Core competence is the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies. It is also a commitment to working across organizational boundaries. As such, organizing around core competencies often requires a radical change in corporate organization.
In this essential HBR article, The Core Competence of the Corporation, authors C.K. Prahalad and Gary Hamel outline the importance of identifying core competencies, redesigning the architecture of the company, providing an impetus for learning from alliances, and a focus for internal development.
Looking to take this concept further? Check out:
HBR Visual: Competencies—The Roots of Competitiveness Transparency can be measured along two dimensions: Supply chain scope and milestones on the path to complete transparency. See where most companies fall on this chart by exploring this and other HBR visuals in our subscriber-only Data & Visuals library.
From the HBR Store: HBR Guides to Building Your Strategic Skills Collection To grow as a leader, you need to understand your company's strategy and align your thinking, projects, and team with organizational goals and vision. Master these abilities with this three-book set. (Use promo code HBRORGREG4 at checkout to get your 20% subscriber discount on HBR Store purchases.)
The HBR Essential Articles Collection Just for subscribers, explore more from this set of essential HBR articles. In this collection, you'll find top business classics alongside more recent articles—all featuring practical advice to help you meet today's business challenges.
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