Path(ological) Dependency? Core Competencies from an Organizational Perspective
| Date | 01 September 1998 |
| DOI | http://doi.org/10.1111/1467-8551.00086 |
| Published date | 01 September 1998 |
Introduction
The 1990 paper on core competencies by Prahalad
and Hamel is the most reprinted article in the
history of the Harvard Business Review. At a prac-
tical level, it has prompted many companies in
both the USA and the UK to undertake the search
for their own core competencies (e.g. Collis and
Montgomery, 1995; Watson, 1994). Many articles
have sought to operationalize the concept (Gallon
et al., 1995; Henderson and Cockburn, 1994). For
the purposes of this paper, however, the most
important aspect of the core competence idea is
its popular encapsulation of an emerging and
increasingly influential approach to strategic
management; the resource-based theory of the
firm. This paper argues that core competencies
and other variants of this approach bring the con-
cerns of strategic management much closer to
the traditional preserve of organization theorists.
Questions of organizational culture, structure and
knowledge which have long preoccupied organ-
ization theorists resurface, sometimes in a differ-
ent vocabulary but with substantially similar
implications, in the debates on core competen-
cies. This convergence of interest suggests fresh
British Journal of Management, Vol. 9, 219–232 (1998)
Path(ological) Dependency?
Core Competencies from an
Organizational Perspective
Harry Scarbrough
Warwick Business School, University of Warwick, Coventry CV4 7AL, UK
The development of the ‘resource-based theory of the firm’ has helped to reorient the
field of strategic management towards a focus on the organizational processes and
structures which produce ‘core competencies’. By challenging previous assumptions of
market determinism this approach seems to open up the prospect of a greater dialogue
with the theories and concerns of organization studies. This paper aims to determine
the scope of such a dialogue by developing an appreciation and critique of the core com-
petencies framework from an organizational perspective. In this context, the key fea-
ture of resource-based theories is seen to be their focus on organizational knowledge
rather than decision-making processes as the engine of competitive performance. This
focus has a powerful resonance with studies of knowledge in organizations, particularly
those forms of knowledge which are linked to product and process design.
However, despite the important shift towards a knowledge-based view of competition,
the core competencies approach fails to follow the logic of its own argument as far
as the organizational appropriation of knowledge is concerned. In their pursuit of an
ontological model of competitive performance – defining the essential causes of firm
competitiveness – resource-based approaches neglect the socially embedded qualities
of organizational knowledge. As a result, the social construction of knowledge, encom-
passing the dilemmas posed by the employment relationship and the pitfalls of institu-
tionalization, is neglected. Instead, a smoothly linear model is developed linking skills,
competence and competitiveness. This mechanistic view is further reinforced by reli-
ance on a command and control model of the management process. Organizational
knowledge is not a biddable resource at the disposal of top management.
Keywords: organizational knowledge, core competence, resource-based theory
© 1998 British Academy of Management
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