Industry and Firm Effect-Living in Harmony Delivering Healthcare Competitive Advantages

Krisna Nugraha, Mohammad Hamsal, Harjanto Prabowo, VebryHaryati Lubis

Industry effects and firm effects have been, on average, the two top effects for explaining variance across firm performance data, each effect has a strong theoretical foundation-the industry effect supported by the IO literature and the firm effect supported by the RBV literature. It is clearly defined that neither industry effects nor firm effects should be considered in isolation. That argument forms the basis of considering a firm– industry interaction as significant in explaining firm performance variance. This study is conducted using literature review approach concentrating on industry and firm effect which rely heavily on Resource Based Theory (RBT) and Industrial Organizational theory (IO). To enrich our analysis, we conduct an interview with Chief Operating Officer Ichsan Medical Center Bintaro, West Java Indonesia, a Type C hospital established on July 25, 2003. This paper has shown evidence from literatures and expert judgement regarding the balance of industry effect and firm effect. We can identify at least four important areas to be considered by healthcare industry to increase its competitiveness in this hard time condition. These areas originated from external and internal environment of the organization encompassing the adoption of IO and RBT delivering competitive advantages.

Volume 12 | Issue 6

Pages: 2882-2887

DOI: 10.5373/JARDCS/V12I6/S20201250