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ACCA Strategic Professional · Strategic Business Leader · The internal resources, capabilities and competences of an organisation

Fenwick Marine builds luxury yachts. A consultant observes that its master boat-builders' skills were developed over decades, no document describes exactly how they combine techniques, and even Fenwick's managers cannot fully explain the quality. A rival has hired two of Fenwick's former boat-builders but cannot reproduce the quality. Which concept most precisely explains why imitation has failed?

Tacit knowledge and causal ambiguity explain the failure. The skills are built up over decades, are undocumented and are not fully understood even by Fenwick's own managers, so hiring a few individuals does not transfer the way the whole organisation combines them. That makes the competence inimitable.

  1. AStrategic fit between the firm and the external environment
  2. BThreshold capabilities that can be acquired through recruitment
  3. CEconomies of scale from a high production volume
  4. DTacit knowledge and causal ambiguity, which make the competence hard to imitateCorrect

Explanation

The competence depends on tacit, undocumented knowledge embedded in the organisation and its linkages, so even insiders cannot say what causes the quality. This causal ambiguity prevents imitation, even when individuals are hired. Threshold capabilities are by definition imitable, and scale is irrelevant to the facts.

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