Question

Which of the following statements is false?

a) A dynamic capability is the ability to modify, deepen, or reconfigure the company's existing resources and capabilities in response to changes in the environment or market.

b) A company's internal strengths should always serve as the basis for its strategy.

c) Managers must look toward correcting competitive weaknesses that make the company vulnerable, dampen profitability, or disqualify it from pursuing an attractive opportunity.

d) Managers need to keep close track of how cost effectively the company can deliver value to customers relative to its competitors.

e) Resources are harder to categorize than capabilities and more challenging to search for as a result.

Answer 1

The false statement is b) A company's internal strengths should always serve as the basis for its strategy. Strategies should also consider dynamic capabilities, competitive challenges, and the changing nature of the market, not just internal strengths.

Step-by-step explanation:

The statement in the question that is false is: b) A company's internal strengths should always serve as the basis for its strategy. While internal strengths are important, relying solely on them can overlook the need to correct weaknesses or adapt to changes in the environment, which can be detrimental to a company's success. Donald Clifton's strengths-based management suggests focusing on an individual's strengths. Although popular, an overemphasis on strengths can lead to neglect of weaknesses, impacting performance negatively. When considering dynamic capability and comparative advantage, it's clear that firms need to be flexible and responsive to changes, showing that strengths should not be the only focus.

Dynamic capability involves a firm's ability to modify, deepen, or reconfigure its existing resources in response to environmental changes. It's clear that strategies should also address weaknesses and competitive challenges. Moreover, dynamic comparative advantage indicates that countries and firms must adapt to maintain their competitive edge, further arguing against a static reliance on existing strengths.

Regarding resources and capabilities, the categorization and searchability of resources compared to capabilities can be debated, but it is not necessarily true that resources are harder to categorize or search for, as capabilities often involve complex interactions of resources and processes that are likewise challenging to define and analyze.