Core Competencies

Topics: Strategic management, Management, Regression analysis Pages: 18 (6146 words) Published: March 8, 2011
International Bulletin of Business Administration ISSN: 1451-243X Issue 6 (2009) © EuroJournals, Inc. 2009 http://www.eurojournals.com

The Impact of Core Competencies on Competitive Advantage: Strategic Challenge Jehad S. Bani-Hani Department of Business Administration, Jadara University, Irbid, Jordan E-mail: dr_jbanihani@yahoo.com Tel: +962-777404102; Fax: +962-2-7201210 Faleh, Abdelgader AlHawary Department of Business Administration Applied Science Private University, Amman, Jordan E-mail: Alhawary2002@yahoo.com Tel: +962-795777198; Fax: +962- 6- 5232899 Abstract This study examines the impact of core competencies on competitive advantage and it applied on Jordanian insurance organizations. The population for this study consisted of all the Jordanian insurance organizations heads. A simple random sampling technique was used to select the respondents surveyed for this study, a total of 61 questionnaires were administered to respondents chosen from 18 company; statistical tools were used to test the hypothesis such as: spearman correlation, and multiple regression. The findings indicated that there is a significant positive relationship between core competencies and competitive advantage from the sample point view. The study also showed that the core competencies had a significant impact on competitive advantage. Keywords: Core Competence, Organizations Performance, Competitive Advantage, Jordan Insurance Companies

1. Introduction
Companies need to learn to manage tomorrow's opportunities as competently as they manage today's businesses. The discovery of new competitive space is helped when a company has a class of technology generalists that can move from one discipline to another. The new market development can be geared up by developing the capability to redeploy the human resources quickly from one business opportunity to another. It is the top management's responsibility to inspire the organization with a view of distinct goals and help them to achieve and reach the set target (Hamel and Prahalad, 1991). Building core competence becomes essential to competitive advantage building, because advantages emanating from the product-price-performance-tradeoffs are almost short term. Especially in an era where technologies are altering the existing boundaries of business; advantage can last only through competence enjoyed at the very roots of products. And only through expertise over several technologies and a complete command on their infinite variety of users, a company can occupy a highly advantageous position. An organization's management needs to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adopt quickly to changing opportunities. The corporation is like a tree that grows from its roots, core products are nourished by competencies and engender business units, whose fruit are products. Three 93

tests are proposed to identify core competencies in an organization: a core competence provides potential access to a wide variety of markets, it should make a significant contribution to the perceived customer benefits of the end product, and finally a core competence should be difficult for competitors to imitate. The core products provide a tangible link between identified core competencies and the end products. The real competitive advantage lies in integrating operations for the sake of hitting demand quality targets or meeting specialized customer needs. (Ramaswamy and Namakumari 1996, Banerjee and Krishnamoorty 1995, Hamel and Prahalad 1990) The organizations need to build its strategies within different clear scenarios, in different ways, based on different competencies for the purposes of achieving real advantages in the shadow of unknown, risk, and uncertain future. Therefore, The ultimate purpose of this study is to investigate the impact of core competencies on competitive advantage.

