Research Insights 5.2 The Core Competence of the Organisation

Marketing Strategy

Source: Prahalad, C. K., and Hamel, G. (1990), ‘The core competence of the organisation’, Harvard Business Review, 68(3), May–June, 79–91

Abstract: the most powerful way to prevail in global competition is still invisible to many companies. During the 1980s, top executives were judged on their ability to restructure, declutter, and delayer their corporations. In the 1990s, they’ll be judged on their ability to identify, cultivate, and exploit the core competencies that make growth possible—indeed, they’ll have to rethink the concept of the corporation itself.

Insight:

This article was ground-breaking because it provided a first important insight into core competencies as a critical means of developing superior business performance. The article led a revolution in management thinking, which moved away from aiming to develop conglomerates comprising disparate and unrelated SBUs towards aiming to develop companies with SBUs that were aligned with each other based on a common set of organizational resource and capabilities.

URL: http://hbr.org/1990/05/the-core-competence-of-the-corporation/ar/1