Understanding Team – What is a Team?
Let us first go through a simple real life situation. John was working as a key accounts head with a leading advertising firm. He had four members reporting to him. Unfortunately he always under estimated his team members and fought with them constantly. He could never trust them and always thought they were incapable of […]
Factors affecting Interpersonal Relationship
Interpersonal relationship refers to individuals with similar tastes and mindsets entering into an association. Individuals who share identical goals and interests enter into an interpersonal relationship. It is essential for individuals in a relationship to get along well. Let us go through various factors affecting interpersonal relationship: Compatibility Two individuals in a relationship must be […]
Strategy Formulation vs Strategy Implementation
Following are the main differences between Strategy Formulation and Strategy Implementation- Strategy Formulation Strategy Implementation Strategy Formulation includes planning and decision-making involved in developing organization’s strategic goals and plans. Strategy Implementation involves all those means related to executing the strategic plans. In short, Strategy Formulation is placing the Forces before the action. In short, Strategy […]
History of Database Applications
One of the most important purposes of development of computer systems was the database application which could have been used on them. Data processing drove growth of computer processor speed. In fact, data processing predates the computers; punched cards were used in the US for collecting data for census during beginning of 20th century. Earliest […]
Anatomy of a Sports League Franchise Agreement
We have already discussed that sports leagues across the world follow the franchise model. Franchising is at the core of billion-dollar sports leagues which take place across the world. It is important to realize that franchising provides the legal and business framework which ensures coordination between the actions of different league participants. It is important […]
Core competency is a unique skill or technology that creates distinct customer value. For instance, core competency of Federal express (Fed Ex) is logistics management. The organizational unique capabilities are mainly personified in the collective knowledge of people as well as the organizational system that influences the way the employees interact.
As an organization grows, develops and adjusts to the new environment, so do its core competencies also adjust and change. Thus, core competencies are flexible and developing with time. They do not remain rigid and fixed. The organization can make maximum utilization of the given resources and relate them to new opportunities thrown by the environment.
Resources and capabilities are the building blocks upon which an organization create and execute value-adding strategy so that an organization can earn reasonable returns and achieve strategic competitiveness.
Resources are inputs to a firm in the production process. These can be human, financial, technological, physical or organizational. The more unique, valuable and firm specialized the resources are, the more possibly the firm will have core competency.
Resources should be used to build on the strengths and remove the firm’s weaknesses. Capabilities refer to organizational skills at integrating it’s team of resources so that they can be used more efficiently and effectively.
Organizational capabilities are generally a result of organizational system, processes and control mechanisms. These are intangible in nature. It might be that a firm has unique and valuable resources, but if it lacks the capability to utilize those resources productively and effectively, then the firm cannot create core competency.
The organizational strategies may develop new resources and capabilities or it might make the existing resources and capabilities stronger, hence building the core competencies of the organization.
Core competencies help an organization to distinguish its products from it’s rivals as well as to reduce its costs than its competitors and thereby attain a competitive advantage. It helps in creating customer value. Also, core competencies help in creating and developing new goods and services.
Core competencies decide the future of the organization. These decide the features and structure of global competitive organization. Core competencies give way to innovations. Using core competencies, new technologies can be developed. They ensure delivery of quality products and services to the clients.
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