Core Competency Students: 1. 武 功 英 (Vo Cong Anh) 2. 簡孝丞 3. 吳喬松

OUTLINE 1.Why are core competencies important? 2.Defining a core competency 3.Fundamental organizational competencies

Why are core competencies important? The concept of core competencies was developed by Gary Hamel and C. K. Prahalad and published in their book, Competing for the Future, which became a best seller in They suggested that business leaders view their organizations as a portfolio of competencies as well as a portfolio of products and services. Core competencies are what make your organization unique. They are the skills your organization possesses that set it apart from its peers. They are the sources of competitive advantage. They are the building blocks to future opportunities.

Why are core competencies important? As funding for nonprofit organizations becomes more difficult, many of them are looking to supplement contributions with earned income ventures. Understanding and exploiting the organization’s core competencies are critical if these ventures are to be successful. Because a core competency is the sum of learning across individual skill sets and organizational units it is unlikely to reside in a single individual or small team. Understanding and developing core competencies is necessary to enable the organization to exploit the opportunities they provide.

Defining a core competency A core competence is a bundle of skills that enables an organization to provide a particular benefit to customers or the organization. A core competence is not product or service specific. Core competencies contribute to the development of a range of products and services which is why understanding and exploiting them is important for successful growth. Examples:  Sony- customer benefit is pocket ability and core competence is miniaturization.  Honda - has a core competence in small engine design and manufacturing.  Federal Express- benefit is on time parcel delivery and core competence is logistics management.  Rosecrans- benefit is freedom from addictive behavior and core competence is adult and adolescent education.  Carpenters Place- benefit is a changed lifestyle and the core competency is customized client case management.

Fundamental organizational competencies a. Marketing: All organizations produce a product or service for a client and marketing is the function that creates the paying client. Without some competency in this function the organization would not have any clients. The marketing function includes the following skills: Identifying the product characteristics and service attributes to provide the desired client benefit and how to package these into the product or service offering. Determining the price for the products and services offered including discounts, sliding scale fees, etc. and how payment will be accepted. Determining how and where the products and services will be offered and by whom. Promoting the products and services, communicating with the prospective clients, and selling.

Fundamental organizational competencies b. Production or operations: This function includes all the skills required to produce the product or service to the requirements and specifications determined by the organization’s marketing effort and making them available for purchase or delivery. This function is the most likely source of core competency if the organization provides a unique product or service. In service organizations this function consists of the development and delivery of the service to the client. For organizations that produce or sell a product this function may include purchasing and inventory management skills. Depending upon the scope of purchasing required these activities may be separated into separate functions. For distribution, retail, and food service type organizations this function should include procurement and inventory management skills.

Fundamental organizational competencies c. Human resources: The work of the organization is accomplished by people and competency in hiring and training employees is needed by all organizations employing more than one person. This function may be a source of core competency if the organization is consistently able to develop and retain exceptional employees. This function includes the following skills. Interviewing prospective employees and managers. Hiring and indoctrinating employees and managers. Determining the compensation for employees and managers and establishing the process to pay employees and managers. Determining the employee and manager training requirements needed to perform their jobs and providing or making arrangements to provide this training. Reviewing employee and manager performance and discharging ineffective personnel.

Fundamental organizational competencies d. Fund raising: All non profit organizations need to raise funds. This function can be a source of core competency if the organization is consistently able to obtain sufficient contributions to fund its activities. This function includes skills in developing the Case for Giving, cultivating prospective donors and contributors, making “the ask”, planning and implementing fund raising events, donor recognition, etc. e. Administrative: This is a catch all function that includes customer service, invoicing and bill paying, answering the phones, facility maintenance and repair, etc. Since these functions tend to be relatively routine they are not likely to be a source of core competence unless their facilities and customer service make a significant contribution to customer perceived benefits. Examples are hospitals, schools, and marketing organizations. In these cases these activities may be expanded into separate functions.

Fundamental organizational competencies f. Accounting and Bookkeeping: All organizations must record and monitor the organization’s income and expenses and most must prepare financial reports periodically. As a minimum all organizations must be able to record and categorize these transactions consistently. It is common for nonprofit organizations to contract these tasks to specialists and these competencies are not likely to be a source of core competency. g. Payroll: Businesses need people to do the work and these people must be paid. All businesses must record the hours that workers provide to the business, the wages they are entitled to receive for their work and the salaries due to the salaried workers. This function includes paying these wages and salaries and the payroll taxes that are required by law. Usually nonprofit organizations contract this function to specialists and it is not likely to be a source of core competency.

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