mm bagali...... mba...... research......management......hrm......hrd............ Research paper.... PhD.... Research..... Papers.....

1. 22
INTRODUCTION
“Talent is what God gives us, Skill is what we give back to
Him”-Eliel Pierre-
Having a competitive advantage is no longer an all-
inclusive acceptable long-run strategy, especially for
corporate giants aiming at sustainable leadership. A
quick re-look at companies like Blackberry and Nokia who
could not sustain the pace of growth over the years proves
that long-run market leadership demands more than just
having one factor, i.e.; design supremacy or robust
technology (Sharma Chetan, 2013). Organizations today,
struggle to recruit and retain skilled workforce.A fine
balance between generic skills and specific skills are
needed in order to achieve better employee
engagement. Companies have a great need for the
same, as product life cycles get shorter and service
formats get protracted. The demand for specialized
workforce and lately super-specialized workforce is on the
rise and is expected to remain so, with rapidly changing
business needs. We have evolved into an era of
uncertainty in business which also translates to skills
inventory in organizations. Therefore it's not very surprising
that contemporary business houses are eyeing people
with superior skill sets and skill flexibility. Further, the 'skills'
factor could override all the other factors in succession
planning and change management. A skills-centric
culture can lead to great results that translate to market
share revenues and profits of scale for companies.
In the words of Jack Welch, “An organization's ability to
learn, and translate that learning into action rapidly, is the
ultimate competitive advantage.” This translates to the
fact that companies should build a sizeable skills inventory
* Assistant Professor, Human Resources Management, Manipal Global Education Services and India.
** Professor, Strategic HRM and Head, Research in Management, CMS Business Annexe, Jain University, Bangalore, India.
Research Scholar, Jain University,
ABSTRACT
The research paper suggests integrated skills based approach for learning organizations based on the findings of the
study. The paper details the integration of the skills approach into the overall business plan and the strategy of
organizations. A feasible model has been suggested in the paper with regard to adapting skills based approach towards
achieving a sustainable competitive advantage. Principal Component analysis has been used to analyze the data
collected from a sample representing ten prominent business sectors. Business entities strive to achieve and sustain
supremacy, of considerable credibility, in order to have continued growth and profits. While some companies have
banked on 'core competencies' like cost leadership, technological advancements and design excellence, the
sustainability issue still prevails and calls for something more radical. Having a competitive advantage is no longer an all-
inclusive acceptable long-run strategy, especially for corporate giants aiming at sustainable leadership. A quick re-look
at companies like Blackberry and Nokia who could not sustain the pace of growth over the years proves that long-run
market leadership demands more than just having one success factor, i.e.; design supremacy or robust technology.
Companies should build a sizeable skills inventory that can be re-skilled in optimal time frames and can be used to
achieve defined growth objectives. We could be looking at skill dominance translating to market dominance and if
companies are able to scale up this concept, they could probably aim at long-run market leadership, a coveted
corporate objective.
Keywords: Skills Supremacy, Sustainable Growth, Market Leadership.
VIJAY. G. PADAGURI *
By
M.M. BAGALI **
ESTABLISHING SKILLS SUPREMACY: WAY FORWARD
TO SUSTAIN THE COMPETITIVE ADVANTAGE
RESEARCH PAPERS
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2. ARTICLESRESEARCH PAPERS
23
that can be re-skilled in optimal time frames and can be
used to achieve set growth objectives. In future, we could
be looking at skill dominance translating to market
dominance and if companies are able to scale up this
concept, they could probably aim at long-run market
leadership, a coveted corporate objective.
1. Literature Review
'Competitive advantage' is an advantage that a firm has
over its competitors, allowing it to generate greater sales
or margins and/or retains more customers than its
competition. There can be many types of competitive
advantages including the firm's cost structure, product
offerings, distribution network and customer support.
Competitive advantage is a management concept that
has been so popular in the contemporary literature of
management nowadays. The reasons behind such
popularity include the rapid change that organizations
face today, the complexity of the business environment,
the impacts of globalization and unstructured markets,
the ever changing consumer needs, competition, the
r e v o l u t i o n o f i n f o r m a t i o n t e c h n o l o g y a n d
communications, and the liberation of global trade (Al-
Rousan and Qawasmeh, 2009). Core competency
needs to be reviewed based on the factors that stand out
as being unique to the organization, Edgar, William B. and
Lockwood, Chris A. (2012).Competitive advantage can
give the business better long term prospects, Porter,
Michael (1987).
