Development of a structured framework for core competence evaluation in the manufacturing and service industries
During the last decade, the theory of competence-based competition has drawn a considerable amount of attention from the academic and practitioners alike. The theory asserts that corporate and business strategies should be built upon the strengths of the core competencies of a firm. The aim of this research is to construct a structured and practical framework for core competence evaluation. The thesis begins with the introduction of the basic concept of core competencies through presenting three core competence-based approaches. Research methodology is described in detail. Two data collection methods are used for this study: case study and questionnaire survey. By reviewing the literature, six competence identification models are identified and analysed. The strengths and limitations of these models are discussed. Having provided working definitions for firm tangible and intangible assets, a relationship between resource and capability is developed and examined. Using financial and non-financial performance measures, Analytic Hierarchy Process (AHP) technique is employed to determine the key capabilities of firms. Subsequently using "C llecti enc s" and "uniqueness" attributes, a comprehensive method for evaluating competencies is provided. The attribute 'collectiveness' is introduced for determining the 'universal usefulness' of these candidates in the scope of a business. The attribute 'uniqueness' is employed for assessing the distinctiveness of the potential competence candidates in competition. Competencies are evaluated by subjectively assigning relevant scores to these characteristics. The effectiveness of this method is demonstrated through to case studies The author believes that being unique in competition is not sufficient for core competencies to keep their strategic values in dynamic competitive environment. A true core competence should be able to continuously create new business options for the firm Therefore, this thesis emphases that to be core competence, the candidates must be strategically flexible. By employing "strategic flexibility" as the main criterion, this study has presented a distinctive mechanism to differentiate core competencies from the competencies. The dynamic nature of the core competencies is evaluated using characteristics such as resource re-deployment and routine re-organisation. The generic nature of this framework is tested through conducting two case studies and a questionnaire survey This thesis makes three main contributions to the existing body of knowledge. Firstly the thesis provides a systematic and practical core competence architecture which can be used for firms to accurately understand the concept of core competence. Secondly the thesis gives a detailed and structured core competence evaluation framework which can be used for firms to identify their business strengths and weaknesses systematically. Thirdly by conducting a questionnaire survey, the thesis presents a snapshot of the UK manufacturing and service industry core competencies, and bridges the gap between theory and practice The framework may be viewed as a practical, robust and generic tool to benchmark a service, manufacturing or public sector organisation. The outcome of this study would help companies in strategic decision-making with regards to diversification, focusing and investment in competence building activities.