Academic journal article Academy of Strategic Management Journal

Understanding, Finding, and Conceptualizing Core Competence Depth: A Framework, Guide, and Generalization for Corporate Managers and Research Professionals

Academic journal article Academy of Strategic Management Journal

Understanding, Finding, and Conceptualizing Core Competence Depth: A Framework, Guide, and Generalization for Corporate Managers and Research Professionals

Article excerpt

INTRODUCTION

The construct of the core competence--sometimes called by other names such as organizational competencies or distinctive capabilities--has been widely studied (Bogner & Thomas 1994; Fowler et. al. 2000; Lei 2000; Leonard-Barton 1992; Nelson & Winter 1982; Pitt & Clarke 1999; Post 1997; Sanchez et. al. 1996; Walsh & Linton 2001; Winter 2003), especially since the publication of Prahalad and Hamel's influential 1990 article, "The Core Competence of the Corporation." Since then, empirical and conceptual research on this concept has brought about many views of what these competencies are and how they can be applied to create better products and services.

In general, core competencies have been seen as capabilities held by people within a firm that, when applied through corporate operational processes to create products and services, make a critical contribution to corporate competitiveness. For a more complete discussion of core competencies, see Edgar and Lockwood (2008), which reviews the core competencies literature, describes their elements, and identifies research that remains to be done.

What has not been published, however, is a paper intended for intellectual leaders within corporations and their executives to help them understand the structure of core competencies, identify which key aspects of the competence their firms hold more deeply, and recognize concepts pertaining to competence depth that apply to all core competencies. This paper provides such direction in three ways.

First, the paper presents a conceptual framework, drawn from previous research, for understanding the core competencies of a firm, revealing the internal dynamic of the core competence, the elements of the core competence, and the resulting competence breadth.

Second, utilizing concrete examples arising from firms' knowledge of communication networks, documents, and computing the paper presents a useful methodological guide for applying this framework to discover the depth of core competencies held by a particular firm. This guide has several advantages. Primarily employing patent analysis and supplemented by interviews, it is inexpensive to do. It draws upon numerous internal and external perspectives as to the depth of a firm's core competencies. It also illuminates the complexity usually found within the depth of a core competence while making it comprehensible.

Third, the paper presents a generalized conceptualization of core competence depth arising from the use of this methodology. This generalization addresses two important questions regarding the underlying reality about which people holding a core competence are deeply knowledgeable: 1) what does it mean to understand something deeply? and 2) what does it mean to be able to perform a skill proficiently? Answering these questions reveals that competence depth encompasses understanding things that are relatively stable, known as entities, as well as things which are inherently dynamic, known as processes. Moreover, depth includes being able to move beyond understanding entities or processes and to do things like engaging in processes by performing skills well. It also means understanding or being able to do the basic forms of entities or processes, their versions, and the variations of these basic forms and versions. As this occurs, core competence depth grows in three important ways--horizontally, vertically, and cumulatively. (Please note that this paper is a follow-up to Edgar and Lockwood (2011), which presented a methodology for identifying core competencies' structure through determining their breadth. In contrast, this paper presents a means for discovering the deeply held aspects within that breadth that contribute to core competencies' competitive power.)

CORE COMPETENCE FRAMEWORK

The framework for discovering core competencies described below draws upon research that examined four corporations (Edgar & Lockwood, 2008, 2011), each with annual revenues in excess of one billion dollars. …

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