Kotler also defined competitive advantage as an
organizational capability to perform in one or many ways
that competitors find difficult to imitate now and in the
future (Kotler, 1997:53; Kotler, 2000). Nevertheless, Porter
recognized competitive advantage as a strategic goal;
that is a dependent variable and the reason behind this is
that the good performance is related to achieving a
competitive advantage (Read &Difillipi, 1990:90). Others
see competitive advantage as an ability to produce
products or offer services different to what competitors
do, by utilizing the strengths that organizations possess so
as to add value in a way that competitors find it difficult to
imitate (Pitts & Lei, 1968:68). Customer satisfaction can
definitely be employee driven initiative for an
organization, Bearden WO, Teel JE. (1983). Innovation
capability can act as a pre-cursor to organizational
success, AlbaladejoM, Romijn H (2001).
We then can assume that competitive advantage is a
relative quality that organizations claim to possess
through which organizations can exceed their rivals'
performance, and achieve long lasting benefits as
perceived by clients. It is believed that the framework
presented by Michael Porter is one of the most well-known
tools that are used in theoretical as well as empirical
research, since it pays attention to all activities carried out
by an organization with respect to its external environment
(Al-Rousan and Qawasmeh, 2009). The impact of
workplace practices on bottomline results can be
measured, Lisa M. Lynch & Sandra E. Black, (1995).The
development of small business depends on a wide range
of factors relating to growth, profitability, pricing and
strategy, Reid G C (2000).
One of the organizations' major concerns is to care about
customers' needs and wants and transform such needs
and wants into targeted aptitudes or areas called
"competitive dimensions". These dimensions that
organizations focus on and show great interest, while
providing services and products so as to meet market
demand, can help organizations achieve competitive
advantage (Krajewski&Ritzman, 1999). These competitive
dimensions, as we claim, are four: cost, quality, time, and
flexibility, innovation and Responsiveness which are
defined and explained in the following sections. Johnson,
Scoles, Whittington (2005), in their work*, pointed out that
corporate strategy as a framework is a complex process
and involves several constituents. Researchers have
studied leadership skills directly or indirectly for anumber
of years (see Bass, 1990, pp. 97–109). However, the
impetus forresearch on skills was a classic article
published by Robert Katz in theHarvard Business Review in
1955, titled “Skills of an Effective Administrator.”Katz's
article appeared at a time when researchers were trying
toidentify a definitive set of leadership traits. Katz's
approach was an attemptto transcend the trait problem
by addressing leadership as a set of developableskills.
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3. ARTICLESRESEARCH PAPERS
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*'Exploring Corporate Strategy: Text and Cases', Prentice
Hall-Financial Times, Essex
When looking at the evidence linking skills to
organizational outcomes, we are in fact nearly always
looking at evidence which uses qualifications or
educational attainment as a proxy for skills because it is
very difficult to measure or monitor skills per se.
Nonetheless there is considerable positive evidence
linking educational attainment to organizational
performance. For example the most productive
manufacturing organizations tend to have a more highly
educated workforce than the least productive equivalent
on average, to an extra qualification level (Haskel and
Hawkes, 2003). This kind of relationship has also been
found in US where it has been estimated that the
equivalent of an extra year of schooling raised
productivity by between 4.9 and 8.5 per cent in the
manufacturing sector and between 5.9 and 12.7 per
cent in services (Lynch and Black, 1995). These results
have been supported by Mason and Wilson in 2003 for the
UK.
A series of hugely influential and robust research projects
has also strongly indicated a link between skills and
business productivity. A number of well-known 'matched
plant' studies (see for example, Keep, Mayhew, Corney;
2002) by the National Institute for Economic and Social
Research (NIESR) considered the impact of workforce skills
and development on productivity alongside a range of
other factors such as investment in capital equipment
and maintenance practices for matched comparator
establishments. A clear connection between higher skills
and higher productivity was identified particularly at the
intermediate skills level. All the studies found that the
higher average levels of labour productivity in firms in
continental Europe were closely related to the greater
skills and knowledge of their workforces, especially
intermediate skills. Skill levels were also shown to be
associated with the uptake of new equipment and to
maintenance activity. These studies mostly took place in
the mid to late 80s and early 90s but the findings have
been replicated very recently (Mason and Wagner, 2002)
with similar results. There are several arguments that
human resources management could play a key role in
ensuring better business results (Bowen, Lawler, 1992).
