Dynamic Capabilities: Top Executive Audits and Hoshin Kanri at Nissan South Africa

Purpose – The purpose of this paper is to examine the use of top executive audits (TEAs) as part of hoshin kanri (policy management) at Nissan South Africa (NSA). It relates these to the emerging importance of core competencies in the resource-based view of strategy to discuss “nested” sets of dynamic capabilities and superior performance.

Design/methodology/approach – The case study of NSA is considered in terms of how the firm defines its core areas, evaluates its business methodologies and management philosophies, and conducts its diagnosis of management. This was through real time internal company observation during an intensive phase of organizational change and documentation supplied by a senior manager.

Findings – The style of TEAs at Nissan is related to the concepts of “core competency” and “dynamic capability.” The core business areas of NSA are organization-wide competencies necessary for competitive success, and the management of these is shown to be most effective in the form of a TEA, which in the hoshin kanri form, is arguably a nested set of dynamic capabilities.

Originality/value – The paper concludes that hoshin kanri and TEAs are used at Nissan as a higher order dynamic capability to develo0p both core competences in key areas of the business, and core capabilities in terms of its corporate methodologies and business philosophies. The recovery of Nissan during the East Asian Crisis of the late-1990s was the result of improved productivity practices, such as the uses of hoshin kanri and TEAs, and not just of economic recovery.