OUTLINE OF A THEORY OF COMPETENCE DEVELOPMENT

This paper examines competence development as a facet of a firm’s dynamics. Proceeding from a “model of competence building” developed in an earlier study, a theory of competence development is outlined, which recommends that competence development should cyclically alternate between competence upgrading and competence renewal. This cycle is subject to various influences, including the firm-specific resource base, the way in which managers perceive competence to create customer value, the level of undesired knowledge diffusion, and changes in the environmental dynamics specific to the firm. Inevitably, the theory of competence development involves some simplifications; yet it’s relevance is underlined by the fact that it stands up to empirical analysis.