Investment in focused training could lead to better
business results, Bishop J (1994).There is clear evidence of
significant return on investment when it comes to
employee training, Keep E, Mayhew K, Corney M (2002).
Other studies have explored if there is a relationship
between skills and other organizational outcomes. Haskel
and Hawkes (2003) found that higher skill (qualification)
levels support innovation and more sophisticated
production processes and were associated with the
production of higher quality products. Green et al. (2003)
has also found a strong relationship between different
levels of UK workforce skills and the sophistication of
products. An OECD (Organization For Economic Co-
operation and development) study looked at innovation
in UK SMEs and found that higher qualification levels of
both managers and staff boosted innovation (Albaladejo
and Romijn, 2001) and was associated with higher
technological complexity and originality. Others have
shown a link to company survival (Reid, 2000). Successful
administration appears to rest on three basic skills, which
we will call technical, human, and conceptual. It would
be unrealistic to assert that these skills are not interrelated,
yet there may be real merit in examining each one
separately, and in developing them independently, Katz
Robert, (1955).
2. Research Gap
Most of the major studies on competitive advantage
have considered and accredited different facets like
cost, time, profitability etc. as the reason for the sustained
growth of a business. In some studies the emphasis has
been on the product offering, packaging etc. But the skills
aspect as an entity has not been examined in terms of
being a distinct competitive advantage. Considering the
above studies, it is very clear that competitive advantage
as such is subjective and varied in the way it can manifest
itself. However, it's a very pertinent issue that needs to be
examined and analyzed. Therefore there is very clear
need that the “skills” factor needs to be accounted for
and that the competitive advantage argument is
incomplete without factoring in the “skills” part. Therefore,
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4. ARTICLESRESEARCH PAPERS
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this research gap has been identified as the core issue in
this research paper.
3. Objectives of the Study
The study pursues multiple objectives with one important
agenda and also a need for crystallization of views on the
topic of skills as being the market differentiator probably
cascading into revenue benefits for the company or the
organization. The 'skills' factor takes center stage.
However, the primary objectives of the study are as
follows:
·To understand the concept of 'skills' in the perspective
of a competitive advantage.
·To analyze the skills perspective to fulfilling manpower
needs of a company.
·To establish the need for skills emphasis in the light of
changing business needs.
·To suggest a model of skills supremacy for sustaining
the competitive advantage.
Traditionally the concept of skills was considered as being
a standard business requirement and a pre-cursor to
employment. However, with changing business needs
and demographics, skills sets have become dynamic
and are now considered a pre-cursor to not only
employment but also growth and cross-vertical
movement.
4. Research Design
4.1 Method of Sampling
Stratified Random Sampling was used for the study to
ensure better representation of the different sectors. The
data was collected from employees working in the IT/ITES,
BPO/KPO, and manufacturing, education and training,
FMCG, banking and finance, Retail, telecom, healthcare
and infrastructure sectors. Further, to have better
representation across, the responses were collected from
employees working across different levels (Operational,
tactical, strategic) roles in their organizations. A sample
size of 100 was considered for this study since it deals with
a cross-sector/cross segment. Proportionate allocation
using a sampling fraction in each of the strata justified the
sample size used for the study.
4.2 Statistical Tools used
Z-test and T-test were used in order to compare the means
of the factors of skills supremacy. Principal Component
analysis was used to understand key influencers in terms of
skills background since the principle components can be
used to find clusters in a set of data.
Source: Author Research based on Primary data collected
Age: <20-25 yrs 26-30 yrs 31-35 yrs 36-40 yrs 41yrs and above
No. of Respondents 27 29 17 15 12
Sex: Male Female
No. of Respondents 61 39
Education: SSLC/10th PUC/12th Graduate Post-Graduate Doctorate
No. of Respondents 9 13 59 19 0
Experience 1-5 yrs 5-10 yrs 10-15 yrs 15-20 yrs 20 yrs and above
No. of Respondents 28 23 20 17 12
Sector-Wise Split IT /ITES BPO/KPO Manufacturing Education and Training Banking and Finance
No. of Respondents 15 15 10 10 10
Sector-Wise Split-2 Retail Telecom Healthcare Infrastructure
No. of Respondents 10 10 10 10
Table 1. Demographic Profile
Source: Author Research based on Primary data collected
Pro Defer
Skills Supremacy is a competitive advantage 74% 5%
Skills supremacy is a product/service differentiator 56% 44%
Superior Skills sets facilitating sustained business growth 84% 16%
Advocacy of Skills emphasis in hiring 69% 31%
Ability of people with better skill sets to
overcome market uncertainties
55% 45%
Posssibility of better skills sets giving organizations
a performance edge over competitors 57% 43%
Table 2. Comprehensive Table on Skills Supremacy-Key Findings
Strategic Level-56%
Tactical Level-72%
Operational Level-81%
Source: Author Research based on Primary data collected
Figure 1. Comprehensive Table on Skills weightage for succeeding
at different levels in Organizations-Key Findings
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5. ARTICLESRESEARCH PAPERS
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5. Analysis
The questionnaire concentrated on factors like skills
inventory, role of skills supremacy for sustained business
growth, the relevance of skills sets at various levels in
organizations and so on. The data was analyzed using the
z test, t test as well as principal component analysis. The
key variables include skills sets, business growth, and
competitive advantage. The relevance of skill sets in the
background of the dynamic business environment and
also the sustainable competitive advantage aspect of
the same.
