The main objective of this study was to explain top management perceptions of industry and firm effects on firm performance through the mediation of competitive advantage in financial service firms operating in a regulated industry in a developing Ethiopian economy. The resource-based and industry-based views, constituting the two main schools of thought explaining performance variations among firms, were used as theoretical foundation of this study. Porter’s five-forces framework was used during this process. The researcher employed a post-positivist paradigm using a cross-sectional survey design. A total of 27 financial service firms (15 banks and 12 insurance firms) that had functioned for three and more years were selected for the study. The unit of analysis was ‘firms’, while respondents were top level managers with a total target population of less than 300. A census survey rather than a sample survey was undertaken. A total of 287 survey questionnaires were distributed (banks 180 and insurance industry 107), of which 215 were collected from 26 firms (15 banks and 11 insurance firms). Of the questionnaires 206 were properly completed leading to a valid response rate of 71%. These were used for the data analysis. A variance-based PLS-SEM approach, which is relevant to evaluate the predictive effects of the industry and firm factors on firm performance, was used to explain the hypothesized model using SmartPLS 2.00 software as well as the Statistical Package for the Social Sciences program. The assessment of the hypothesized model indicated that the R2 result on firm performance variance due to the combined industry effects and firm effects was 39%, indicating a moderately significant predictive accuracy of the model. The relative direct effect size (f2) of the industry on firm performance was 3%, while firm had a direct effect size of 2%, which was small. The combined indirect relative predictive accuracy of industry and firm effect sizes on firm performance through competitive advantage was high at 27%. This was driven by the relative substantial predictive power of firm effect on competitive advantage (f2 = 65%). Furthermore, the predictive capability (Q2) assessment result of the model indicated that both industry and firm effects had a 23% relevant predictive power on firm performance. The direct relative measure of the predictive relevance (q2) value of industry effect (q2 = 0.02) on firm performance was relatively higher than that of the firm effect (q2 = 0.01). Competitive advantage had a relative predictive power of 0.12, which was driven by the direct relative predictive capability of firm effect (q2 = 0.25) on competitive advantage. The overall assessment results of the structural model revealed that the model had satisfactory statistical power to predict the hypothetical research model. The hypothesis that industry effects had an influence on the performance of financial service firms was not supported. The result indicated that industry effects had a positive and non-significant relationship with firm performance, which points to competitiveness in the financial services industry. These results were achieved against the tenets of Porter’s five-forces framework. The hypothesis that firm effects had a positive predictive effect on firm performance was also not supported, indicating that resources and capabilities do not directly lead to improved firm performance. The direct effect of competitive advantage on firm performance was supported. The mediating effect of competitive advantage between industry effects and firm performance was not significant, while the mediation of competitive advantage between firm effects and firm performance was highly significant. The findings of this study revealed that firm effects were relevant through the mediation of competitive advantage in explaining performance variances among financial service firms, operating in a strictly regulated industry. The relative predictive power of firm effect on competitive advantage was high. Firm resources, particularly intangible resources and dynamic capabilities, are the key predictors of firm performance indirectly through the mediation of competitive advantage. Such an advantage may not last long given the excessive supervision and regulations that exist and the fact that firms are being dictated to by the government to comply with its strategic direction as opposed to pursuing their own firm specific strategies. Such practice could encourage competing financial firms to converge and pursue similar types of strategies and encourage imitations to gain short term competitive advantage and superior performance. This finding contradicts the fundamental premise of the resource-based view and firm heterogeneity even though it tentatively supports the argument made by Foss and Knudsen (2003) who argue that heterogeneity is not a necessary condition to gain competitive advantage and superior firm performance. Financial service firms should not only develop and manage their resources and capabilities, but they should also monitor the changes in the industry. This finding highlights the fact that firms can create competitive advantage and enjoy superior performance in a closed and regulated industry. The findings of this research make a significant contribution to the existing debate on the resource-based and industry-based views in explaining the causes of firms’ performance variations specifically in a regulated environment. / Business Management / D.B.L.

