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IJPSM

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The International Journal of Public
Sector Management,
Vol. 13 No. 4, 2000, pp. 306-318.
# MCB University Press, 0951-3558
Introduction the competency
movement: its origins and
impact on the public sector
Sylvia Horton
University of Portsmouth, Portsmouth, UK
About the Guest Editor Sylvia Horton is Principal Lecturer in Public Sector Studies at the
University of Portsmouth. She has researched and published widely on public administration and
public management but has a special interest in human resources management in the public
services. Her most recent publications include Managing the New Public Services, Managing
People in the Public Services and Public Management in Britain (jointly edited and written with
David Farnham). She is joint covenor of the Personnel Policies Study Group of the European
Group of Public Administration and has jointly edited two compendiums of international studies
on New Public Managers in Europe (with David Farnham, John Barlow and Annie Hondeghem)
and Human Resource Flexibilities in the Public Services; International Perspectives (with David
Farnham). She is currently monitoring the implementation of the Government's policy on
Modernising the Civil Service.
Keywords Competences, Public sector, Skills, Personnel management
Abstract This introduction seeks to locate the origins of the competency management in
American and British management concerns with declining international competitiveness and the
need for more efficient and effective managers. It examines the distinctive American and British
approaches and identifies and defines the ideas, concepts and techniques associated with
competency in each country. The transfer of these ideas and practices into the public sector
accompanied the spread of new public management, which has increased throughout the 1990s.
The movement is now an international one prompted by both the OECD and the management
consultancy industry. The process of adoption and implementation has tended to be pragmatic
and ad hoc but evidence suggests it is now becoming an important vehicle for organisational
cultural change. This introduction provides the backdrop for the remaining five articles in this
special issue of the journal, which illustrate both developments in theory and practice of
competency-based management within public services.
The competency movement
The Third International Competency Conference held in London in 1998
demonstrated how pervasive the idea of competency has become throughout the
world. There were some 600 delegates fromEurope, the USA, the Middle East and
Australasia including human resource specialists, line managers, chief executives,
consultants and academics. Although most of the delegates came fromthe private
sector the public sector was well represented indicating, once again, the common
managerial concerns and responses which cut across the market divide and the
centrality of commercial business ideas in newpublic management.
Like most movements the competency movement has no single origin. The
concept of competence has been around for centuries and can be traced back to
the mediaeval guilds in which apprentices learned skills by working with a
master and were awarded credentials when they reached the standards of
The current issue and full text archive of this journal is available at
http://www.emerald-library.com
Introduction
307
workmanship associated with and set by the trade. The industrial revolution
gave rise to the study of work and jobs and the skills needed to do those jobs.
With the advent of scientific management and, in the 1930s, the human relations
school of management thought, academic and practitioner interest became
focused on both how to organise work and how to motivate workers. In the
1930s functional analysis of jobs was promoted by the Roosevelt administration
in the USA and resulted in the publication of a dictionary of occupational titles
which identified knowledge and skills linked to different occupations
(McGlagan, 1997). Post-war, work continued on developing functional job
analysis (Fine, 1988) although it was put on the back burner in the USA as
attention turned in the 1970s to the need to improve economic competitiveness.
The American movement
The national skills initiatives
There were two strands to the US governments' policy on increasing economic
competitiveness. The first focused on education and general skills. There was a
move to improve the standards of education as poor quality of education within
schools and colleges was seen as failing both business and individuals. Federal
money funded a number of demonstration projects linked to the identification
of specific behaviours, competencies and learning outcomes that matched the
needs of society and the economy. At the same time a number of states began to
introduce ``standard attainment tests'' (SATs) and also assessed teachers on
their classroom performances. Eventually minimum standards of performance
were set down and minimum levels of competence were established for teacher
accreditation throughout the country.
The US administration then turned its attention to setting down national
standards across all occupations. Influenced by developments in the UK (see
below) the Clinton Administration appointed the National Skills Standards
Board (NSSB) in 1994, to encourage the development of a voluntary national
system of skill standards that could be assessed and certified. These standards
were intended to be used:
. . . by the nation to ensure the development of a high skill, high quality, high performance
workforce, including the most skilled frontline workforce in the world (NSSB, 1998, sec. 502).
