Strategic Management and Core Competencies: Theory and Application

Let me be honest with you—there is a lot we do not know about competence development. Too much, in fact. For one thing, the realization that competencies need to be developed is actually quite new in the literature and needs to be explored thoroughly. At the same time, companies all over the world embrace the idea of competencies and competence development and develop interesting solutions to the problems that we theoretical people have—albeit not always consistent or perfect. Thus, this chapter is based on my empirical observations as well as theoretical considerations, perhaps a little more than I could have wanted. But this is a first step in a long process of coming to terms with the idea of competence development.

Hence, this chapter is concerned with the formulation of a framework for understanding the development and change of the competencies of firms. Today, there is near universal agreement that the competitiveness of firms rests on the (core) competencies that firms possess; however, little attention has been devoted to the notion of competence development. I will argue that there is a need for management practice of competence development. I will also argue that organizational learning theory is a key to understanding competence development and based on this, I propose a model for competence development. The model is discussed and illustrated by means of a case study.

Today, there seems to be near total agreement on the assertion that the notion of “core competencies” is paramount to explaining compet-

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