Core Competence of Corporation

¶ … Competency Creating Core Competencies in a Corporate Context Yielding the best possible results from a large corporate entity requires a clear strategic orientation or a set of concurrent strategies through which employee actions might be governed. Often, however, the highly segmented nature of those corporations engaged in multiple sectors and industries can cause such strategic orientation to become garbled, distorted or obscured. It is thus that the article provided by Prahalad & Hamel (1990) offers a counterpoint to the regimented use of business units as a way of aligning a corporation.

Instead, the article espouses the construction and magnification of core competencies as a way of creating dynamic and movable assets from individual employees. The discussion here evaluates the concept of core competency in the corporate context, advocating this as a way of supplanting bureaucratic structuring in favor a more knowledge-based strategy for personnel orientation.

Body of the assignment The article by Prahalad & Hamel asserts that most modern businesses, as they adjust to the implications and imperatives of the global economy, must do nothing less than reinvent the notion of the corporation itself. According to Prahalad & Hamel, one of the errors that corporations commit today is to establish an over-reliance on established markets. Often, business units will be rigidly developed in order to serve the goals within established markets.

The article raises the example of GTE, a dominant firm of the 1980s which invested its future prospects in telephone operations with a smaller focus on lighting and defense contracting. By connecting its long-term fortunes to an entrenched prioritization of select market engagement, GTE would become a perfect demonstration of the danger which the article discusses. Its fortunes would erode greatly because it had created a personnel orientation which was distinctly inflexible.

As the commercial interest of telephony gave way to greater interests in data-switching and fiber-optics, companies which had not preemptively created the necessary flexibility to adapt would suffer considerably. This is the basic imperative for core competency and the great strength of the present article. It argues that, instead, by training employees in universal core competencies, personnel become eminently more capable of, indeed more directly programmed toward, evolving with the company's needs.

As the article asserts, "a few companies have proven themselves adept at inventing new markets, quickly entering emerging markets, and dramatically shifting patterns of customer choice in established markets. These are the ones to emulate." (p. 3) This denote that where the evolving corporation is concerned, there is a.