TOWARDS A METHODOLOGY OF SUSTAINABLE COMPETITIVENESS OF ORGANIZATION

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International Journal of Civil Engineering and Technology (IJCIET)
Volume 9, Issue 11, November 2018, pp. 161–172, Article ID: IJCIET_09_11_016
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TOWARDS A METHODOLOGY OF
SUSTAINABLE COMPETITIVENESS OF
ORGANIZATION
Tatiana A. Salimova and Lyudmila I. Biryukova
National Research Mordovia State University, Saransk, Russia
Alvina T. Shilkina
National Research Mordovia State University, Saransk, Russia
Elena V. Khakhaleva
LLC “Infomomaxim”, Saransk, Russia
ABSTRACT
This article investigates the sustainable competitiveness of an enterprise as a
basic element of the concept of continuous improvement and sustainable development
of society, which includes the evaluations of its genesis, essence, principles, and
mechanisms. The authors confirm the hypothesis that takes into account the
components of integration character, multi-level system, and the multidimensionality
of the definition under study. The authors place special emphasis on the application of
this category at the level of individual economic entity, since organizations have
substantial impact on economy, ecology, and the social stability of local communities
in their area of operation. Studies previously performed on this issue, in most cases,
are not only fragmented but also the classification of scientific views on the issues
under investigation is absent.
The position of the authors is based on the provisions of international and
national documents in the domain of quality and sustainable development, the
standards of International Organization for Standardization, Global Sustainable
Competitiveness Index SolAbility, and Global Competitiveness Index of World
Economic Forum calculations.
The result obtained formed the basis for conceptual definition improvement and
model development elaboration in order to ensure and evaluate the sustainable
competitiveness of an enterprise. The authors’ model of sustainable competitiveness
of an enterprise includes criteria such as “Managerial capital,” “Management of
interaction with stakeholders,” “Resource efficiency and environmental
compatibility,” “Social capital,” and “Innovations and training,” which together

Towards a Methodology of Sustainable Competitiveness of Organization
create conditions for identity, organizational excellence, and sustained success of the
enterprise facilitation through effective leadership and a risk-oriented approach.
According to the results of the study, the conclusion was reached about the
universality and viability of the proposed model as a strategic tool for sustainable
competitiveness of business entities’ development and implementation.
Keywords: Quality Management, Competitiveness of Enterprises, Sustainable
Development, Sustainable Competitiveness.
Cite this Article: Tatiana A. Salimova, Lyudmila I. Biryukova Alvina T. Shilkina
and Elena V. Khakhaleva, Towards a Methodology of Sustainable Competitiveness of
Organization, International Journal of Civil Engineering and Technology, 9(11),
2018, pp. 161–172.
http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=9&IType=11
1. INTRODUCTION
Rapid changes taking place across the world have had the effect of increasingly actualizing
the tasks of corporate strategy and tactic adaptation in order to survive in the competitive
struggle [1]. At the same time, the elaboration of strategic plans for sustainable development
and competitiveness facilitation based on the assessment of the strengths and weaknesses of
activity are points of particular significance, along with the analysis of real possibilities,
resources and the existing vulnerabilities of the enterprise towards the external environment
[2, 3, 4]. In this regard, enterprises and organizations of different fields of activity need to
search and apply more advanced concepts and tools, focused on quality, continuous
improvement and sustainable business success [5, 6].
In most cases, the appearance and development of such concepts is a consequence of the
processes of economic interaction with connected sciences and disciplines; the result of
deepening and expansion of the economic theory subject; the manifestation of trends towards
the integration of various concepts, paradigms and methodologies and the formation of new
interdisciplinary categories on their basis. The term “sustainable competitiveness” may be
attributed to such integrated concepts.
The term “sustainable competitiveness” is not common, especially under the condition of
its application to the level of an economic entity. Essence, content, key elements and
principles, as well as methods and approaches for its assessment and facilitation, are
determined within the framework of integration and synthesis of the concepts of ensuring
competitiveness and sustainable development.
Historically, the concept of competitiveness came into existence with assistance of A.
Smith and D. Riccardo [7, 8, 9], gradually transforming into the theory of using advantages
of national economies for exporting products to countries where there are no such advantages
in the international division of labor. Due to this perspective, competitiveness has become
associated with the ability of economic entities and countries to manufacture goods and
services with lower base cost than others.
Further study of development and transformation issues of the category
“competitiveness” is associated with works of such scientists as F. Wirsema, M.E. Porter, B.
Olin, A.J. Strickland, A.A. Thompson, K. Omaye, E. Pettigrew, K. Prahalad, M. Tracy, G.
Hamel, H. Itami, J.J. Lamben, I. Ansoff, G. Mintzberg, C. Andrews, A. Chandler, G. Steiner,
M.H. Mescon, M. Albert, F. Khedouri, C.J. Grayson, C.S. O’Dell, D.J. Collis, A. Cynthia
Montgomery, G. Hamel, C.K. Prahalad, D.J. Teece, G. Simon, and also G.L. Azoev, E.P.