In both the USA and the UK the aim was to establish lead bodies or national
training organisations which would be responsible for developing skill standards.
The latter relate to the level of knowledge and competence required to perform
successfully work-related functions within an occupational cluster. People who
demonstrate that they have the core levels of knowledge and skills will be
awarded an appropriate qualification. The British system has been operating
since 1983 but the newUS skill standards will not be operational until 2013.
Management competency
The second strand in the US response to declining competitiveness was the
investigation of competence in the employment context. Here the emphasis was
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on seeking to understand the basis of excellence. The American Management
Association commissioned McBer Associates (a private consultancy firm) to
undertake research into successful managers and to identify their attributes
and features. The consultant, Richard Boyatzis, concluded from his research
there was no single factor but a range of factors that differentiated successful
from less successful managers. These included personal characteristics,
experience, motives and other attributes. Boyatzis adopted the term
``competency'', plural ``competencies'', which he described as:
. . . an underlying characteristic of an individual that is causally related to effective or
superior performance in a job (Boyatzis, 1982).
Boyatzis' research into competencies, which differentiated effective and
successful managers from those with inferior performance, proved a most
seminal work. He went on to develop a generic model of management
competencies drawing upon the hundreds of projects undertaken by McBer
Associates. He concluded there were 19 generic competencies that outstanding
managers tend to have, though not all jobs require all 19 and some require
additional competencies. The McBer Company has since produced a dictionary
of nearly 400 behavioural indicators defining 216 competencies that have been
found to be common to nearly 300 competency models.
Organisational competencies
During the 1970s and early 1980s US academics turned their attention to
strategic management as the key to competitive success. Systems thinking led
to the concept of the corporate environment and the external factors affecting
organisational strategy and success. The work of Porter (1980; 1985) focused on
portfolio management, the need to know and understand the market
opportunities present in the fast changing environment and how to select from
options to diversify, decentralise, integrate or merge. Ideas on strategic
management revolved particularly around SWOT (strengths, weaknesses,
opportunities and threats) analysis (Andrews, 1980). Thinking on internal
competencies was not entirely forgotten however as Hayes (1985) questioned
whether focusing on ends before considering means was the best approach to
business strategy and Itami and Roelhl (1987) and Peters (1987) pointed to the
need to identify and mobilise invisible assets, including human capital, and to
build on strengths and ``stay with the knitting''. This thinking gathered
momentum with the emergence of the resource-based school of economics
during the 1980s.
The resource-based school focuses on firms' internal characteristics to
explain why they pursue different strategies with different outcomes. The
central proposition is that organisations are accretions of specialised resources
that can be used to gain a privileged market position in other words a
sustainable competitive advantage. Barney (1997), a major exponent of this
school, distinguishes between tangible, intangible, human and non-human
resources but identifies an organisation's key resources as knowledge,
Introduction
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information, capabilities, characteristics and organisational procedures. He
argues, however, that a firm's resources are competitively important only to the
extent they are valuable, rare and difficult to imitate. Their value does depend
on the opportunities available for exploiting them but it also depends on
management's ability to identify, exploit and develop them, in particular the
distinctive competence of the organisation.
The ``distinctive competence'' idea was developed and promoted in the 1990s,
by Prahalad and Hamel (1990; 1993; 1995) among others. In an important article
in the Harvard Business Review (1990) Prahalad and Hamel proposed a
different approach to the strategic planning process which started with an
internal analysis or inventory followed by an examination of the external
environment a reversal of the outside/in approach. They suggest that
organisations need to understand fully their ``core competencies'' and
``capabilities'' in order to exploit successfully their resources. All organisations
have different types of resources that enable them to develop different
strategies but they have a distinctive advantage if they can develop strategies
that their competitors are unable to imitate. The competency movement in the
US was greatly advanced by the work of Prahalad and Hamel as, after decades
of seeing corporate strategy as a portfolio problem, academics and practitioners
were open to the idea that technology, skill and synergy should be seen ahead
of cash flow and control. Their concept of ``core competency'' drew attention to
the ideas that competencies span business and products within a corporation,
they are more stable and evolve more slowly than products and they are gained
and enhanced by work.
