Effect of Core Competence on Competitive Advantage and Organizational Performance

Sabah Agha, Laith Alrubaiee, Manar Jamhour

Abstract


In highly competitiveness market core competence has emerged as a central concept for competitive strategy.
Core competence is the knowledge set that distinguishes a firm and provides a competitive advantage over others.
The main purpose of this study is to investigate the relationship between core competence, competitive
advantage and organizational performance. Core competence was measured through three dimensions: shared
vision, cooperation and empowerment. Competitive advantage was also measured through flexibility and
responsiveness. The proposed model was tested in the context of Paint Industry in the UAE. The survey was
administered electronically to a total of 77 managers. Results indicate that it appears to be consistent and reliable
scales. Finding indicates that, while core competence has a strong and positive impact on competitive advantage
and organizational performance, competitive advantage has also significant impact on organizational
performance. Results confirm the varying importance of core competence dimensions on competitive advantage
and organizational performance. It has also been found that flexibility have higher impact on organizational
performance than responsiveness. To remain competitive and obtain competitive advantages, managers can try to
increase organizational performance by managing each dimension of core competence i.e. shared vision;
cooperation and empowerment.


Full Text: PDF DOI: 10.5539/ijbm.v7n1p192

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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