Most of the respondents felt that skills supremacy was a
competitive advantage for organizations. Several
respondents felt that skills supremacy could act as a
product/service differentiator. A majority of the
respondents said that they would advocate a skills
emphasis approach in hiring. Some of the respondents
felt that people with better skill sets had the ability to help
the organization overcome market uncertainty and also
gave them a performance edge over competition.
Different levels in organizations have a distinctive needs in
terms of the knowledge, skills, attitude and decision
making matrices. The emphasis on skills is more at the
operational and the tactical levels. However, with niche
work profiles and rapid market innovation ie; disruptive
innovation, skills emphasis is now being considered as a
primary focus area. Most of the respondents felt that right
skills were the key for succeeding at the operational level.
Several respondents felt that having the right skills was
necessary to succeed at the tactical level. However, a
marginal majority of respondents felt that the right skills
could contribute to your success at the strategic level.
The above findings definitely indicate a change in the
importance given to “skills sets” in the hierarchy. It can also
be inferred that a vast majority of a company's workforce
needs to have a skills focus to succeed at the existing
levels in the organization and also have a skills approach
to reach leadership levels in the organization.
PCA was done using the XLSTAT 2013 tool for all the factors
in the study, considering the skills background. An
illustration of the analysis is given below. Principal
component analysis was carried out for three factors ie;
business growth, sustainability and competition.
Figure 2. Principal Component Analysis Chart for business growth,
differentiation and sustainability in the skills background
F1
F2
F3
-1
-0.75
-0.5
-0.25
0
0.25
0.5
0.75
1
-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1
Variables (axes F1 and F2: 99.67 %)
F2(8.08%)
F1 (91.58 %)
Table 3. Contribution of the variables (%)
Table 4. Squared cosines of the variables
F1 F2 F3
F1 34.021 25.233 40.746
F2 35.549 7.232 57.219
F3 30.430 67.535 2.035
*F1 relates to importance of skills sets in product/service differentiation
*F2 relates to facilitation of business growth by employees with superior skills sets
*F3 relates to sustainability of business growth with a skills emphasis
-Values in bold correspond for each variable to the factor for which the
squared cosine is the largest
F1 F2 F3
F1 0.935 0.061 0.004
F2 0.977 0.018 0.006
F3 0.836 0.164 0.000
Figure 3. Model: An Integrated Skill Based
Approach For Learning Organizations
Source: Author Research at Jain University between November 2013
and March 2014
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6. ARTICLESRESEARCH PAPERS
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The data clearly reveals that skills emphasis is necessary
towards achieving better business growth and is also
instrumental in ensuring sustained achievement of
business goals and targets. In an era of headstrong
competition in almost every sector, it's very much
necessary that business houses need to work out a
competitive advantage plan. And skills emphasis can
definitely act as a feasible competitive advantage plan in
this regard.
Based on the analysis of the data collected, it's imminent
that business houses need a feasible model in order to
achieve sustainable growth on the long run. An integrated
skills based approach for organizations could act as a
clear road map towards achieving the above said
objective. In this regard, adapting a skills based business
plan could be the first step. As business houses look at
expanding, growing, diversifying and acquiring projects,
a skills based business plan could complement the long
term strategy of the organization. Further, a skills based
approach to the learning and development plans of the
company is also needed. The L and D calendar of the
company needs to have a weightage set for the skills
component in the learning and development plans of the
organization. This could mean more emphasis on skills
development at each level in the organization. The
constitution of key teams and levels in organizations could
be challenging and detail-oriented (Finkelstein, S. 1992).
