Toma de decisiones gerenciales

Porter (1990) identifies four stages of national industrial development: the factor-driven stage¹², the investment-driven stage¹³, the innovation-driven stage¹⁴, and lastly the wealth-driven stage. He argues that the correct policy for industry and government depends on the nation's developmental stage. As well, Porter (1990) provides a useful concept that can help firms to explore improvements for productivity. The key principles of the competitiveness paradigm can be summarized as follows:

Firms need a healthy home base to assist them in developing and sustaining the capacity to innovate. But firms, not nations, are on the leading edge of international competition

Competitive advantage results from an effective combination of appropriate firms' strategies and its environment.

Competitive advantage is sustained through continuous innovation and upgrading of the productive capacities of the firms.

12Factor-driven stage is characterized either by natural-resource-based activities (primary extraction) or by labor-intensive manufacturing.

13 Investment-driven stage is associated with the manufacturing of intermediate and capital goods and infrastructural building.

14 Innovation-driven stage arrives when a country is human-capital abundant and active in research and development.

However, Porter's theory of national competitive advantage (1990) becomes more and more subject of critique under the impression of the digitalization, globalization and deregulation. All of these critiques are acceptable. Some of these critiques are:

Although Porter makes a contribution to the theory of international trade and strategic management, none of the four determinants offered by Porter is new (Barney 2002). It means that Porter's work lacks the originality.

The lack of formal analytic modeling (Oz 1999). It means that the diamond is an explanatory framework rather than a deterministic theory. Porter has gained all his information from case studies of different industries in different nations. He does not offer any empirical or statistical evidence to support his theories. Although this criticism is mainly true, it should be stated that by using such a qualitative framework, Porter introduces several interesting points like the advanced and specific factor creation mechanisms and sophistication of demand conditions, which would have been very difficult to capture if he had just focused on quantitative method and formal modeling.

In his model of five forces (1979), Porter states that high local rivalry is a threat.

His diamond (1990) states the opposites: intensive rivalry motivates companies to innovate.

Porter focuses on intensive local rivalry and might underestimate the influence of international rivalry. Foreign-owned multinational enterprises have been excluded in Porter’s model unless they become part of the host country diamond (O’Malley and Van Egeraat 2000).

Porter’s model is not always convincing that it can bring really advantages for a firm in the future. As well, it is doubtful whether this general model can really be used as a tool to examine any country without further specifications.

Porter’s ideas became more subject of critique under the impact of the ICT.

Porter’s single national model needs to be reformulated as a double diamond or multiple diamond model for the purpose of application to smaller peripheral economies (O’Malley and Van Egeraat 2000).

Porter is criticized about his treatment of macroeconomic policy. He underestimates price competitiveness and plays down macroeconomic policies that affect the relative costs of producing similar products in different countries.

According to him, macroeconomic factors like the value of currency and interest rates play a role by affecting the export performance in the short run and not preferable and sustainable sources of competitive advantage in the long run.

Porter pays very little attention to the national culture on the competitive advantage of a country. According to him, the influence of culture on competitive advantage is an indirect one since it acts through the determinants, rather than on its own.

It is questionable whether the variables of the determinant "firm strategy, structure and rivalry" can form a coherent group or if they are just a rest of category.

According to Porter, domestic demand conditions of an industry are amongst the important determinants of the international competitiveness of this industry. The relationship between international competitiveness and the size of home demand is one of the issues that is open to dispute since there are two conflicting arguments concerning this relationship. According to the first argument, if home demand is large, firms may feel secure to invest in industries where there are economies of scale, and given that there is intensive domestic rivalry and local buyers parallel foreign demand, this may encourage international competitiveness.

According to the second one, however, if home market is large enough, firms may not bother trying to export and may prefer to concentrate solely on the home market.

The determinants of the national competitive advantage are grouped in four categories (figure 2.1). The categories are factor conditions, demand conditions, related and supporting industries, and firm strategy, structure and rivalry (1990).

Figure 2.1 The Determinants of National Advantage

Source: Porter 1990

After analyzing the competitive industries, Porter extends his theory to the national economy as a whole. Porter thinks that it is possible to classify the economic development process into four broad stages: the factor-driven, investment-driven, innovation-driven and wealth-driven stages. In the factor-driven stage, the competitive advantage of industries emerges from basic and generalized factors of production such as an abundant natural resources and low cost labor. In the investment-driven stage, willingness and ability to invest is the key for competitive advantage. The investments concentrate on new production facilities and on factor creation mechanisms. At this stage, advantages are no longer entirely dependent on factor conditions. Although, to a limited extent, home demand as well as firm strategy, structure and rivalry also play a role, whereas the related and supporting industries are still largely undeveloped.

FIRM STRATEGY, STRUCTURE, AND

RIVALRY

FACTOR CONDITIONS

DEMAND CONDITIONS

RELATED AND SUPPORTING

INDUSTRIES Chance

Govern.

In the investment-driven stage, clusters of competitive industries deepen both vertically and horizontally and services in the competitiveness of a nation become more important.

In contrast to aforementioned stages, the wealth-driven stage signals a decline. The economy is mainly driven by past success and wealth, innovation and sustaining competitive advantage lose their importance.