Core IN-Competencies
Riley Nay
Marriott School of Management
Brigham Young University
April 2010
Agenda
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Core Competencies
Test for Competency
Core products (activity)
Core IN-Competencies
Developing Core Competencies
What is a Core Competency?
• A unique bundle of skills and technologies
that enables a firm to provide particular
benefits to customers.
• Core Competencies give firms competitive
advantage.
Importance of Core Competencies
• Think of a business as a tree…
– Leaves-end products
– Branches-smaller business units
– Trunk-core products
– Roots-core competencies
Source: Prahalad & Hamel
Core Products
Source: Prahalad & Hamel
Test for Competencies
• There are three questions a company will
ask themselves when determining if an
activity is a core competency
1. Provide access to a wide variety of markets
2. Contribute significantly to the end-product
benefits
3. Is difficult for competitors to imitate
Source: Prahalad & Hamel
Activity
What is a Core IN-Competency?
• An incapability in a business that inhibits
competition.
• Negative Inertia
Core IN-Competencies
• Examples of core IN-competencies
– Change resistance
– Cultural or operational inhibiters
– Focus shifts
– Forgoing Opportunities
Change Resistance
• Resistance seeks to challenge, disrupt, or
invert prevailing assumptions discourses,
and power relationships.
Type of Resistance
Reasons for Resistance
Generic Resistance
Culture of rejection, of refusal
Person-based Resistance
Personality as a rejective person (“naysayer”)
Provoked Resistance
Too much pressure, overload due to
change requirements and implications
Argumentative Resistance
Weakness of the intended Concept
Source: Fiedler
Exercise
• In your groups, come up with a timeline of
your business and document the significant
changes your business has been through.
• After developing the timeline, discuss how
employees handled the changes.
Cultural Inhibiters
• GM
• They have been known to have
“adversarial” relationships with their
suppliers.
• A GM executive:
– “We don’t know what a supplier relationship
gets you. It just locks you in. We don’t even
like using the word partner.”
Source: Enright
Focus Shifts
• Toyota
• Once known for its quality standards,
Toyota has shifted its focus.
Quality
Cost
Forgoing Opportunities
• Companies like GE, Thorn, Motorola, and
GEC left the color TV business in the 1970’s
and 1980’s.
• They regarded the industry as “mature.”
Source: Prahalad & Hamel
Developing Core Competencies
• Refined definition-Core competencies are
the collective learning in the organization.
• Companies need to harmonize streams of
technology.
– Marketing, Engineering, R & D, etc.
Source: Prahalad & Hamel
Strategic Architecture
• Executives in companies need to construct
their corporate culture around competence
building.
• Executives need to eliminate or manage
properly their core IN-competencies
Source: Prahalad & Hamel
Exercise
Core Competencies
Core IN-competencies
Summary
• Understand what core competencies are and
their importance in organizations.
• Understand what core IN-competencies are
and how to identify them within your own
company.
• Develop your core competencies through
collective learning.
• Build your corporate strategic architecture
around your core competencies.
Readings
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Gary Hamel and C. K. Prahalad, (1990) "The Core Competence of the
Corporation", Harvard Business Review, vol. 68, no. 3, May-June 1990, pp 7993.
Michael Enright, (2003) “Buyer-Supplier Relationships”, The Centre for Asian
Business Cases, The University of Hong Kong
Stefan Fiedler, (2010) “Managing Resistance in an Organizational
transformation: A case study from a mobile operator company”, International
Journal of Project Management, vol. 28, iss. 4, May 2010, pp 370-383
http://www.businessdictionary.com/definition/core-competencies.html
http://ivythesis.typepad.com/term_paper_topics/2009/12/corecompetency.html
http://www.quickmba.com/strategy/core-competencies/