The Use of Business Processes as a Source of Competitive Advantage: Evidence from a High Velocity Market

Abstract

Consistent with resource-based theory (RBV), business processes have had significant effects on firm performance. An examination of the resource-based view literature leads to the identification of business processes that are associated with the systems (e.g., intranet, EDI, and ERP) which support inter-functional coordination of activities for acquiring supplies and other raw materials along with optimising logistics and warehousing activities (e.g., supply chain systems), and other IT-based activities that help information processing about customers and markets (e.g., CRM). Business processes are internal in nature unlike other intangible resources (i.e., reputational resources such as corporate reputation and brand). Resources that are internal in nature can be difficult for competitors to replicate since it possesses the conditions of asset specificity and time compression diseconomies. Therefore, they may provide greater contribution to firm performance compared to other resources that are developed externally. This study aims to analyse the relative impact of business processes on firm performance compared to reputational resources. Hence, a self-administrated questionnaire was conducted on a sample of 161 Turkish firms which operate in different industries. The regression analysis results showed that whilst business processes provided greater contributions to the profitability and market share figures compared to reputational resources, no greater contribution was found on the sales turnover figures.   

Keywords

• Business Processes, Firm Performance, Reputational Resources, Environmental Dynamism, Regression Analysis