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ROLE OF CORE COMPETENCIES AND COMPETITIVE ADVANTAGES IN EVALUATION OF COMPETITIVENESS OF SMALL AND MEDIUM SIZED ENTERPRISES: EMPIRICAL STUDY BASED ON COMPETITIVENESS DATA OF HUNGARIAN FIRMS

Andras Rideg

Enterprise Theory and Practice Doctoral School (ETPDS) Working Papers from Faculty of Economics, University of Miskolc

Abstract: The Small Business Competitiveness Research Group of University of Pâcs Faculty of Business and Economics led by Dr. Laszlo Szerb, has developed the Small and Medium Enterprisesï Competitiveness Index (SMECI). The this indexwas based upon a the data of a representative cluster sampling survey, carried out between 2013-2014, focusing on Hungarian small and medium enterprises (SME).The approach utilisesBarney's resource-based and Miller's configuration theories and accepts Czak¢-Chik nïs definition of firm-level competitiveness and accommodates it to a conceptual model, thus allows index creation.In their view, an interconnected system containing ten internal competences shape the competitiveness. According to Szerb, the key of competitiveness lies in the well-synchronized system of the competencies, because individualcompetences can easily be copied. According to the theory of core competences, company should focus on high-performance competences, which can provide the greatest competitive advantage. Regarding small enterprises however, this theory is thought to be only partly valid.Because of these characteristics, the "penalty for bottleneck" method is often used, which has establishedtheoretical background in literature (e.g., Theory of Weakest Link, Theory of Constraints, Six Sigma Management). Consequently, the methodology of SMECI - while determining firm-level competitiveness it - paradoxically validates the impact of bottleneck competences, which are generally competitive disadvantages. This study follows multiple objectives. The first is to specify a methodology - using Szerbïs theoretical basis - which enables the examination of the improving effects of high-performance core competences and competitive advantages. The results are comparable to Szerbïs results, since both approaches rely on the same dataset.Finally, an experiment is reported that links the two logics, which are complementary and not contradictory. According to the author's opinion, the joint application of the two approaches can provide a more complete picture onsmall enterprises' competitiveness.

Date: 2015-10-15
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Published in Challenges in economic and technological development - Conference Proceedings, 15-16 October 2015, ISBN 978-963-358-100-1, University of Miskolc

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