Dear all
Issue 21.3 of Competitiveness Review has now published – the articles are listed below, and the editorial can be found at the foot of this email.  My apologies if you receive this news more than once.
Kind regards
Dr Martyn Lawrence
Senior Publisher - CR
Article Title: Measuring organizational renewal capability: case training service business
Authors: Jaana Junell, Pirjo Ståhle
Article Type: Research paper
Keywords: Change management, Continuing development, Organizational development, Organizational innovation, Strategic change
Pages: 247-268
Link to Page:
Article Title: Entrepreneurial potential in Argentina: a SWOT analysis
Authors: Marilyn M. Helms, Martín A. Rodríguez, Lisandro de los Ríos, William (Bill) Hargrave
Article Type: Research paper
Keywords: Argentina, Business development, Culture, Economics, Entrepreneurialism, SWOT analysis
Pages: 269-287
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Article Title: Toward the promotion of effective performance of entry-level managers: the case of Portugal
Authors: Carlos Ferreira Gomes, Mahmoud M. Yasin
Article Type: Research paper
Keywords: Higher education, Management effectiveness, Managers, Organizational performance, Portugal
Pages: 288-305
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Article Title: Channel power struggle between a manufacturer giant and a retailer giant in China: Who is the winner?
Authors: Clement S.F. Chow, Erdener Kaynak, Cathy J. Yang
Article Type: Research paper
Keywords: Channel relationships, China, Influence, Manufacturing industries, Retailers
Pages: 306-321
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Article Title: Deriving competitive advantage from real exchange rate changes
Authors: Jacques A. Schnabel
Article Type: Research paper
Keywords: Competitive advantage, Exchange rates, Exports, Imports, Mean, Supply chain management
Pages: 322-327
Link to Page:
Editorial: “Competitiveness and national policies”
(Abbas Ali)
Viewing development and competitiveness strictly in terms of economic indicators is not only problematic but a fatal mistake. Rethinking this outlook should take priority both in global discourse and policy direction. The current events in Egypt have revealed that economic expectations and prescriptions divorced from social and political conditions often lead to unworkable conclusions. Indeed, Egypt’s popular uprising has called for rethinking the premise that global approaches primarily rely on economic indicators.
In recent months, both the World Bank (2010a, b) and the International Monetary Fund (IMF, 2010) have praised Egypt, introducing it as an example of a country that is making economic progress. The World Bank (2010a, b), lauded Egypt for its economic diversification and growth. The IMF (2010), in its Regional Economic Outlook, stated that Egypt’s “annual nonagricultural GDP growth has increased progressively since the first quarter of 2009, reaching 5.5-6 percent in the first quarter of 2010 and offsetting lower growth in agriculture”. The report praised Egypt for streamlining and lowering tariffs. Furthermore, the World Bank (2010a, b), in its Doing business 2011 Report, highlighted the progress that Egypt has made in deregulations and ranked it among the top ten developing countries that have improved the most in trading across borders.
In an interview with Wroughton (2011), Reuters, World Bank President, Robert Zoellick, seemed to ignore the connection between the political turmoil and the economic misery in Egypt stating, “We are in a very fragile situation, not only for Egypt but for a number of countries across the Middle East […]. It is extremely difficult at this point to read exactly what will happen”. This statement, along with other reports compiled by the World Bank and IMF, manifest that these institutions have difficulty in looking further than economic indicators and are over occupied with integrating developing nations in the global marketplace instead of devising adequate policies for alleviating economic and social malaise across the globe, including enhancing the potential for building sound legal institutions.
The preceding discussion, however, does not overlook the fact that other institutions and experts have long highlighted the linkage between economic and socio-political issues. In fact, the issue of development is a reoccurring theme on the global economic scene; its practical dimensions have not escaped those who have addressed it over the years. Experts on development have always underscored the socio-political aspects of development and repeatedly warned against decoupling economic from social and political dimensions. This has led to a relatively balanced development approach and sound analyses.
However, when it comes to national competitiveness, there is a conspicuous lack of understanding of the linkage between competitiveness and socio-political progress. Strategically, the welfare of the people should be at the core of competitiveness concern. Otherwise, competitiveness has no meaning. In the end, competitiveness is derived from the benefits generated for the people; not the few powerful elite.
