Determining the competitiveness of UK's consulting engineering firms through the dynamic capabilities view

The consulting engineering firm is viewed from the dynamic capabilities view (Teece, et al., 1997 and Teece, 2005) which prescribes identifying sector core competences that provide a starting point to understand the sector fundamental business and the core competences that firms compete to develop dynamic capabilities on. The theoretical underpinning of the research is developed from the literature of Professional Service Firms. It analyses the performance management of the consulting engineering firm, using the Balanced Professional Service firm model (Maister, 1997) and identifies the core competences of the consulting engineering sector that are used by firms to develop dynamic capabilities of direct relationship to competitive advantage and competitiveness. Then a comprehensive framework of international competitiveness is put forward for measurement. This framework consists of firm-specific dynamic capabilities and critical success factors with direct impact on performance of the consulting engineering firm. The research identifies critical success factors based on examining six international consulting engineering firms – three publicly quoted and three privately owned – that achieved significant performance in the international markets in the last ten years. These comprehensive case studies include methodical assessment of the ‘international competitiveness framework' – scoring, weighting and aggregation that showed the importance that each firm places on dynamic capabilities. The research also thoroughly reviews and analyses the historical developments of the six firms to objectively develop a realist view of the critical success factors. These success factors were consequently validated by thirteen supplementary engineering consultancies in an international business focus group in the UK Association for Consultancy and Engineering. The research identifies four key determinants of the competitiveness of UK consulting engineering firms in the international markets: (i) financial capabilities (cash flow), (ii) organisational capabilities (knowledge management); (iii) international operational capabilities (operational efficiency); and (iv) technical capabilities (professionals). The linkages and interrelationships between these critical success factors and competitiveness of the firm are established and elucidated in an explanatory model. The study further shows that the international strategy of the firm determines the scope and relationships between these capabilities.