary for research and development are computerized and linked to the ERP system.
Results are automatically recorded and stored in a central database that is housed off-site.
The ERP system is used to track the entire operation, including inventory, raw materials, production, as well as administrative, human resources, and finance and accounting functions. The ERP system is used for organization wide broadcast and email communications. The ERP system is a software-as-service, browser based system that was selected for the accessibility and flexibility needed in a global operation such as FCI.
The company maintains two T1 communication lines, one directly to the ERP provider and the other for all other online traffic.
type] industry through technological innovation, manufacturing expertise, domestic and international marketing, and branding.‖ And a financial analyst‘s report states about the newly formed U.S./Chinese company, ―[U.S. company]‘s dominance in North America, South America, and Europe, leading product lines and exclusive worldwide rights to proprietary manufacturing technologies were viewed to complement [Chinese company]‘s efficient manufacturing base, existing product lines and leading market position in China.‖ Additionally, a recent popular financial press report stated that this company‘s product is to its industry ―what Kleenex is to tissue.‖ To examine the context of firm dominance further, the academic literature was reviewed. Most empirical studies have defined firm dominance in terms of market share.
Bouckaert et al. (2008) and White (1981) define a dominant firm as one which accounts for a significant share of a given market in comparison to its rivals. Cave et al. (1984) suggest that a dominant firm is one in which a single firm prevails in an industry due to entry barriers and retaining pricing advantages. Given FCI‘s diverse range of markets and products, it was not possible to acquire empirical data regarding the firm‘s actual market share. However, based upon the perceptions communicated through extant financial and trade literature and given FCI‘s ownership of proprietary processes and manufacturing technologies which represent significant barriers to entry, FCI was classified as a dominant firm in the context of this study.
3.1.2. Data Collection. The primary unit of analysis in this study is the competitive action of the firm, which is defined as competitive actions and reactions
response to the action of a competitor. Three types of data were collected: managerial interviews, managerial observation, and internal and external documents, such as FCI‘s annual report, and relevant trade and industry publications. The primary data collection took place through semi-structured interviews with executive and operational level managers within the organization which provided an ―insiders‖ view of the phenomenon (Chen, Farh & MacMillan, 1993). Table 1 provides the job titles of the managers who participated in the study. The length of interviews ranged from approximately one to two hours.
Each interview was taped for accuracy in recording the raw data, and then transcribed to text. The text documents of each interview were then used during the data analysis
competitive activity. Furthermore, the researcher attended an investors‘ conference where managers, analysts and potential investors discussed the competitive activity of the firm. Notes and memos were recorded with regard to the observation data. Internal and external documents were used to examine the effects of the various competitive actions identified in the data upon relative firm performance. The primary time frame of interest in this study covers the period 2006 – 2008. However, other relevant information may derive from discussions with managers of earlier time periods, including but not limited to company history, strategy, and organizational culture.
As suggested by Glaser and Strauss (1967) and Corbin and Strauss (2008), data collection, coding, and analysis were conducted iteratively. Data collection was focused to seek information within the research context. However, interview questions were somewhat loosely structured, allowing managers to have flexibility in providing a response. Data collection proceeded within a competitive environment context such as firm visibility, cultivating new markets, gaining market share, product innovation, and competitive position as well as within an information systems context such as systems used, how they were used, why they were used, why IT-based information systems were purchased, and results of use or purchase. Other interview data gathered included organizational environment, mission, structure, culture, strategy, and managerial perceptions and style.
In addition to interviews, managers were observed during an investor‘s conference where managers discussed the competitive activity of the firm with current
the conference observed securities analysts discussing various perceptions of impacts upon firm performance previously provided by FCI‘s managers. This data was used to augment and confirm the findings from the interview data.
