John Kay

in Foundations of Corporate Success

Published in print April 1995 | ISBN: 9780198289883
Published online November 2003 | e-ISBN: 9780191718205 | DOI:

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‘Architecture’ is introduced as the first of the three primary sources of distinctive capabilities and it refers to a network of relationship contracts within, or around, the firm. It can be subdivided into internal architecture (relationships with employees), external architecture (relationships with their suppliers and customers) and networks (relationships among a group of firms engaged in related activities). It adds value by helping create organizational knowledge and routines that enable the company to respond flexibly to changing circumstances and allows easy exchange of information. Note that such capabilities can only add value in a long‐term context, which penalizes opportunistic behaviour.

Keywords: added value; architecture; competitive advantage; contracts; core competencies; distinctive capabilities; networks; organizational knowledge; organizational routines; relationships

Chapter.  9238 words.  Illustrated.

Subjects: Microeconomics

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