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Core IN-Competencies
Riley NayMarriott School of Management
Brigham Young UniversityApril 2010
Agenda• 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.
• Think of a business as a tree…– Leaves-end products– Branches-smaller business units– Trunk-core products– Roots-core competencies
Importance of 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 competency1. Provide access to a wide variety of markets2. Contribute significantly to the end-product
benefits3. 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.
Source: Fiedler
Type of Resistance Reasons for Resistance
Generic Resistance Culture of rejection, of refusal
Person-based Resistance Personality as a rejective person (“nay-sayer”)
Provoked Resistance Too much pressure, overload due to change requirements and implications
Argumentative Resistance Weakness of the intended Concept
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
ExerciseCore 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• Gary Hamel and C. K. Prahalad, (1990) "The Core Competence of the
Corporation", Harvard Business Review, vol. 68, no. 3, May-June 1990, pp 79-93.
• 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/core-
competency.html• http://www.quickmba.com/strategy/core-competencies/
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