Tatiana A. Salimova, Lyudmila I. Biryukova Alvina T. Shilkina and Elena V. Khakhaleva
Golubkov, R.A. Fatkhutdinov, V.V. Tsarev, G.Y. Belyakova, A.Yu. Yudanova, I.P.
Zavyalov, E.A. Gorbashko, I.P. Faminsky et al. A comprehensive analysis of these authors’
works leads to the conclusion about multi-level system (international, national, regional,
corporate, production) and multidimensionality of the definition under investigation.
The concept of “sustainable competitiveness” is initially encountered in the work of M.E.
Porter “On Competition” (1998), where a sustainable competitive advantage means a
sustainable value in time, significance created by company for its customers, within a single
market strategy based on a special combination of resources and capabilities that can not be
repeated by competitors for a long time [10]. In other words, the category “competitiveness”
is considered by the author in combination with categories "stability", "continuity",
"prolongation". A similar approach may be found in the works of A. Balkyte, M.
Tvaronavičienė [11], D.I. Kuzmin, O.N. Petrova, O.S. Tolkova et al.
Practically speaking, a significant contribution to the development of the category
“sustainable competitiveness” was made by representatives of government bodies of various
countries, international and national public organizations, including EU Competitiveness
Council [12], Presidential Competitiveness Commission under the USA President [13],
Organization for Economic Cooperation and Development (OECD), World Economic
Forum, SolAbility - Korean-Swiss Consulting Agency, etc. For today, due to their
contribution, the category “competitiveness” is commonly viewed through ensuring
sustainability of economic, environmental and social aspects of business development. This
approach is particularly used in calculation of Global Sustainable Competitiveness Index
SolAbility and Global Competitiveness Index in the framework of Global Competitiveness
Report (GCR) and World Economic Forum at global and national levels.
In addition, there are a number of studies of the sustainable competitiveness concept with
respect to regional level of economy [14]. In accordance with them, the key components of
sustainable competitiveness of a region are its socio-economic, scientific-technical and
human potential of socio-economic system of territorial level.
Besides, the issue of elaboration and common application of the concept “sustainable
competitiveness” to the level of an individual enterprise still remains open. Studies are
fragmented, despite the enormous influence of corporate level on economy, ecology and
social stability of local communities, thereby affecting the competitiveness of region, and in
some cases the whole country.
To eliminate the indicated contradiction, it is necessary to form conceptual definition and
to develop a management methodology of “sustainable competitiveness” of an enterprise.
2. METHODS
Methodology of the study is based on critical review of scientific literature and publications
on the issues of competitiveness and sustainable development of society, which made it
possible to classify the points of view of various authors and to determine scientific directions
on the subject under investigation. As part of management experience consolidation, genesis
of the category “sustainable competitiveness” was clarified; objectives, tasks, principles and
mechanisms of this concept were brought to light as applied to the corporate management
level. The authors’ position on these issues is based on the provisions of international
documents such as AGENDA 21 [15], International Organization for Standardization [16, 17,
18, 19, 20] standards, Global Sustainable Competitiveness Index SolAbility and Global
Competitiveness Index of World Economic Forum.

