A CRITICAL EXAMINATION OF THE CORE COMPETENCY APPROACH

Abstract

This article critically evaluates the core competency approach which occupies a central position in the field of strategic management. Introduced by Prahalad and Hamel (1990), this approach argues that firms can achieve sustainable competitive advantage by focusing on organizational competencies that create value for customers and cannot be imitated by competitors. The study first explains the definition and evolution of the core competency concept and its relationship with the resource-based view and then provides a comprehensive assessment of the literature through four main lines of criticism: paradigm validity, content and face validity, measurement and evaluation problems, and predictive validity. These criticisms are substantiated not only through findings from prior research but also through up-to-date company examples from different industries. The findings indicate that core competencies may be insufficient as a standalone strategic prescription and may have limited capacity to address the need for adaptation under dynamic environmental conditions. Accordingly, the study suggests that the core competency concept should be examined in a more holistic manner by integrating perspectives from dynamic capabilities, digital ecosystem strategies, and organizational learning. The article aims to make a conceptual contribution to the literature and to provide firms’ strategic planning processes with more flexible and sustainable perspectives.