Core competencies are the collective learning in the organisation especially how to co-ordinate
diverse production skills and integrate multiple streams of technologies . . . core competency
does not diminish with use, competencies are enhanced as they are applied and shared
(Prahalad and Hamel, 1990, p. 82).
The real competition, in the business world, is the competition over
competencies. Hamel (1991, p. 83) says:
. . . conceiving of the firm as a portfolio of core competencies and disciplines suggests that
inter-firm competition, as opposed to inter-product competition, is essentially concerned with
the acquisition of skills.
Prahalad and Hamel also demonstrated how the concept of core competency
could act as a vehicle for separate business units within an organisation to find
common interests, share common problems and exploit their respective
capabilities. The outcome is that many organisations no longer define
themselves as a collection of business units but as a portfolio of competencies.
The latest thinking on competencies in the USA is that a firm's ability to
learn and acquire new capabilities and competencies may be a more important
determinant of its competitive position than its current endowment of unique
resources or the industry structure it currently faces. Sustainable competitive
advantage in the long run is seen to arise from the superior ability to identify,
build and leverage new competencies (Sanchez and Heene, 1996a; 1996b). The
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concept of the learning organisation, now in vogue, builds on the ideas central
to the competency movement outlined above. These ideas have found their way
into the public sector through the work of Osborne and Gaebler (1992) and the
Gore Report (1993).
The British movement
The competency movement in the UK emerged out of the same environmental
context as the US, i.e. changing technology, increasing competition, declining
profitability and the search for competitive advantage and improved
performance. It was also a response, especially in the 1990s, to widespread
organisational developments including changes in working practices, such as a
greater focus on team-working and customer service; flatter organisational
structures, which meant less opportunity for traditional staff development
through promotion; cultural changes leading to a greater emphasis on
employees taking responsibility for continuous learning and self-development;
and the need for increased flexibility in work, requiring employees to develop a
wider range of skills over time. Many of the ideas, concepts and theories
developed in the USA have been exported to the UK through management
consultancy firms, educational institutions and US companies located in the
UK. But there has also been a reverse movement and transfer of policies. There
is, however, a distinction between the US and UK approaches, which is partly
reflected in different terminology and spelling.
Skills gap
Political concerns about the UK's poor economic performance, rising
unemployment and a growing skills gap led to a series of government
investigations and reports in the 1980s. The first message to emerge was the
need for a flexible and adaptable workforce that could respond to economic
change and the need for a comprehensive training programme based on new
standards of occupational competence (MSC, 1981). Because of the poor
training record of the UK the government instructed the Manpower Services
Commission to put in place a system for setting standards across all sectors of
industry. Industry Lead Bodies were created to develop new standards and the
National Council for Vocational Qualifications (NCVQ) was appointed to co-
ordinate their work into a national framework. It created a framework
consisting of five levels ranging from basic operational skills to strategic
management skills. NVQs are now conferred on individuals who reach the
required standard at each level and are seen as alternatives to the traditional
educational qualifications conferred by academic examination bodies.
Complementing this initiative the government, following the US example,
reformed teacher training and introduced SATs, along with a national
curriculumand output assessment, throughout the school system.
This process necessitated the precise definition of the skills to be developed
within the schools system and the skills required to do particular jobs within
the economy. The task of the Lead Bodies and NCVQ was to assign jobs to the
Introduction
311
appropriate NVQ level and to evolve rigorous tests to assess whether people
met the standards. In 1997 a new body, The Quality and Curriculum Authority,
assumed responsibility for NVQs and currently audits the 130 awarding bodies
and more than 900 NVQ titles that have been developed. The NVQ system
clearly aims, through the national framework, to provide for the portability of
qualifications and the mobility of labour. It is not confined to manual and
technical occupations but is fully comprehensive covering all manual, clerical,
technical, administrative, professional and managerial positions. As in the
USA, there was a concern about the standard of management in the UK.
