Core Competence LO19840
Fri, 13 Nov 1998 16:32:06 -0600

Replying to LO19821 --

Mr. Thomas,

A modest comment:

The question you raise is one of the most debated issue among strategy
scholars, particularly among resoource based view theorists. WHat is core
competence ? This still eludes!! Collis (SMJ, ?) argues that this is an
"infinite regress problem".

However, Combinig resource based view and Evolutionary economics theory,
scholars argue that competence resides in cognitive routines and
organizational processes, that are almost impossible to imitate or copy or

In other words, it is not the fixed organizational assets, but a
completely dynamic processes such as how organizations acquire knowledge,
and transform knowledge determines the competitive advantage of the firm.

Essentially, the cognition, creativity, and committment are the three
meta-strategic elements that determines the competitve advantage.

Thomas, Kisha wrote:

> We are doing a group critical evaluation of Prahalad and Hamel' s Harvard
> Review Article "The Core Competence of the Corporation". My group is
> taking the stance in support of the article. We just received our draft
> back from our professor and we have more work to do (quickly). Some
> questions the professor noted were: Is there a clear definition of core
> competence that one can accept? What was the basis of the NEC/GTE
> comparision? How does this strategy affect firm value? Our difficulty is
> that we realize some things are vague in the article but the strategy is
> worthwhile.


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