The obtained result formed the basis for development of the authors’ model of sustainable
competitiveness of an enterprise, based on such criteria as “Managerial capital”,
“Management of interaction with stakeholders”, “Resource efficiency and environmental
compatibility”, “Social capital”, “Innovation and training”. During its elaboration, the authors
performed situational analysis, interviewing and content analysis of media texts.
3. RESEARCH MATERIALS
3.1. Concept and Components of Sustainable Competitiveness of Organization
Since the 90-s of the XX century and up to the present, the “sustainable competitiveness”
concept development is influenced by a number of factors and intergovernmental processes
that have contributed to the determination of essence, criteria and indicators of sustainable
development and management, both by national economies and activity of individual
economic entities.
Such factors and processes, in our opinion, may include:
1. preservation of inconsistency and fragmentation of approaches to the definition,
facilitation and management of competitiveness of enterprises and organizations;
2. initiatives to develop global and national strategies for sustainable development of
society;
3. elaboration and widespread use of various methods for assessing sustainable
competitiveness for different levels of management.
Despite a significant amount of studies on the issue of ensuring the competitiveness of
enterprises, there is no unambiguous interpretation of this term. For example, M.H. Mescon,
M. Albert, F. Khedouri give a point of view according to which the competitiveness of an
enterprise is manifested in its competitive advantage or difference, it means in its high
competence in any branch, which gives enterprise the best opportunity to attract and preserve
consumer base [21]. C.J. Grayson and C.S. O’Dell believe that the competitiveness of an
enterprise lies in its ability to maintain a leading position in the economy [22].
Classification of existing approaches to the definition of the category “competitiveness of
an enterprise” is presented in Figure 1.
Figure 1 Classification of approaches to the definition of the category "competitiveness of an
enterprise"
Development of the first approach is performed due to the studies of Porter M.E. [10],
Buckley P.J. [23], T.Y. Adaeva, G.L. Azoev and A.P. Chelenkova [24], V.E. Shvets, R.A.
Fatkhutdinova, G.N. Igolnikova and E.A. Patrusheva, E.P. Golubkova, A.Z. Seleznev, I.I.
Pichurina, A.A. Rudychev [25] et al. These authors do not consider categories
“competitiveness of an enterprise” and “competitiveness of a product/service” as identical. In

their opinion, competitiveness of a product is a determining factor in competitiveness of
organization, but far from exhausting the latter, on the contrary, it significantly reduces the
possibility of research.
The second approach to the definition of the category “competitiveness of an enterprise”
was formed in the framework of the works of M. Urbaniec [26], S. Cantele, A. ZardiniIs [27],
I.V. Ershova [28], P.S. Zavyalova, Kh.A. Faskhieva and A.V. Krakhmaleva, P.V. Zabelina,
E. Mlotok. In their opinion, the sources of competitiveness are directly inside enterprise:
comparisons with competitors, long-term forecasting, analysis of market situation, etc. are
excluded from the field of study.
According to the followers of the third approach - David J. Collis, A. Cynthia
Montgomery [29], Gary Hamel, C.K. Prahalad [30], D.J. Teece [31], T. Lahti, J. Wincent, V.
Parida [32] “competitiveness of an enterprise” is considered as the ability to be flexible and
adaptive in changing conditions of competition, while maintaining integrity and efficiency of
business management. At the same time, the issues related to quality of organization,
management of manufacturing processes and competitiveness of manufacturing products are
outside the scope of this approach.
Summarizing the above mentioned, we consider interpretation of the definition of
“competitiveness of an enterprise” is the most correct, if based on a dual approach to its
definition: firstly, through the efficiency of economic activity, and secondly, through the
competitiveness of applied business models.
Turning to the second group of factors influencing the development of the concept of
“sustainable competitiveness”, it should be noted that the term “sustainable development”
came into existence for the first time in 1980 in the work “World Strategy of Nature Defense.
Preservation of vital resources for sustainable development” [33]. At the socio-political level,
this phrase was pronounced for the first time in 1987 in the report of the UN Commission on
Environment and Development “Our Common Future”, where sustainable development was
defined as development, which satisfies the vital needs of current generation of people
without depriving this opportunity of future generations. Within the framework of this
document, the problems of economic development were connected with the worsening global
environmental crisis, and social injustice was recognized as a significant obstacle to the
further development of humanity. Consequently, the concept of the sustainable development
of society was based on the unity of economy, ecology and society [34].
In this format the concept of sustainable development was approved at the Earth Summit
in Rio de Janeiro (1992) and served as ideological basis for the adoption of AGENDA 21,
containing 17 objectives and 169 tasks relating to all components of sustainable development
for the period from 2015 to 2030 [15].
Current initiatives to elaborate and to implement strategies for sustainable development of
society formed the legal and regulatory basis for the concept of sustainable competitiveness
not only at global, national and regional levels of management, but also at the level of
individual enterprises and organizations. A special role in this structure of documents belongs
to the standards elaborated by International Organization for Standardization (ISO) (Table 1).