Reports (Handy, 1987; Constable and McCormick, 1987) indicated the low
standing of British management compared to its major competitors. The
government and industry resolved to improve the professional standing of
management and to endow it with a scientific base. The development of the
chartered or professional manager began with the Management Charter
Initiative (MCI) in 1987. This was intended to encourage training and
accreditation of recognised management skills that were subsequently
developed within a NVQ framework. It was assumed that the acquisition and
development of the accredited management skills would lead to ``good
management''.
In the 1990s governments reformed further and higher education (Holloway
et al., 1999) and introduced policies aimed again at establishing and raising
standards and quality and ensuring that universities and colleges were
developing, amongst their students, the skills that industry and the economy
required. A Quality Assurance Agency, created in 1992, conducts regular
inspections of both programmes of study and institutions to monitor their
standards. The orientation is very much focused on outputs including degree
results and qualifications and employment of students.
Similarities and differences within a common movement
There is a terminological confusion which plagues the competency movement
and its origin lies in the different perceptions underlying the US and British
approaches to competency. In the UK the term ``competence'' and the plural
``competences'' were adopted to indicate the range of standards linked to
occupational performance. The Training Standards Agency defined competence
as:
. . . an action, behaviour or outcome which the person should be able to demonstrate.
This represented both a normative threshold and a standard of performance,
which could be demonstrated, and in some instances measured rather than
inferred. In other words:
The ability to perform the activities within an occupation or function to the standard expected
in employment (MCI, 1990, p. 1).
There were serious criticisms of this ``output oriented'' approach and of the
British NVQ system in general (Wilson, 1998), as it seemed to ignore
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knowledge and theory in favour of demonstrated skills. Furthermore, at the
outset, the British standards were deliberately distanced from training and
education institutions. Government wanted industry to take responsibility for
both setting the standards and for assessing attainment. That gave rise to the
accusation that the standards were narrowly focused on short-term employer
needs and a limited concept of competence based on immediate job
requirements. Those criticisms are now being responded to and the concept has
recently been widened and revised:
Occupational competence is defined as the ability to apply knowledge, understanding,
practical and thinking skills to achieve effective performance to the standards required in
employment. This includes solving problems and being sufficiently flexible to meet changing
demands (NCVQ, 1997).
Neither of these definitions, however, encompasses the softer behavioural skills
identified by US writers nor the US differentiation between superior and less
effective performance, clearly expressed in Boyatzis' (1982) definition of
competence(ies) as:
. . . the behavioural characteristics of an individual which is causally related to effective or
superior performance in a job.
The US focus is clearly on the ``inputs'', the abilities, aptitudes and talents that a
person brings to a job, which enables them to perform satisfactorily or
exceptionally. Here the emphasis is much more on potential rather than
demonstrated proficiency.
Another fundamental difference between US and UK approaches in the
1980s and early 1990s was the US search for ``excellence'' and the exceptional
compared to the British systematic identification of the skills needed to perform
a role, which can be observed and assessed and therefore trained and
developed. This has been described as ``the difference between drivers of
performance and standards of work'' (Roberts, 1997, p. 70).
Although this distinction is clear-cut, approaches in both countries, during
the 1990s, have tended to converge. As stated above, the American government
has created its own NSSB, modelled on the British NCVQ and is moving
towards a more ``output'' oriented approach to skills development. On the other
hand, many UK organisations are now focusing on ways of identifying the
``exceptional'' partly because the companies that are ahead of the game in
developing a competency approach are subsidiaries of US corporations or have
used US companies as benchmarks. Partly it is due to the influence of
management consultants and the dissemination of US ideas through
management education programmes. But not least it is the result of criticisms
of the UK's ``flawed model'' and the need to combine both norm and criterion
referenced approaches (Adams, 1998; Wilson, 1998).
The internationalisation of the competency movement
Competency approaches are now an established feature of many private and
public organisations in the UK, USA and internationally and are continually
Introduction
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increasing (Strebler and Bevan, 1996; Matthewman, 1995; Industrial Society,
1996; Valkeavaara, 1998; Pickett, 1998). The movement has been driven to a
large extent by the new business and human resources agenda that needs to
deliver business performance in an increasingly competitive or resource limited
environment. The improvement in the performance of individual managers and
all employees is seen as a key factor in achieving this. Employers cite the need
to develop the future skills required by the ``business'' as the reason for
introducing competencies (Strebler and Bevan, 1996) and they believe that
competencies will provide a common language and facilitate cultural change
(Strebler et al., 1997). In the public services individual and organisational
competencies are seen as a means not only of achieving more efficient
performance but also of facilitating cultural change and the means to a
modernised, effective and responsive government (Cabinet Office, 1999).