The main objective of this study was to explain top management perceptions of industry and firm effects on firm performance through the mediation of competitive advantage in financial service firms operating in a regulated industry in a developing Ethiopian economy. The resource-based and industry-based views, constituting the two main schools of thought explaining performance variations among firms, were used as theoretical foundation of this study. Porter’s five-forces framework was used during this process. The researcher employed a post-positivist paradigm using a cross-sectional survey design. A total of 27 financial service firms (15 banks and 12 insurance firms) that had functioned for three and more years were selected for the study. The unit of analysis was ‘firms’, while respondents were top level managers with a total target population of less than 300. A census survey rather than a sample survey was undertaken. A total of 287 survey questionnaires were distributed (banks 180 and insurance industry 107), of which 215 were collected from 26 firms (15 banks and 11 insurance firms). Of the questionnaires 206 were properly completed leading to a valid response rate of 71%. These were used for the data analysis. A variance-based PLS-SEM approach, which is relevant to evaluate the predictive effects of the industry and firm factors on firm performance, was used to explain the hypothesized model using SmartPLS 2.00 software as well as the Statistical Package for the Social Sciences program. The assessment of the hypothesized model indicated that the R2 result on firm performance variance due to the combined industry effects and firm effects was 39%, indicating a moderately significant predictive accuracy of the model. The relative direct effect size (f2) of the industry on firm performance was 3%, while firm had a direct effect size of 2%, which was small. The combined indirect relative predictive accuracy of industry and firm effect sizes on firm performance through competitive advantage was high at 27%. This was driven by the relative substantial predictive power of firm effect on competitive advantage (f2 = 65%). Furthermore, the predictive capability (Q2) assessment result of the model indicated that both industry and firm effects had a 23% relevant predictive power on firm performance. The direct relative measure of the predictive relevance (q2) value of industry effect (q2 = 0.02) on firm performance was relatively higher than that of the firm effect (q2 = 0.01). Competitive advantage had a relative predictive power of 0.12, which was driven by the direct relative predictive capability of firm effect (q2 = 0.25) on competitive advantage. The overall assessment results of the structural model revealed that the model had satisfactory statistical power to predict the hypothetical research model. The hypothesis that industry effects had an influence on the performance of financial service firms was not supported. The result indicated that industry effects had a positive and non-significant relationship with firm performance, which points to competitiveness in the financial services industry. These results were achieved against the tenets of Porter’s five-forces framework. The hypothesis that firm effects had a positive predictive effect on firm performance was also not supported, indicating that resources and capabilities do not directly lead to improved firm performance. The direct effect of competitive advantage on firm performance was supported. The mediating effect of competitive advantage between industry effects and firm performance was not significant, while the mediation of competitive advantage between firm effects and firm performance was highly significant. The findings of this study revealed that firm effects were relevant through the mediation of competitive advantage in explaining performance variances among financial service firms, operating in a strictly regulated industry. The relative predictive power of firm effect on competitive advantage was high. Firm resources, particularly intangible resources and dynamic capabilities, are the key predictors of firm performance indirectly through the mediation of competitive advantage. Such an advantage may not last long given the excessive supervision and regulations that exist and the fact that firms are being dictated to by the government to comply with its strategic direction as opposed to pursuing their own firm specific strategies. Such practice could encourage competing financial firms to converge and pursue similar types of strategies and encourage imitations to gain short term competitive advantage and superior performance. This finding contradicts the fundamental premise of the resource-based view and firm heterogeneity even though it tentatively supports the argument made by Foss and Knudsen (2003) who argue that heterogeneity is not a necessary condition to gain competitive advantage and superior firm performance. Financial service firms should not only develop and manage their resources and capabilities, but they should also monitor the changes in the industry. This finding highlights the fact that firms can create competitive advantage and enjoy superior performance in a closed and regulated industry. The findings of this research make a significant contribution to the existing debate on the resource-based and industry-based views in explaining the causes of firms’ performance variations specifically in a regulated environment. / Business Management / D.B.L.

