TECHNOLOGICAL RESOURCES FOR SUSTAINABLE COMPETITIVE ADVANTAGE IN MANUFACTURING: CASE OF SELECTED COMPANIES FREDERICK P.O. MUKETI REG. NO. D61/P/7958/2004 university of nkiRG^i .LIBRARY Research Project submitted in partial fulfillment of the requirements for the award of the Degree of Master of Business Administration, School of Business, University of Nairobi. 2009 DECLARATION This research project proposal is my original work and has not been presented to any learning institution for award of any degree. Signed... Frederick P.O. Muketi This research proposal has been submitted for the examination with our approval as University Supervisors. / Date. A. c s ^ Date. i ACKNOWLEDGEMENT The author is indebted to the supervisors of this Research Project, Messrs S.O. Nyamwange and John K. Kenduiwo for the contributions they made to shape the final outlook that zeroed down to the target area, as initially it was too wide to manage within the time frame and available resources. Dr. Iraki and Dr. C.N. Kariuki of the Department of Management Science made additional support for my project proposal. The assistance received from the inner family was immeasurable as it ranged from the Research equipment and materials to time, patience, tolerance and moral support, including prayers. To mention but a few, wife Stella Muketi, daughter Ida Celine Muketi, mother Josephine Andinya and father Pius Muketi, elder sister director of Kenya Water for Health Organization Mrs. Catherine Mwango and nephews Franklin and Ken Mwango. Going through the elder sister's project proposals to donors of KWAHO gave the impetus to the focus. On the actual research front to be thanked are all the operational managers of the three companies studied and who gave their devoted support on the necessary information that was asked for. Among others Dr Evans Kidero (CEO) and Mr. Edwin Muruka (Human Resources Chief) in Mumias Sugar Company Limited were of enormous breakthrough contribution. Special contributions were received from the Production Manager Humphrey Otuko, Queen Otsyula (Training), Alice Wanyonyi (Quality Management Systems), Ali Farrah (Procurement) and the Workshop Manager. In East African Breweries Limited, Eng Bernard Kiilu Kyengo, the Electrical Manager coalesced the support of his very cooperative managers in the Operations Director, Procurement officers, IT officer, and Quality Manager (Chief Brewer) whose information played a big part coupled with the traditionally friendly atmosphere at EABL made the author quite at home getting the materials. At Bamburi Cement Limited, all the respondents were quite cooperative with the information, they were sure they could give and were able to accommodate follow up 11 phone calls that were done at even odd hours, the majority of them having been work colleagues for over ten years in the company. It was gratitude for all this. Further gratitude, to the author’s employer, the Ministry of Works, Transport and Communication of Namibia for allowing a paid absence of leave to come back all the way to Nairobi from Windhoek to defend the project proposal, and being encouraged continuously to wait until the window for defending the project proposal was opened by the School of Business Administration after polishing assistance by the supervisors. Among others special mention goes to Ms. Maria Iyambo (Pr Eng), Director of Department of Works Capital Projects Management and Emmanuel Mwangosi the Deputy Director Engineering Division. The Ministry also availed Telecommunication and electronic facilities to contact the respondents while confirming data. Finally, the greatest gratitude and thanksgiving to the Lord, our Creator for availing all these opportunities to handle the whole involvement through what looked like a gargantuan and mammoth task. in TABLE OF CONTENTS TOPIC PAGE Declaration.......................................................................................................................... i Acknowledgement.........................................................................................................................ii Table of contents................................................................................................................ iv List of Figures......................................................................................................................v List of Charts........................................................................................................................v List of Abbreviations...........................................................................................................v Abstract ............................................................................................................................vii CHAPTER ONE: INTRODUCTION..............................................................................1 1.1 Background:................................................................................................................... 1 1.2 Statement of the Problem...............................................................................................5 1.3 Research Objectives....................................................................................................... 7 1.4 Importance of the Study:..............................................................................................8 CHAPTER TWO: LITERATURE REVIEW................................................................ 9 2.1 Manufacturing................................................................................................................9 2.2 Resource Based View....................................................................................................9 2.3 Robert M. Grant Model of Resource Capabilities....................................................... 17 2.4 Technological Capabilities as Organizational Routines.............................................. 18 2.5 Advanced Computer Technologies..............................................................................24 CHAPTER THREE: RESEARCH METHODOLOGY..............................................28 3.1 Research Design:.........................................................................................................28 3.2 Population:...................................................................................................................28 3.3 Data Collection Method...............................................................................................29 3.4 Data Analysis...............................................................................................................29 CHAPTER FOUR: DATA ANALYSIS, FINDINGS AND DISCUSSION............... 31 4.0 Introduction.................................................................................................................. 31 4.1 Company Background information.............................................................................31 4.2: Manufacturing process Technological Resources base..............................................33 4.3 Challenges in implementing an effective manufacturing strategy with available ...35 4.4: Strengths in the operational Technological resource priorities................................. 37 4.5 PART III: RESOURCE BASED VIEW (RBV)..........................................................45 4.6 Challenges to Resource Based View (RBV)...............................................................48 4.7 Sample Production Data and Ms-Excel Trend Analysis for One Plant...................... 50 CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS, LIMITATIONS AND SUGGESTIONS FOR FURTHER STUDY........................... 56 5.1 Summary of findings...................................................................................................56 5.2 Conclusions:................................................................................................................ 57 5.3 Recommendations.....................................•..............................................................58 5.4 Limitations of the Study:............................................................................................ 59 5.5 Suggestions for further research..................................................................................59 REFERENCES:............................................................................................................... 61 APPENDIX 1: QUESTIONNAIRE...............................................................................68 Part I: Company Profile:....................................................................................................68 Part II: Operations Strategy...............................................................................................69 Part III: Resource Based View..........................................................................................71 APPENDIX II: SAMPLE PRODUCTION TREND DATA FOR ONE MANUFACTURER......................................................................................................... 80 iv LIST OF FIGURES AND Ms-EXCEL CHARTS FIGURE PAGE 2.1: Operational Resource Transformation.......................................................................13 2.2: Strategic Alignment................................................................................................... 15 2.3: Aligning Resources, Strategy and Environment....................................................... 16 2.4: A Resource Based Approach to Strategy Analysis: A