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

The Impact of Core Competencies on Competitive Advantage: Strategic Challenge Jehad S. Bani-Hani Department of Business Administration, Jadara University, Irbid, Jordan E-mail: Tel: +962-777404102; Fax: +962-2-7201210 Faleh, Abdelgader AlHawary Department of Business Administration Applied Science Private University, Amman, Jordan E-mail: 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...

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