Abstract in English, Zulu and Afrikaans / The primary intent of this study was to develop a competitive intelligence (CI) programme implementation strategy framework for the effective use of CI in strategic decision-making (SDM) in a conglomerate, using embedded multiple units and a single-case exploratory study that is qualitative dominant. The study therefore explored the strategic value of CI for SDM in a company that has a conglomerate structure and whose subsidiaries are vertically integrated. Despite the perceived usefulness of CI for distinctive SDM, the case conglomerate and its subsidiaries had collected and employed the available CI products to support their strategic, tactical and other business decisions. Overall results indicated differences between the subsidiaries and the headquarter; and among the subsidiaries on CI practice (CI collection, CI coordination, CI sharing and CI effort) and CI usage for SDM and other decisions. Although a similar strategy development process (guided by the grand corporate strategy), management structure, decision-making process and orientation in the subsidiaries existed, these uniformities did not significantly result in a uniform level of application and usage of CI for SDM across the conglomerate. The conclusion is that CI application is very subjective and contextual even in a vertically integrated conglomerate. Through theory, literature review and empirical findings, synthesis and iteration, a middle-range theory that integrates the CI and SDM disciplines in terms of the contextual issues both share is also constructed. The study also developed a novel way of crafting CI for SDM, which may fit into the existing structure and realities of the conglomerate so as to formalise CI. The CI programme implementation strategy framework was developed considering the proof of tested theories, best practices, existing context, strategy, decision-making process, structure, enabling factors and capabilities of the conglomerate. The CI programme implementation strategy framework, accompanied by a proposed CI structure, has immediate pragmatic utility. It could enable the conglomerate to initiate a formal CI programme without delay and to develop it following an organisational maturation cycle. The study makes an original contribution by conceptualising a CI programme implementation strategy for a unique case and theorising the case within a novel extension within middle-range theory (“SDM and CI application can be viewed in the contextual domains both share”). The exploratory study itself, which led to merging theory and best practices with empirical results and fitting the theories and best practices into case conglomerate’s realities, also makes the study unique in terms of its approach and outputs. / Inhloso enkulu yalolu cwaningo kwakungukusungula uhlaka lokuqala ukusebenzisa uhlelo lwamasu obuhlakani bokuqhathanisa izinkampani ezincintisanayo, obaziwa ngokuthi yiCompetitive Intelligence (iCI) ngesiNgisi ukuze isebenze kahle ekuthathweni kwezinqumo ezihambisana namasu okwaziwa ngestrategic decision-making (iSDM) ngesiNgisi kwinhlanganyela yezinkampani, kusetshenziswa uhlobo locwaningo olungamayunithi amaningi afakwe ndawonye, oluhlola udaba olulodwa nolugxile kakhulu ekuqoqweni kwemininingwane. Ngakhoke, lolu cwaningo luhlole umthelela omuhle wamasu eCI ngokuthatha izinqumo ezihambisana namasu (iSDM) enkampanini enomumo wenhlanganyela yezinkampani enezinkampani ezingena ngaphansi kwayo ezenza imisebenzi eyahlukahlukene. Phezu kokumsebenzi obonakalayo weCI ngokuhlukile kwiSDM, inhlangayela yezinkampani okuyiyo ebhekiwe kanye nezinkampani ezingaphansi kwayo yaqoqa yase isebenzisa imikhiqizo yeCI etholakalayo ukusingatha ukuthatha kwayo izinqumo ezihambisana namasu, namaqhinga kanye nezinye izinqumo zebhizinisi. Imiphumela ephelele yabonisa ukuthi kukhona ukungafani phakathi kwezinkampani ezingena ngaphansi kwayo kanye nekomkhulu; kanti futhi phakathi wezinkampani ezingena ngaphansi kwayo kokuphathelene neCI (Ukuqoqwa kwemininingwane yeCI, ukuhlanganiswa kwemininingwane yeCI, ukusabalalisa imininingwane yeCI nokusebenza kweCI) nokusetshenziswa kweSDM nezinye izinqumo. Nakuba kwakukhona inqubo yokuthuthukisa isu elifanayo (elandela imigomo yesu elihle lenkampani), ukwakheka kohlaka lwabaphethe, inqubo yokuthatha izinqumo kanye nokuqondiswa kwezinkampani ezingaphansi kwenye, lokhu kwefaniswa akuzange kube ngokufanayo endleleni yokwenza nokusebenziswa kweCI kwiSDM kwinhlangayela yezinkampani. Isiphetho ukuthi uhlelo lokusebenza lweCI luncike kakhulu ohlangothini nasengqikithini eyodwa kwinhlanganyela yezinkampani ezenza izinto ezahlukahlukene. Ngokulandela