Managing Capability - Firm Resources and Sustained Competitive Advantage - Case Study Example

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This paper "Managing Capability - Firm Resources and Sustained Competitive Advantage" focuses on the fact that one of the unmatchable entrepreneurial landmarks of Touristik Union International is its continuous structural progress and upgrading services offered to worldwide customers…
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Managing Capability - Firm Resources and Sustained Competitive Advantage
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Download file to see previous pages Generally, capabilities and competencies are used interchangeably in the literature, however, in terms of business and organizational culture, the scope of capabilities is not only specific but its horizon is also quite vast. A capability is a fairly large scale unit of analysis which makes the organization and individual recognize its purpose concerning substantial outcomes (Dosi et al, 2000). According to Leonard (1992), “capability is the knowledge set that distinguishes and provides competitive advantage”. This short definition clears the concept that better organizational capabilities are the real and key motivator for organizations to progress. Organizational capabilities support the organization in the following ways to enhance the capabilities of its employees to judge their strategic competencies to compete for the rivalries in the market. (a)  Organizational capabilities enable the management authorities to establish Human Resource Management policies according to the requirement of the organization and develop these Human Resource Management functions as a strategic partner. Therefore, organizational capabilities play a key role between human resource and the business strategy, thus making it a proactive source of competitive advantage (Ulrick and Lake 1991). (b) Organizational capabilities raise the competency level of individuals and reinforce positive values in the organization. (c) Organizational capabilities help the managing staff to formulate the business strategies basing on the strengths and weaknesses of the available manpower (Barney 1991). (d) These capabilities derive the required consequences like the satisfaction of both the stakeholders and customers (Ulrich and Lake 1991; Yeung and Berman 1997). 2. Resources and Capabilities of Touristik Union International 2.1 Background TUI, abbreviated for Touristik Union International, was established in 1968 with headquarters located at Berlin, Germany. Touristik Union International is the largest integrated tourism group in Europe, lagging far behind its competitors with a turnover of about € 21,866 million in 2008. Initially, it worked as Preussag AG and gained renowned fame in the field of transportation and industrial sector till 2001. This year, it became a 100% subsidiary of Preussag AG. In next year, Preussag AG was transformed into Touristik Union International Preussag AG  ( During the next few years, Touristik Union International developed and changed its production from industrial segment to a modern tourism and shipping company. The general credibility of the Touristik Union International is quite excellent and strategically today is the largest and leading tourism and shipping organization of the world, operationally active mainly in Central, Northern, and Western Europe while it has the networks across Europe as well. The inventory of Touristik Union International is decorated with hotels, restaurants, retail stores, container ships, travel agencies, and airlines. ...Download file to see next pagesRead More
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