Table 1 Information on ISO standards from the standpoint of sustainable development of society [35]
Standard name Characteristics of standard
Aspect of
sustainable
development
Number of certificates in
2016 2017
ISO 9001:2015 Quality
management systems –
Requirements
Contains requirements for quality
management systems that can assist
organizations to improve
performance and create the basis for
initiatives on sustainable
development.
Economy 1 105 937 1 058 504
ISO 9004:2018 Quality
management – Quality of
an organization –
Guidance to achieve
sustained success*
Contains recommendations for
organization to achieve sustainable
success by meeting needs and
expectations of stakeholders on
long-term and balanced basis.
Economy
Society
- -
ISO 14001:2015
Environmental
management systems –
Requirements with
guidance for use
Contains requirements for impact
management of organization on the
environment and for improving its
environmental performance.
Economy
Ecology
Society
346 147 362 610
ISO 26000:2010 Guidance
on social responsibility*
Contains principles of social
responsibility of business and
approaches to its integration into
strategies, systems and processes of
an enterprise.
Economy
Society
- -
ISO 22301:2012 Societal
security – Business
continuity management
systems – Requirements
Contains requirements for
elaboration, operation and
continuous improvement of
management system of business
protection from incidents.
Economy
Ecology
Society
3 853 4 281
* the standard is not used for certification purposes
Analysis and classification of legal and regulatory basis on issues of competitiveness and
sustainable development allow to improve the authors' approach to definition of the category
“sustainable competitiveness of an enterprise”, identifying it as a real and/or potential ability
of an economic entity more effectively than competitors to meet the needs of various groups
of stakeholders based on business model in which the economic efficiency of resource is
used, technological development, investments and organization changes do not compromise
the environmental integrity and the ability to meet the needs of future generations [36]. In
addition to the three traditionally distinguished elements of sustainable development
(economy, ecology, social responsibility of business), enterprises need to focus their attention
on the analysis and assessment of the external macro-environment condition, viewing it
through risk- based thinking.
3.2. Formation of Model and Criteria for Sustainable Competitiveness of an
Enterprise
Practical aspects of implementation of corporate strategies for sustainable competitiveness
involve elaboration and justification of an appropriate model and criteria for assessment,
taking into account the following factors:
1. universality, which will provide organizations of various forms of ownership and
types of activity with opportunity to use the assessment results for benchmarking
in the field of sustainable competitiveness;

2. adaptability, which supposes the possibility of refining the assessment criteria of
the model, based on size of enterprise, complexity of technological processes,
available resources and innovative potential of business;
3. dynamism, which means to use not only current indicators during assessment, but
also trends of their changes in the medium and long periods.
The authors' version of the model, published for the first time in 2017 [36] and refined on
the basis on the results of testing in a number of enterprises of the Russian Federation, is
presented in Figure 2.
Figure 2 Model of sustainable competitiveness of an enterprise
This model was based on organizational excellence models (EFQM, ISO 9004: 2018, 7S,
4P, etc.), as well as Global Sustainable Competitiveness Index SolAbility and Global
Competitiveness Index of World Economic Forum, adapted to the traditional components of
the concept of sustainable development (economy, ecology, society). Concomitantly, the
competitiveness of an enterprise is ensured by such components as “Managerial capital”,
“Management of interaction with stakeholders”, “Resource efficiency and environment
compatibility”, “Social capital”, “Innovations and training” that form necessary conditions
for organizational excellence and sustainable success of an enterprise through effective
leadership and risk-oriented approach.
The basis of the developed model, according to the authors, is the competitiveness of
manufactured products and/or services provided by the enterprise. Without it, the
implementation of other criteria for sustainable competitiveness does not make sense.
Inclusion in the model of sustainable competitiveness of an enterprise the “Managerial
capital” criterion is associated with general assumption that leadership is a driver of
organizational development, a central control element that forms corporate identity through

