How can an organisation enjoy competitive advantage sustainable over time ?

Concept. Sustainable competitive advantage is not created by holding any single economic input. In the resource-based view, an input that every rival can also obtain — cheap labour, mobile capital, an address in a financial centre — can be matched, so it cannot sustain an edge. Advantage lasts only when an organisation combines, integrates and applies its resources in a way competitors cannot readily imitate.

Applying it to this passage. The passage builds the argument input by input, and each step ends the same way:

1. Labour: Japanese workers gave decades of advantage, which then shifted to South Korea, then Malaysia and Mexico, and today to China. The passage concludes that the labour force "is no longer sufficient for competitive advantage".

2. Labour again, in services: IT and service jobs move to India, Singapore and similar countries, and the passage predicts that as skills rise elsewhere this advantage "cannot be sustained through emergence of new competitors".

3. Capital: once restricted by gold coins and paper money, then gathered into regional concentrations where large banks, industries and markets coalesced, and today flowing internationally at rapid speed. The passage concludes that the capital concentrated in New York, London or Tokyo "is no longer sufficient for competitive advantage over other capitalists distributed worldwide".

4. The passage then states the condition directly: "Only if an organization is able to combine, integrate and apply its resources (eg. Land, labour, capital, IT) in an effective manner that is not readily imitable by competitors can such an organization enjoy competitive advantage sustainable over time."

An instrumentality is a means or agency through which something is accomplished — here, the land, labour, capital and IT the organisation has at its disposal. "By effective use of various instrumentalities" is therefore a restatement of the passage’s own condition: it is the effective combination and application of the various resources, not the possession of any one of them, that sustains the advantage. That is the answer.

Cross-check against the other mechanisms named.

• "Through regional capital flows" — the passage says capital today flows internationally at rapid speed and that the capital concentrated in regional centres is no longer sufficient for advantage.

• "Through regional interactions among business players" — the passage states outright that global commerce no longer requires such interactions.

• "By making large banks, industries and markets coalesced" — this describes the earlier stage of regional concentration that the passage presents as superseded, not as a source of lasting advantage.

Confirming example. The passage closes with semiconductors: chips are made principally of sand and common metals, designed in ordinary office buildings with commercially available tools, and fabricated in many industrialized nations. Every physical input is available to all, so land is not the key competitive resource — what remains decisive is how knowledge and resources are combined and applied. The knowledge-based theory of the firm the passage introduces is exactly this idea extended, treating organisational knowledge as a resource at least as powerful as the traditional economic inputs.