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Hierarchy of strategy - the state of play. Abby Ghobadian, Nicholas O'Regan, Howard Thomas and David Gallear
Introduction
The concept of core competence, as fundamental to organizational renewal and as a driving force behind strategic change, interests both managers and scholars. It is a complex and challenging concept: it is difficult to specify theoretically, to identify empirically as a phenomenon, and to apply in practice. Scholars have recently recognized these problems in general conceptual discussions ([11] Hafsi and Thomas, 2005) and in core competence-specific empirical research ([29] Wang et al. , 2004).
Identification is arguably the starting point of all core competence research ([4] Clark, 2000) and is the matter on which most previous research has focused (e.g. [7] Eden and Ackermann, 2000; [15] Javidan, 1998). The process of identifying core competencies usually entails having employees identify core competencies by scanning and assessing company-critical resources, capabilities, and competencies ([21] Prahalad and Hamel, 1990) - three factors commonly referred to as "associated concepts". In the identification process these concepts often become conceptually and empirically merged, something that occurs in strategic management research too, when these associated concepts are defined interchangeably. For example, capabilities and competencies are defined interchangeably by [27] Spanos and Prastacos (2004), resources and capabilities by [20] Peteraf and Bergen (2003) and [22] Ray et al. (2004), and skill, competence, and capability by [12] Hamel and Prahalad (1994). Other scholars, however, have more usefully distinguished these associated concepts ([3] Branzei and Thornhill, 2006; [17] Makadok, 2001; [14] Helfat and Peteraf, 2003; [1] Amit and Shoemaker, 1993; [25] Savory, 2006; [16] Ljungquist, 2008). Although merging the associated concepts is occasionally justifiable, it normally makes sense to distinguish them by their characteristics. In fact, each concept is acknowledged to be substantial enough to have its own major research stream in the strategic management field, namely, the resource-based, competence-based, and dynamic capability-based streams ([2] Barney, 1991; [23] Sanchez, 2004; [28] Teece et al. , 1997). Although neglecting the associated concepts' distinguishing characteristics may occasionally be useful in complex identification processes, for more advanced core competence matters doing so is unsatisfactory. The very diversity of the concepts enhances our understanding of core competence, and is relevant to research issues such as core competence management, a matter going...