mission, vision, values, culture, elaboration and implementation of policies, strategies,
tactics, as well as through internal and external communications and information exchange.
The criterion “Management of interaction with stakeholders” should include an
assessment of such economic, environmental, and social aspects as satisfaction of customers,
suppliers, and partners of the enterprise; compliance with tax, labor, environmental law;
amount of funds spent on socially significant events, etc.
In the framework of the criterion "Resource efficiency and environmental compatibility"
should be estimated labor intensity, material intensity and energy intensity of manufacturing,
labor productivity, including per worker; level of recycling of production wastes,
effectiveness of environmental measures and functioning of environmental management
system in accordance with ISO 14001:2015, etc.
On the basis of the “Social capital” criterion, activity of enterprise in the field of human
resource management and socially responsible business may be assessed, including the level
of satisfaction of the organization staff; structure and dynamics of staff movement; cost of
labor and social support of staff; existence of conflicts between staff and administration of the
enterprise, etc.
The criterion "Innovation and training" characterizes ability of enterprise to create added
value for consumers and jobs through innovation, high technology, knowledge management
and staff competence. Its assessment is performed on the basis of such indicators as
proportion of innovative products in total output, structure of product and technological
innovations; number of patents obtained by organization based on the results of R&D; level
of mechanization and automation of labor; cost of acquiring software and upgrading
production infrastructure; costs of maintaining and developing staff competence based on
Lifelong learning, etc.
At the same time, traditional elements of sustainable development (economics, ecology,
social responsibility of business) are revealed comprehensively, concomitantly with several
criteria of the model. Thus, for example, issues of environmental component are considered
not only within the criterion "Resource efficiency and environmental compatibility", but also
within the criterion "Management of interaction with stakeholders", since the authorities that
perform supervision in the field of environmental management are also among stakeholders
of organization. Social component of sustainable competitiveness of an enterprise in addition
to the criterion "Social capital" is discovered in the framework of the criterion "Innovation
and training", etc.
4. DISCUSSION AND CONCLUSIONS
The results of testing the proposed model in a number of enterprises in the Russian
Federation [36] confirmed its universality and consistency as one of the basic approaches for
elaboration and implementation of corporate strategies for sustainable competitiveness. In
addition, on their basis general recommendations were formulated for the level of
competitiveness of an economic entity assessment:
1. Organization should independently choose the most appropriate and significant
assessment criteria, and also take into account the level of competence of the staff
performing the study of sustainable competitiveness of an enterprise to ensure
uniformity in calculations of various indicators.
2. Since the performance indicators of organization used for assessment within the
model may be calculated in different units of measurement, and combining them into
one integral characteristic is a difficult task, it is reasonable to assign a point value to

each indicator, in addition to a numerical value. The point scale should be elaborated
by the organization independently, based on the dynamics of past years, incidents that
occurred in the internal and external environment, risks and opportunities, as well as
target values of the characteristics.
3. Point value of each criterion of the model is defined as an arithmetic average of the
point estimates of all indicators included in this criterion of assessment.
4. During assessment of the sustainable competitiveness of an enterprise, one of the
following options may be used:
a. proceed from unequivalence of the assessment criteria in activity of organization.
In this case, the overall index of sustainable competitiveness will be determined as
the sum of values of the criteria multiplied by their weighting coefficients. The
sum of weighting coefficients of the assessment criteria in this case should be
equal to one:
where Isc – general index of sustainable competitiveness;
SIn– values of sustainable competitiveness criterion;
kn– weighting coefficients of assessment criteria.
b. proceed from equivalence of the assessment criteria in activity of organization. In
this case, the overall index of sustainable competitiveness of an enterprise will be
calculated according to the following formula:
5. Overall index of sustainable competitiveness of an enterprise may range from 0 to 5.
The authors' interpretation of values of the sustainable competitiveness index of an
enterprise is presented in Table 2.
Table 2 Assessment matrix of sustainable competitiveness levels of an enterprise
Points
Level of sustainable
competitiveness
Brief level description
1 2 3
0-1 Uncompetitive enterprise Enterprise is uncompetitive and is on the verge of bankruptcy.
1-2
Low level of enterprise
competitiveness
Enterprise is competitive only in the short period, usually due to the
low price of traditional products. Reactive approach to managing
competitiveness. In order to survive in a changing market
environment, an enterprise needs urgent transformations in all fields
of activity.
2-3
Medium level of enterprise
competitiveness
Enterprise has an unstable non-price competitive advantage, due to
which it is stable in the short period. However, it is possible a
significant deterioration in its position in the market with the
appearance of a substitute product or activation of new "players."
3-4 Competitive enterprise
Enterprise has a number of non-price competitive advantages, as a
result, it is stable in the short and medium periods. Quality
management system has been developed and maintained in working
condition, separate tools for environmental management and social
business are used. Use of risk-based approach in making management
decisions and a proactive approach to management of the
competitiveness of an enterprise is fragmented. To ensure sustainable
competitiveness, careful planning and implementation of measures to

eliminate “bottlenecks” are required.
4-5
Sustainably competitive
enterprise
Enterprise is competitive in the market on the basis of a number of
non-price advantages; timely responds to all changes in external and
internal environment; provides environmental and social
responsibility to various groups of stakeholders in the framework of
the relevant management system functioning, has a high innovative
potential, efficiently and responsibly uses all types of resources. An
enterprise has a real or potential ability more effectively than
competitors to meet current market needs without compromising the
ability to meet the needs of future generations.
The approach to the management of competitiveness is proactive and
systemic.
Thus, the presented methodology for ensuring and evaluating the sustainable
competitiveness of an enterprise is complex, which makes it possible to assess not individual
areas of activity of an economic entity, but all aspects of its functioning. Hypothesis about
integration character and multi-level system of the definition under investigation is
confirmed, which opens new opportunities for both theoretical and practical research on
management of business competitiveness in medium and long perspective.
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