Management Buzzwords Explained: Core and Distinctive Competencies

Management Buzzwords Explained: Core and Distinctive Competencies

This is the sixteenth in a series of essays that addresses management topics. The first ten explored "hot button" issues; the next ten satirize management "buzzwords." I base these essays on countless provocative lectures and irreverent discussions as a nutty professor of Business Administration.

What is the source of competitive advantage? What can actual managers actually manage to create and sustain it? These are questions I left open in a previous essay that addressed Competitive Advantage as a management buzzword that really bothers me.

Answering these questions leads to a slew of other buzzwords: tangible resources, intangible resources, core competencies, distinctive competencies, organizational capabilities, and to sum it up, a theory called the Resource-Based View of the Firm. As buzzwords go, they are not that irksome because they are reasonably self-explanatory. What is not self-explanatory is how they fit together into an overall theory of competitive advantage and strategic management.

When business scholars learned that some firms consistently earned higher than average profits, relative to what economics might infer was "normal" for the respective industries, it was assumed that this was not due to luck. Something real and systematic was going on. Whatever the reason might be, was called sustainable competitive advantage. Researchers set about to find its source and understand it for management purposes.