Resource dependence and core competence: insights from Indian software firms

Abstract Core competency and competencies in general have been defined on the resources generated or recombined inside a firm. The strategic differences that a firm can maintain with others too have been defined upon the extent and levels of resources usage. These ideas have been examined here through a study of seven software firms from India. The resources dependence of core competence has been refuted analytically. Competencies have been defined through a hierarchy of resource usage. Additionally, resource-dependent competencies have been measured through a novel method. The measured competencies suggest that a core competency cannot be defined in terms of resource use although it can be defined in terms of the capability of a firm to effect switching across competencies. Moreover, a strategic difference can indeed be maintained by a firm through its decision capability reflected in core competency and the same cannot be asserted through levels and extents of resource use. Future research may explore whether results from this study can be extended to larger firms from other sectors.

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