Human resources are now seen as the key to organisational success and the
development and effective management of those resources is increasingly
preoccupying organisations and consequentially the management education
industry. The competency movement has taken centre stage and is looked to
for guidance on how to proceed. In the UK the Institute of Personnel and
Development (IPD) and the British Institute of Management (BIM) have fully
embraced the competency approach and as lead bodies have set down
standards and a competency framework which is used for professional
development and award of professional status to both personnel specialists and
general managers. As lead bodies they also disseminate good practice and the
latest ideas on personnel and management issues. Both have been particularly
active in promoting performance management and see competencies as the core
of performance. Comparable bodies such as the American Management
Association, American Institute of Public Personnel Management, US based
International Personnel Management Association and the Australian Human
Resources Institute have also been promoting competency management both in
their own countries but also internationally. Private consultancy firms, which
have multiplied into a major international industry in the last decade, are being
invited to advise on how to develop competency frameworks and to educate
and train staff on competency. International Conferences on Competencies and
specialised journals such as Competency, first published in 1993, by Industrial
Relations Services in the UK, are devoted entirely to the theory and practice of
competencies and are attracting increasingly large audiences.
Governments, following the US and British examples, have been actively
promoting skills and competency developments through public education
policies and their partnerships with industry. The introduction of ``new public
management'' with its business orientation opened the way for all private
management developments to be seen as potential imports to public
organisations. Performance management now firmly established in both the US
and UK systems of public administration, was the natural precursor to
competency-based human resource systems. Although the competency
movement originated in the US and the UK, it is now an international
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phenomenon and is practised increasingly throughout the OECD countries and
beyond. The member states of the European Union are currently all showing an
interest in it although some are ahead of others in implementing competency-
based practices. In general, the northern European States have been quicker to
adopt new public management and HRM innovations but with the OECD
promoting the sharing of best practice and benchmarking, competency
management is spreading quickly.
Competences in the public services
The five articles in this special issue of the Journal contribute to the ongoing
debate about competencies in the public services and throw light on
developments in selected European countries. The first two articles by
Noordegraaf and Virtanen, respectively, address the question what
competencies do public managers need to be able to operate efficiently and
effectively within their public/political contexts? Noordegraaf supports the
argument that while managerial functions may be generic across private and
public sectors, the contexts in which managers operate are unique. He derives
public managerial competencies from his observations of what managers
actually do. A close ethnographic study of 12 public managers in a variety of
public organisations reveals how they manage the multiple forms of ambiguity
found in public organisations and make sense of them. Noordegraaf concludes
that competent public managers are ``professional sense-makers'' who know
how to perceive political cues, stimuli and triggers and to relate them to new or
existing issues (interpretive competencies), how to initiate and manage issues
(institutional competencies) and how to bring issues and policies ahead (textual
competencies). Essentially, competent public managers can manage and adapt
administrative structures within rules and frameworks that are inherently
ambiguous and within political situations that are inherently unstable and fluid
coalitions.
Virtanen's article offers a different theoretical approach to the question of
what competencies public managers require to be effective in the new systems
of public management. He argues that the literature on managerial competence
has not addressed the value contents of competencies and that it is the value
competencies or ``commitments'' of public managers, which are the key to their
effectiveness. He demonstrates how the challenges of new public management
have changed the expected value qualifications of public managers and caused
tensions in their commitments. Virtanen constructs his own framework of four
competence areas for public managers. These include task, professional (itself
subdivided into substantive and administrative professionalism), political and
ethical competencies. Each of the competencies, derived from the inductive
methodologies of other writers, can, Virtanen argues, belong to all of his
competency areas but there is a tendency for them to be mainly instrumental
and technical rather than value competencies. The latter are commitments that
have stabilised as relatively permanent attributes of individual action.
