Core Competence
C e n t r e o f M a n a g
Core Competence
Introduction:core competency is a concept in management theory originally advocated by CK Prahalad, and Gary Hamel, two business book writers. In their view a core competency is a specific factor that a business sees as being central to the way it, or its employees, works. A core competency can take various forms, including technical/subject matter know-how, a reliable process and/or close relationships with customers and suppliers. It may also include product development or culture, such as employee dedication, best Human Resource Management (HRM), good market coverage etc. Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value. Core competencies are the collective learning in organizations, and involve how to coordinate diverse production skills and integrate multiple streams of technologies. It is communication, an involvement and a deep commitment to working across organizational boundaries. Few companies are likely to build world leadership in more than five or six fundamental competencies. Hamel and Prahalad (1990) introduced the concept of Core Competency in a Harvard Business Review. They defined that a core competency is "an area of specialized expertisethat is the result of harmonizing complex streams of technology and work activity." They gave the example of Sony , which had to ensure that technologist, engineers, and marketershave a shared understanding of customer needs and of technological possibilities, in order tobring miniaturization, their core competency, to their products. Similarly, in the service industry, Citicorp’s competence in systems had provided them with the means to differentiate itself from many financial service institutions.Today, many firms are able to recognize and leverage on their core competencies to bring compelling products to the market.This paper will give a short
Core Competence
Introduction:core competency is a concept in management theory originally advocated by CK Prahalad, and Gary Hamel, two business book writers. In their view a core competency is a specific factor that a business sees as being central to the way it, or its employees, works. A core competency can take various forms, including technical/subject matter know-how, a reliable process and/or close relationships with customers and suppliers. It may also include product development or culture, such as employee dedication, best Human Resource Management (HRM), good market coverage etc. Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value. Core competencies are the collective learning in organizations, and involve how to coordinate diverse production skills and integrate multiple streams of technologies. It is communication, an involvement and a deep commitment to working across organizational boundaries. Few companies are likely to build world leadership in more than five or six fundamental competencies. Hamel and Prahalad (1990) introduced the concept of Core Competency in a Harvard Business Review. They defined that a core competency is "an area of specialized expertisethat is the result of harmonizing complex streams of technology and work activity." They gave the example of Sony , which had to ensure that technologist, engineers, and marketershave a shared understanding of customer needs and of technological possibilities, in order tobring miniaturization, their core competency, to their products. Similarly, in the service industry, Citicorp’s competence in systems had provided them with the means to differentiate itself from many financial service institutions.Today, many firms are able to recognize and leverage on their core competencies to bring compelling products to the market.This paper will give a short
References: 1) C. K. Prahalad and G. Hamel,”The Core Competence of the Corporation.” ,HarvardBusiness Review May-June, 1990 2) http://en.wikipedia.org/wiki/Core_competency 3) http://www.management-training1.com/case-studies.html 4) http://home.ubalt.edu/ntsbmilb/chapter4 5) Creative Technology Limited SWOT Analysis , DataMonitor Plc., 2003 6) Microsoft Competencies Overview , Microsoft.com, 2007.https://partner.microsoft.com/UK/40011230 Retrieved on 24 Mar 2007 7) Microsoft Corporation Annual Report 2006 , Microsoft.com, 2007.http://www.microsoft.com/msft/reports/ar06/staticversion/10k_fr_dis.html Retrieved on 30 Mar 2007. 8) Competing for the Future By Gary Hamel and C.K. Prahalad 9) Core Compentencies by Beth Mcneil 10) http://www.arl.org/bm~doc/spec270web.pdf 11) Cohen, Warren, Simons, John,Fast Companies, U.S. News and World Report Vol.119 Issue 1, 1995. 12) Creative Technology F2Q07 Earnings Call Transcript , Seeking Alpha.com, 2007.http://seekingalpha.com/article/25592 Submitted by:ANIRUDH GAUR 200901006