ukuhlaziywa kwemibhalo yemibono yezinzululwazi, kanye nokutholakele uma kwenziwa ucwaningo olubheka izinto ngenkathi zenzeka, ukuhlanganiswa kwemininingwane kanye nokuphindaphindwa kokuhlolwa, kuphinde kwakhiwe imibono yezinzululwazi emibili ehlanganisa imikhakha yeCI neSDM maqondana nezingqikithi ezifanayo kuyona. Ekugcineni, ucwaningo luphinde lwasungula indlela engakaze ibe khona yokwakha iCI iyakhela iSDM engangena ithi khaxa ekwakhekeni nasesimweni esikhona senhlanganyela yezinkampani ukuze iCI ihleleke ngokusemthethweni. Uhlaka lwesu lokuqaliswa kokusebenza kohlelo lweCI lwenziwa ngoba kucatshangwa ngobufakazi obutholakala kwimibono yezinzululwazi ehloliwe, okusebenze ngempumelelo, indikimba ekhona njengamanje, isu, inqubo yokuthatha izinqumo, ukwakheka, yilokho okwenza izinto zenzeke futhi kusebenzeke kwinhlanganyela yezinkampani. Uhlaka lwesu lokuqaliswa kokusebenza kohlelo lweCI, oluphelezelwa ukwakheka okuhlongoziwe kweCI kukwazi ukuhlolisisa kahle umqondo wokukwazi ukubona ubungako bolwazi nesidingo solunye ucwaningo. Kungasiza inhlanganyela yezinkampani, cishe, ukuba ikwazi ukuqala uhlelo olusha lweCI nokulithuthukisa kulandela uchungechunge lwendlela yokukhula yenhlangano. Ucwaningo lufaka ulwazi olusha esivivaneni ngokuqhamuka nomqondo omusha wesu lokuqala ukusebenzisa uhlelo lweCI odabeni olungajwayelekile, bese lubeka imibono ngodaba olubhekwayo ngendlela engakaze yenzeke nehlanganisa imibono yezinzululwazi kanye nocwaningo olubheka izinto ngenkathi zenzeka (“Ukusetshenziswa kweSDM neCI kungabhekwa ezizindeni zengqikithi ezifanayo kukona”). Ucwaningo oluhlolayo, lona uqobo, oluholela ekuhlanganisweni kwemibono yezinzululwazi nokubhekwa kwalokho okucwaningwayo ukuthi kusebenza kahle kuphi kanye nemiphumela yocwaningo olubheka izinto ngenkathi zenzeka, nokuhlanganisa lokho nokwenzeka ngempela enhlanganyeleni yezinkampani, nakho kwenza lolu cwaningo lube ngolwehlukile maqondana nendlela oluyilandelayo kanye nemiphumela evelayo. / Die primêre doel van hierdie studie was om 'n strategieraamwerk vir programimplementering van mededingingsintelligensie (MI) te ontwikkel vir die doeltreffende gebruik van MI in strategiese besluitneming in 'n konglomeraat, deur 'n vasgelegde veelvoudige eenhede, enkelgeval-verkenningstudie, wat ook kwalitatief dominant is, te gebruik. Die studie het dus die strategiese waarde van MI vir strategiese besluitneming verken in 'n maatskappy wat 'n konglomeraatstruktuur het en wie se filiale vertikaal geïntegreer is. Ondanks die waargenome nuttigheid van MI vir spesifiek strategiese besluitneming, het die gevallestudiekonglomeraat en sy filiale die beskikbare MI-produkte versamel en aangewend om hul strategiese, taktiese en ander sakebesluite te ondersteun. Algehele resultate het die bestaan van verskille tussen die filiale en die hoofkantoor aangedui; en tussen die filiale oor MI-praktyke (MI-versameling, MI-koördinering; MI-deling en MI-pogings) en MI-gebruik vir strategiese en ander besluite. Alhoewel daar soortgelyke strategiese ontwikkelingsprosesse bestaan (gelei deur die groot korporatiewe strategie), het hierdie eenvormigheid in bestuurstrukture, besluitnemingprosesse en oriëntering in die filiale nie 'n beduidende eenvormige vlak van toepassing en gebruik van MI vir strategiese besluitneming regdeur die konglomeraat tot gevolg gehad nie. Gevolglik is MI-toepassing baie subjektief en kontekstueel, selfs in 'n konglomeraat wat vertikaal geïntegreer is. Deur teoretiese, literatuuroorsig- en empiriese bevindinge is sintese en iterasie, twee middelvlakteorieë, ook saamgestel wat velde van MI en strategiese besluitneming met betrekking tot die kontekstuele kwessies wat albei deel, geïntegreer het. Op die ou end het die studie ook 'n nuwe manier ontwikkel om MI vir strategiese besluitneming te bewerk wat by die bestaande struktuur en realiteite van die konglomeraat kan inpas om MI te formaliseer. Die strategieraamwerk vir programimplementering van MI is ontwikkel met die bewys van getoetste teorieë, beste praktyke, bestaande konteks, strategie, besluitnemingsproses, faktore wat strukture moontlik maak en vermoë van die konglomeraat, in gedagte. Die strategieraamwerk vir programimplementering van MI, saam met die voorgestelde MI-strukture, het onmiddellike pragmatiese nut. Dit kan die konglomeraat onmiddellik in staat te stel om 'n formele MI-program te inisieer en dit te ontwikkel deur 'n organisatoriese verouderingsiklus te volg. Die studie maak 'n oorspronklike bydra deur 'n strategie vir programimplementering van MI te konseptualiseer vir 'n unieke geval, die teoretisering van die geval binne 'n nuwe uitbreiding in 'n middelvlakteorie ("Toepassing van strategiese besluitneming en MI kan in die kontekstuele domeine beskou word wat beide deel"). Die verkenningstudie self, wat tot die samesmelting van teorie en beste praktyke met die empiriese resultate gelei het en die passing van die teorieë en beste praktyke in die gevallestudiekonglomeraat se realiteite, maak die studie ook uniek met betrekking tot sy benadering en opbrengs. / Graduate School for Business Leadership / D.B.L.