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After comparing the morality implicit in NPM with that under-pinning the
public services of welfare states, Virtanen concludes that NPM has challenged
the traditional value competencies of public managers and created tensions in
their commitments to the public service. The new commitment and value
competencies are based on utilities and strategic objectives, which are in
contrast to the traditional public service ethics and specificity of the public
service. He suggests that a lack of commitment to the new ``business ethic'' may
explain the often modest, practical achievement of NPMover the last 20 years.
The remaining three articles illustrate the practice of competency
management across three countries. Hondeghem and Vandermeulen throw
light on the continental European perceptions of competencies and competency
management and illustrate competency-based approaches in the Flanders'
government in Belgium and the Dutch civil service. They assert that
competency management has become a new trend in the public sector but
question whether it is really new or just old wine in new bottles. After
exploring some of the theoretical aspects of competency, drawing on a wide
range of European literature, they examine the reasons for implementing
competency management and its novelty. They highlight the differences
between the traditional, functional approach to HRM and the competency
approach and argue the latter supports a strategic and integrated approach to
HRM. This, however, requires that personnel or HR professionals have the
competencies to perform their new roles as business partners, HR experts, and
advocates, change agents and leaders. The inference is that they do not and
these competencies need to be developed.
Two examples of competency management in practice then follow. The first
is a study of the appraisal system (PLOEG), conceived as an integrated HRM
instrument supporting the process of performance and competency
management in the Flemish administration in Belgium. The authors explain
the process of preparing for the new appraisal system, which has been in
operation for five years. The recent evaluation of the system is discussed.
While on balance PLOEG has achieved many of its objectives, the new
government, elected in 1999, is committed to broadening the competency
framework, particularly for senior civil servants, and developing their
competencies by an oriented training policy.
The second case study is of the Senior Civil Service (Algemene
Bestuursdienst) in the Dutch Administration. This operates within a
competency framework based upon seven clusters of behavioural requirements
and 28 competencies and the framework is used comprehensively for all
personnel functions. Although there are some criticisms of the system, in
particular its narrow focus on technical competencies, the authors commend it.
They imply that it provides a model of good practice as it pays more attention
to the specific competencies required of public managers than the British
system on which it was based.
The authors conclude that although competency management is increasing
in importance, it is not as novel as is sometimes claimed. They argue there is
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still much to be done in developing competency frameworks which fit the
government context but it is likely to become more widespread because it
provides leverage for the implementation of a strategic HRMmodel.
Horton's article illustrates the growing use of competency management
systems throughout the British civil service. Her findings, based on a survey of
130 government departments and agencies, suggest that competency
approaches to managing human resources are now almost universal
throughout the service although the range of personnel functions covered
varies. All organisations have experienced problems introducing and operating
competency-based systems but the advantages appear to outweigh those
problems. She concludes that policy on competency management is highly
decentralised in the British civil service and is also pragmatic and ad hoc. A
more strategic direction, however, appears to be emerging under the present
Labour Government although holistic approaches to competency management
are still rare.
The last article, by Farnham and Stevens, is a case study of the introduction
of a competency-based approach to recruitment and selection in one
department of a large local authority. After describing and reviewing
traditional practices the authors trace the impetus to change in a variety of
external and internal factors but specifically to a critical report by the Audit
Commission and Social Services Inspectorate. This led to the policy decision to
introduce a new system. The authors provide an insight into the change
management process and the way in which the competency framework was
developed. They highlight the importance of training and relationship building
between line managers, who are the key actors in the new system, and
personnel specialists who have a support role. The authors conclude that
competency-based recruitment and selection fits well into the department's
overall human resources strategy for improving workplace performance and
reducing workplace conflict as well as furthering the organisation's equal
opportunities and diversity goals and objectives.
The conclusions that can be drawn from the articles in this issue are that
competency-based management is growing in importance as an approach to
managing people within public organisations but that there is still no
agreement on what specific competencies are required of public managers
beyond those required of all managers who are faced with achieving an
organisation's goals and objectives with the most efficient and effective use of
available resources.
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Further reading
Hamel, G. (1994), ``The concept of core competence'', in Hamel, G and Heene, A. (Eds),
Competence-based Competition, Wiley, New York, NY.

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