After reading, Making summary and giving some opinions - Essay Example

The Core Competence of the Corporation The Core Competence of the Corporation The article written by Prahalad andHamel (1990) entitled “The Core Competence of the Corporation” and published in the Harvard Business Review proffered pertinent issues that focus on identifying how large global organizations are able to sustain leadership and surpass other corporations within their spheres of endeavors. Using the examples of organizations like GTE and NEC, the authors manifested the reasons why NEC was able to surpass the performance of GTE, then the market leader in the information technology industry.

As expounded, the ability of NEC to tap and focus on building core competencies their accurate identification and strategic abilities to effectively link them to core products, NEC assumed remarkable leadership performance within a decade. Prahalad and Hamel (1990) discussed the concepts of core competencies of a diversified corporation with analogies to a large tree where parts of the tree from roots to leaves were compared to core competence to end products. The three tests to identify core competencies, such as providing access to diverse markets; making relevant contributions to end products as perceived by customers; and difficulty of products to be imitated make organizations distinct and exude enhanced abilities for exemplified leadership performance.

Finally, the concept of core competencies was compared to strategic business units (SBUs) where differentiations according to basis for competition, corporate structure, status of business unit, resource allocation, and the value added of top management have been presented. One strongly believes that the authors’ contention regarding the need for organizations to accurately identify and utilize core competencies as the means to succeed is valid and credible. Through using actual organizational experiences of large corporations whose performances have been significantly affected by their abilities to apply concepts and strategies on capitalizing on their core competencies, the authors’ arguments are clearly validated.

The structure and language used in the presentation of information were highly comprehensible and effective in enhancing readers’ understanding of the issues discussed. The use of illustrations in the form of diagrams, visual maps, and comparative tabular forms assisted in highlighting relevant details. One is led to agree that the value of applying core competencies actually stem from one of the most important facets of its identified existence: that of ensuring that competitors would find it extremely difficult to imitate the organization’s products or services.

However, since the article was written in 1990 when the discovery of the Internet was just starting, one is made to reflect of the applicability of the tests for identifying core competencies in contemporary times. When access and availability of information has been revolutionized due to increased applications that have emerged from electronic sources, the difficulty or ease within which products and services are copied or imitated have drastically changed. Likewise, patents and intellectual property issues continue to impinge organizations that develop new products and services, especially within the information technology industry.

In the end, although most of the issues and theoretical framework for core competencies could still be applied in contemporary times, business practitioners must be vigilant in discerning which contentions are still credible and valid given the significant changes that technological advancement has impacted on contemporary organizations and industries that operate on a global scale. Reference Prahalad, C., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review, 1-15.