Organizational capability: creating competitive advantage

Building better products or services, pricing goods or services lower than the competition, or incorporating technological innovation into research and manufacturing operations must today be supplemented by organizational capabilityl-the firm's ability to manage people to gain competitive advantage (Exhibit 1). To establish organizational capability, the business must adapt to changing customer and strategic needs by establishing internal structures and processes that influence its members to create organization-specific competencies. Employees become a critical resource for sustainable competitiveness.