Knowledge, Skills and Competencies: A Capability Approach and Strategic Implications to Firms

Abstract:     
This paper aims at reconsidering knowledge, skills and competencies from a capability perspective while addressing firms’ strategic response. This is a one of recent attempts in addressing capabilities from a two dimensional form. Identifying nature of capabilities (knowledge, skills and competencies) with respect to this classification align them with firms’ strategic growth objectives. This paper has identified four forms of capabilities based on this classification. These include; Localized capabilities, Blocked (sticky) capabilities, Narrow capabilities, Multiplex Capabilities. Though localized capabilities are hard for competitors to imitate, add less value to firms’ growth options. Multiplex capabilities have a possibility to provide firms with multiple growth options but this come at the expense of more risks from competitor’s attempts to imitate, which lead to their value erosion. Responding to a risky nature of multiplex capabilities, firm need to insulate them through ensuring their value generation is contingent on other assets inside the firm.

Number of Pages in PDF File: 15

Keywords: capabilities, knowledge, skills, competence, transferability, generalizability

JEL Classification: M10, M19, M39

Accepted Paper Series