In order to succeed in this initiative, the learning and
development teams will have to take cognizance of the
vertical heads and team leaders. The next level in this
model would be skills based approach to competition,
wherein, companies can look at achieving a competitive
edge over other players in the market by hiring people with
better skill sets at different levels, building formidable skills
inventory and ensuring retention of the top notch skills in
the organization.
Finally, the last level in this model would be skill based
market differentiation wherein prospective and current
clients would recognize brands and experiences based
on the skill sets of the employees. This could be a
formidable long term strategy for any company to survive
the odds and grow at all times. This would also mean
deployment of a dedicated team and continued efforts
in this regard.
5.1 Skill –Based Approach: Action Plan Illustration
To illustrate the implementation of the proposed model,
automobile sales domain can be taken as a case in point.
An analysis of the key skills needed for a successful
automobile sales career can help us understand the
implications in terms of a skills based approach to fulfilling
an organizational resource requirement. The below
mentioned table details some of the key skills needed for
automobile sales. The NSDC report “Human Resource and
Skill Requirements in the Auto and Auto Components
Sector(2022)” also mentions some of these key skills.
The above mentioned skills refer to a progressive set,
wherein an employee progresses from one level to the
next by acquiring the necessary skill sets. For lateral hires
from other sectors, there is a need to acquire the
necessary skill sets specific to the role. The HR function in
organizations can take steps to ensure that skills inventory
is in order at all times. Some measures that can be taken in
this regard are:
·Adapting periodic and monitored skills based training
approach.
·Having a dedicated resource for skills mapping and
skills acquisition in the HR team.
·Formulating a skills gap report and working towards
reducing the skills gap.
·Involve skills acquisition targets in KRA sheets of
employees.
·Having a review mechanism for skills acquisition and
skills updating.
Source: NSDC report “Human Resource and Skill Requirements in the Auto and
Auto Components Sector (2022)” and Author Research**
Experience Frame Key Skills Needed (Including, but not limited to)
1 year - 5 years
Listening, Tele-calling, Presentation,
Basic technical Skills, Local Language.
5 years - 10 years
Negotiation, Documentation,
Collaboration and Basic Finance.
10 years - 15 years
Database Management, Reporting,
Delegation and Motivation.
15 years - 20 years
Relationship Management,
Team handling and Mentoring.
20 years and above Sales Strategy, Leadership and Analytics.
Table 5. Skills Framework for Automobile Sales
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7. ARTICLESRESEARCH PAPERS
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Conclusion
Companies no longer aim for just short term gains and
windfall returns. Most business houses are looking at a long
term game plan in order to grow at all times and in all
ways. In this context, it would be a gainful long term
strategy for companies in order to ensure sustainability.
Ensuring a skills emphasis in the overall business strategy
can give companies an edge over competition and also
act as an inherent employer branding tool. Though there
are challenges in this regard, smart action and evolution
in this regard can help companies sail through
challenging environments and periods alike.
The 'skills emphasis' component can be effectively
integrated into the overall business plan, the strategic
management aspect as well as the human resources
planning process with due consideration to the values
and vision of the organization. 'Integrated skill-based
approach for learning organizations' model can be
customized to meet the business framework of the
company, effectively. Further scope for study in this area
exists in terms of measuring ROI on investments towards
supremacy, skill based succession planning and skill-
based market differentiation.
National Skills Development Corporation Report “Human
Resource and Skill Requirements in the Auto and Auto
Components Sector (2022)”
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ABOUT THE AUTHORS
Prof Vijay G Padaguri is currently a Faculty in Management Studies at Manipal Global Education Services and Research Scholar,
JAIN University. He is also a certified trainer and facilitator. His areas of research include employability, skills enhancement,
learning and leadership. He is a member of several professional bodies in the Human Resources Management domain.
Currently he is involved in content creation and delivery of general management courses for the corporate education wing at
Manipal Academy of Banking
Dr M M Bagali is currenly working as Professor of HRM, Head- Research in Management, JAIN University. He is LIFE member for
more than 35 different Professional Organizations in India and Overseas. He has been awarded the First BOLT-Best Teacher Award
instituted by Air India-Deccan Herald and visited Singapore and addressed SHRI Senior HR Managers. His teaching assignment
presently includes taking courses in HR, OB, and Leadership for Management and Executives.
li-manager’s Journal o Management, Vol. No. 4 ln 8 March May- 2014