Corporate adaptability: a route to sustainable competitive advantage

Abstract

The ecological principal of the survival of the most adaptable is well established. The paper applies this principal to the competitive corporate environment by examining how adaptability is linked with both corporate efficiency and long-term sustainability. Adaptability is defined as a function of power and accountability within an organisation. Power refers to the degrees of freedom extended to management to control their operations. Accountability concerns the extent to which management is held responsible for its performance. The paper describes a case study based the European rail sector. An econometric model is developed in which the degree of power, level of accountability and hence index of adaptability for each company is scored. The efficiency of each company is quantified and a causal relationship established between adaptability and efficiency. The analysis goes on to postulate the efficiency gains that would result from the introduction of a number of measures aimed at enhancing an organisation's adaptability. The results have a number of important implications for both public and private sector organisations. They also have implications for the management of major projects.