2. Study Objectives
Basically, the lack of...


References: [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] Banerjee S. and Krishnamorthy S. (1995). Joint ventures as a Technology Strategy. Indian management Journal. March, 57-64. Branzei, O., Thornhill, S. (2006). "From ordinary resources to extraordinary performance: environmental moderators of competitive advantage". Strategic Organization, 4(1), pp.11-41. Cheng, Yung-Hsiang, and Yeh, Chian-Yu (2007). Core competencies and sustainable competitive advantage in air-cargo forwarding: evidence from Taiwan. Transportation Journal, Jun. Clardy, Alan (2008). The strategic role of Human Resource Development in managing core competencies. Human Resource Development International, April 11(2), pp183-197. Clark, D.N. (2000). "Implementation issues in core competence strategy making", Strategic Change, 9(2), pp.115-27. Danneels, E. (2002). "The dynamics of product innovation and firm competences". Strategic Management Journal, 23(12), pp.1095-121. Eden, C., Ackermann, F. (2000). "Mapping distinctive competencies: a systemic approach". Journal of the Operational Research Society, 51(1), pp.12-21. Fiol, C. Marlene (2001). Revisiting an identity-based view of sustainable competitive advantage. Journal of Management, 27(2001), 691-699. Hafeez, K., Y. Zhang, and N. Malak (2002). "Core Competence for Sustainable Competitive Advantage: A Structured Methodology for Identifying Core Competence". Transactions of engineering management, 49(1), pp. 28-35. Hafsi, T., Thomas, H. (2005). "The field of strategy: in search of a walking stick". European Management Journal, 23(5), pp.507-19. Hair, J., Anderson R., Tatham, R. and Black, W. (1998). Multivariate Data Analysis, 5th ed., Upper Saddle River, Nj; Prentice-Hall. Hair, J., Babin, B., Money, A., and Samouel, P. (2003). Essential of Business Researh Methods. Lehigh Publishing, Inc. Hamel G. and Prahalad C.K. (1990). The Core Competence of the Corporation. Harvard Business Review. May-June, 79-91. Hamel G. and Prahalad C.K. (1991). Corporate Imagination and Expeditionary Marketing. Harvard Business Review. july-Aug., 81-92. Hamel G. and Prahalad C.K. (1994). Competing for the Future. Harvard Business School Press. Boston, Massachusetts. Heikkilä, J., Cordon, C. (2002). "Outsourcing: a core or non-core strategic management decision?". Strategic Change, 11(.June-July), pp.183-93. Helfat, C.E., Peteraf, M.A. (2003). "The dynamic resource-based view: capability lifecycles". Strategic Management Journal, 24(10), pp.997-1010. Javidan, M. (1998). "Core competence: what does it mean in practice?". Long Range Planning, 31(1), pp.60-71. Johnson, Gerry, & Scholes, Keven. (2002). Exploring Corporate Strategy. 6th ed., Harlow: Prentice Hall Kak, Anjana (2002). Sustainable Competitive Advantage with Core Competence : A Review, Global Journal of Flexible Systems Management, Dec. Ljungquist, Urban (2007). Core competency beyond identification: presentation of a model. Management Decision, 45(3), pp: 393-402 Ljungquist, Urban. (2008). "Specification of core competence and associated components: a proposed model and a case illustration". European Business Review, 20(1). Makadok, R. (2001). "Toward a synthesis of the resource-based and dynamic-capability views of rent creation". Strategic Management Journal, 22(5), pp.387-401 103
[24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39]
Markides C.C. and Williamson PJ. (1994). Related Diversification Core Competencies and Corporate Performance. Strategic Management Journal, 15,149-165. Mooney, Anmn, (2007). Core Competence, Distinctive Competence, and Competitive Advantage: What Is the Difference?. Journal of Education Business, Nov/Dec 83(2), pp110115 Peteraf, M.A., Bergen, M.E. (2003). "Scanning dynamic competitive landscapes: a marketbased and resource-based framework". Strategic Management Journal, 24(10), pp.1027-41. Porter M. (1980). Competitive Strategy. The Free Press. New York. Porter M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. The Free Press, New York. Porter M.E. (1987). From competitive advantage to corporate strategy. Harvard Business Review. May-June, 43-59. Ramaswami V.S. and Namakumari S. (1996). Strategic Planning for Corporate Success. Macmillan India Limited: New Delhi. Ray, G., Barney, J., Muhanna, W.A. (2004). "Capabilities, business processes and competitive advantage: choosing the dependent variable in empirical tests of the resource-based view". Strategic Management Journal, 25(1), pp.23-37. Sanchez, R. (2004). "Understanding competence-based management: identifying and managing five modes of competence". Journal of Business Research, 57(5), pp.518-32. Savory, C. (2006). "Translating knowledge to build technological competence". Management Decision, 44(8), pp.1052-76. Sekaran, Uma. (2003). Research Methods for Business: A Skill-Buildings Approach. 4th ed., New York: John Wiley & Sons Inc Sinha A. (1998) Business Today, july 22. Spanos, Y.E., Prastacos, G. (2004). "Understanding organizational capabilities: towards a conceptual framework". Journal of Knowledge Management, 3(3), pp.31-43 Srivastava, Shirish C. (2005). Managing Core Competence of the Organization, VIKaLPA30(4), pp 49-63 Teece, D.J., Pisano, G., Shuen, A. (1997). "Dynamic capabilities and strategic management". Strategic Management Journal, 18(7), pp.509-33. Wang, Y., Lo, H.-P., Yang, Y. (2004). "The constituents of core competencies and firm performance: evidence from high-technology firms in China", Journal of Engineering and Technology Management, 21(4), pp.249-280.
104
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Core Competencies and Competitive Advantages Essay
  • Competencies in Hr Essay
  • Sustainable Competitive Advantage Through Core Competencies in a Resource Based Approach Essay
  • Essay on Strategic Management and Core Competence
  • Nikes Core Competencies Exist In Their Essay
  • Core Competence of the Corporation Essay
  • Core Competencies of Business Strategy Research Paper
  • Competence of the Aviation Industry/Core Competence of British Airways Essay

Become a StudyMode Member

Sign Up - It's Free