Richard et al. (2009) provide comprehensive evidence that organizational performance has been evaluated using both objective and subjective measures across a broad range of studies (see Richard et al., 2009 for a review). Both objective evidence, through internal and external documents and securities analysts and subjective evidence through the interpretations of managers of impact of competitive actions on firm performance are provided in this dissertation. Also, as recommended by Chen, Farh and MacMillan (1993), insiders as well as outside informants have been used in assessing the impact of competitive actions on firm performance. Additionally, Chen et al. (1993) find that in terms of types of outside informants, information obtained through securities analysts‘ opinions is the most reliable. The researcher was provided 2008 financial analysts‘ reports from three major analysts‘ firms: Jeffries and Company, Inc., PiperJaffray, and Roth Capital Partners. These perceptions of securities analysts and financial reports were used to provide an objective view of the impact and potential impacts of firm competitive actions upon relative firm performance.
3.1.3. Data Analysis. Data collection, analysis and validation took place during
2008. In the early stages of the research, data collection was open-ended with a general selection of interviewees and more open interview questions. As concepts began to emerge through data analysis, the selection of interviewees and interview questions
practice of Orlikowski (1993) and as defined by Corbin and Strauss (1990), the analysis of the data occurred through three coding processes: open coding, axial coding and selective coding.
During the open coding process, the data were manually read and re-read to identify emerging concepts. Each sentence was read independently to identify any underlying concept present. As concepts were identified, they were labeled.
Additionally, during the open coding process, memos about the data and emerging concepts were recorded by the researcher to retain focus and provide a development process for the understanding and clarity of emergent concepts. As concepts emerged from the data, there was a constant comparison with previously identified concepts to look for patterns in the data.
Data collection and analysis reached the point of theoretical saturation, wherein previously identified concepts were repeated in the data, with no new concepts being identified (Glaser & Strauss, 1967). At this time, the emergent concepts were grouped into sensible groupings through the axial coding process. The goal of axial coding is to create a set of categories that can be used to represent the overarching emergent constructs provided by the data. Corbin and Strauss (2008) suggest that one central category will serve as the fundamental category to which all other emergent categories will relate. The exhaustive data collection and analysis of this research effort provided a salient set of constructs which can be used to describe and explain the impact of
competitive actions and/or responses.
3.1.4. Validation. The validation process took place in four stages: objective researcher corroboration, enfolding with existing literature; validation by ―outsiders‖, and validation by participants. In the first stage of validation, to corroborate the findings, a second, objective researcher reviewed each stage of the data analysis. Ideally, a second researcher who has not been exposed to the direct, subjective, inside experiences is desirable (although seldom employed). This outside researcher takes on the role of a more detached investigator who analyzes the data ‗objectively‘ and helps with the debriefing efforts (Gioa & Chittipeddi, 1991). This study was rigorously validated through the employment of both an ‗insider‘ and an ‗outsider‘ researcher (Evered & Louis, 1981). The inside researcher was a bona fide participant who conducted the interviews. The outside researcher conducted an objective analysis of the data. This dualresearcher grounded theoretical approach (Glaser, 1978; Glaser & Strauss, 1967) was used as a means for generating insights about the investigation of the role of information systems in conceiving, enacting and executing competitive actions by a dominant firm to improve its relative performance.
During the validation review of the coding process, the objective second researcher found no additional emergent concepts and the existing emergent concepts were confirmed. Additionally, to validate the findings (Orlikowski, 1993), the emergent concepts were cross-referenced with existing trade and academic literature (Eisenhardt, 1989), and three of the interviewees were consulted to confirm the findings.
were identified. These findings were validated and confirmed as true competitive actions through a thorough review of the competitive dynamics literature (Caves & Ghemawat, 1992; Caves & Porter, 1977; Chen et al., 1992, 2002, 2007; Chen & MacMillan, 1992;
Chen & Miller, 1994; Ferrier, 2001; Ferrier, Smith, & Grimm, 1999; Makadok, 1998;
MacMillan et al. 1985; Miles & Snow, 1978; Miller, 1990; Porter, 1980, 1985; Smith et al. 1989, 1991; Smith & Grimm, 1989). These findings were further validated through a review of industry and trade publications relevant to FCI which verified that the actions identified are viewed by the industry as competitive actions to gain market share, enter new markets or retain market position.