Back in 2000 and 2008 (Ali, 2008), we defined national competitiveness as a nation’s ability to improve the economic and social welfare of its people through active and purposeful participation in the global marketplace. As we argued then, the eroding of a nation’s position in world affairs has serious political, social and economic consequences. We also indicated that there should be a focus on both the input and output aspect of competitiveness. Competitiveness encompasses all those factors that are essential for coping with global competition (e.g. vital economic and civil institutions, adequate infrastructure including educational systems, and a skilled and knowledgeable workforce that is an active contributor to socio-political and economic life) and improving the welfare of the population. The latter includes sustaining a satisfactory standard of living, safe environment, dignified life, etc. and constitutes the primary outcome of competitiveness.
By definition, the proposition that the outcomes of competitiveness, be they high-living standards or social welfare, are shaped primarily, though not totally, by conditions in the home environment. It is the home environment that facilitates and makes it possible for citizens to enjoy economic opportunities, prosperity, freedom of expression and association and participation in determining their future and that of the next generation. When the home environment limits the freedom to participate economically and politically and constrains social growth and potential, competitiveness will not be fully realized, even when per capita income is relatively high.
Though the Global Competitiveness Report in the last few years has moved away from its original narrow definition of competitiveness (World Economic Forum, 1998), “the ability of a country to achieve sustained high rates of growth in gross domestic product (GDP) per capita”, its new definition still has its own shortcomings. The World Economic Forum (2011) defines competitiveness as “the set of institutions, policies, and factors that determine the level of productivity of a country”. This definition should clearly encompass the welfare of the people by underlining that the rights of people to live free of fear and in dignity are an essential pillar of competitiveness. Furthermore, disparity in income and the thriving of corruption render per capita income a useless measure for economic prosperity and development. In a society where a few elite control most of the national wealth and their deceptions and frauds are tolerated, the majority of the population, as in Egypt, does not benefit much from growth in GDP.
Indeed, the popular uprising in Egypt has demonstrated that, for many decades, the people there have not enjoyed the fruits of economic openness and liberalization – not only because the economic reform was designed to benefit those who are well connected politically and well to do economically but also because ordinary citizens have experienced economic and political marginalization. This marginalization has alienated a large segment of the population and induced many of its members to seek employment overseas.
The Global Competitiveness Report 2010-2011 (World Economic Forum, 2011) has noted that Egypt has moved down from the rank of 70 in 2009-2010 to 81st in this year’s rankings. However, this year, Egypt rated fairly high on institutions. The Report defines an institution as a “legal and administrative framework within which individuals, firms, and governments interact to generate income and wealth in the economy”. The recent upheaval evidences that institutions in Egypt are not that conducive for a broader economic prosperity and for fair access to economic opportunities.
It is imperative that the World Economic Forum (1998), the publisher of the Global Competitiveness Report, and other international institutions should rethink their definition of competitiveness and focus more on the welfare of the people. While each country may have its own circumstances, the ultimate measure of competitiveness of any nation must include benefits generated to a broader population. Power elites play a significant role in any society, however, their size, especially in developing societies, is considerably small. They neither represent the whole population nor do they reflect the aspirations of the society.
As we argued in Ali (2008), national policies that hinder or restrain broader participation of citizens in deciding their future impairs national productivity and does not contribute to national competitiveness and the well-being of the society. Equating national competitiveness with productivity is, at best, inadequate and should never be used as a sole standard for measuring a national economy’s growth potential. The health and competitiveness of any nation should be judged on whether or not the economic growth will improve the welfare of the population and safeguard the interests of future generation.
Ali, A.J. (2008), “National competitiveness in a changing world”, Competitiveness Review, Vol. 18 No. 3, pp. 173–5
IMF (2010), “Regional economic outlook: Middle East and Central Asia”, October, available at:
(The) World Bank (2010a), “Doing business 2011: making a difference for entrepreneurs”, available at:
(The) World Bank (2010b), “MENA economic development and prospects”, October 9, available at:–PressBriefingFINAL2.pdf
World Economic Forum (1998), 1998 Global Competitiveness Report, World Economic Forum, Davos
World Economic Forum (2011), The Global Competitiveness Report 2010-2011, World Economic Forum, Davos
Wroughton, L. (2011), “Interview-Middle East situation ‘fragile’ – World Bank chief”, Reuters, February 2, available at:

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