Enhancing Financial and Strategic Performance through Core Competencies and Competitive Advantage: A Thematic Analysis
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Published
Apr 19, 2020
Abstract
This paper aims to explore the realm of core competencies, competitive advantage, financial
performance, and strategic performance of an oil and gas company in Malaysia and to develop a
model depicting the relationship among these constructs. Semi-structured interviews were
conducted with ten experienced executive officers from the company to solicit information about
the organisation’s core competencies, competitive advantages, financial performance, as well as
strategic performance. The study identified that most organisations often mistake core
competencies for capabilities. Furthermore, the study lends support to the theoretical finding that
firms which develop core competencies result in having a competitive advantage and have superior
market performance. The study is a pioneer for a Malaysian oil and gas company; the work
develops a model that can help enhance an oil and Gas Company’s financial and strategic
performance.
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Keywords
Core competenciescompetitive advantagesfinancial performancestrategic performanceoil and gas companyMalaysia
References
Agha, S., Alrubaiee, L., and Jamhour, M. (2012), “Effect of core competence on competitive
advantage and organizational performance”, International Journal of Business and
Management, Vol. 7, No. 1, pp: 192-204.
Ashton, C. (1996), “How competencies boost performance”, Management Development Review,
Vol. 9, No. 3, pp: 14-19.
Bani-Hani, J. S., and Al-Hawary, F. (2009), “The impact of core competences on competitive
advantage: Strategic challenge”, International Bulletin of Business Administration, Vol. 6,
pp: 93-104.
Barney, J. B. (1991), “Firm resources and sustained competitive advantage”, Journal of
Management, Vol. 17, No. 1, pp: 99–120.
Bergenhenegouwen, G., Horn, H. and Mooijman, E. (1996), “Competence development– a
challenge for HRM professionals: Core competences of organisations as guidelines for the
development of employees”, Journal of European Industrial Training, Vol. 29, No. 9, pp:
29-35.
Bogner, W. C. and Thomas, H. (1992), Core competence and competitive advantage: A model and
illustrative evidence from the pharmaceutical industry. BEBR faculty working paper; no.
92-0174.
Braun, V. and Clarke, V. (2006), “Using thematic analysis in psychology”, Qualitative Research
in Psychology, Vol. 3, No. 2, pp: 77-101.
Cooper, D. R. and Schindler, P. S. (2008), “Business methods”, Irwin/McGraw-Hill, Boston.
Coyne, K. P. (1985), “Sustainable competitive advantage: What it is, what it isn't”, Business
Horizons, Vol. 29, No. 1, pp: 54-61.
Creswell, J. W. (2009), “Editorial: Mapping the field of mixed methods research”, Journal of
Mixed Methods Research, Vol. 3, No. 2, pp: 95-108.
Creswell, J. W. (2012), “Qualitative inquiry and research design: Choosing among five
approaches”, Sage publications, California.
Day, G. S. (1994), “The capabilities of market-driven organizations”, Journal of Marketing, Vol.
58, No. 4, pp: 37-52.
Duysters, G. and Hagedoorn, J. (2000), “Core competencies and company performance in the
world-wide computer industry”, Journal of High Technology Management Research, Vol.
11, No. 1, pp: 75-91.
Galbreath, J. T. (2004), “Determinants of firm success: A resource-based analysis” Curtin
University of Technology, Doctor of Philosophy Thesis. Retrieved from https://espace.curtin.edu.au/bitstream/handle/20.500.11937/2311/15533_GalbreathPhDel
ec.pdf?sequence=2.
Gallon, M. R., Stillman, H. M. and Coates, D. (1995), “Putting core competency thinking into
practice”, Research Technology Management, Vol. 38, No. 3, pp: 20-28.
Ghadokolaei, A. S., Bagheri, S. M. and Keshavarz, E. (2013), “Designing competitive advantage
model with technology oriented approach using FAHP technique: A case study in coil
industry”, Journal of Engineering Science and Technology, Vol. 8, No. 2, pp: 233-252.
Gilgeous, V. and Parveen, K. (2001), “Core competency requirements for manufacturing
effectiveness”, Integrated Manufacturing Systems, Vol. 12, No. 3, pp: 217-227.
Grant, R. M. (2002), “Contemporary strategy analysis; concept, technique, applications”, Oxford,
Blackwell.
Gupta, S., Woodside, A., Dubelaar, C. and Bradmore, D. (2009), “Diffusing knowledge-based core
competencies for leveraging innovation strategies: Modelling outsourcing to knowledge
process organizations in pharmaceutical networks”, Industrial Marketing Management,
Vol. 38, pp: 219-227.
Hafeez, K., Zhang, Y., and Malak, N. (2002), “Core competence for sustainable competitive
advantage: a structured methodology for identifying core competence”, IEEE Transactions
on Engineering Management, Vol. 49, No. 1, pp: 28-35.
Hamel, G. and Prahalad C. K. (1994), Competing for the future. Boston, Massachusetts: Harvard
Business School Press.
Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E. and Schlesinger, L. A. (1994), “Putting
the service profit chain to work”, Harvard Business Review, Vol. 72, No. 2, pp: 164-174.
Hill, C. W. L., Jones, G. R. and Galvin, P. (2007), “Strategic Management: An Integrated
Approach (2e)”, John Wiley and Sons, Queensland.
Inkpen, A. C. and Moffett, M. H. (2011), “The global oil and gas industry: management, strategy
& finance”, PennWell Books, Oklahoma.
Inmyxai, S. and Takahashi, Y. (2010), “The effect of firm resources on business performance of
male and female headed firms in the case of Lao micro, small, and medium sized
enterprises (MSMEs)”, International Journal of Business and Information, Vol. 5, No. 1,
pp: 63-90.
Javidan, M. (1998), “Core competence: what does it mean in practice?”, Long Range Planning,
Vol. 31, No. 1, pp: 60-71.
Jennings, D. R., Feiten, J. B., and Brock, H. R. (2000), “Petroleum Accounting: Principles,
procedures and issues, 5th edition”, Professional Development Institute, Denton, Texas.
Kak, A. and Sushil, H. (2002), “Sustainable competitive advantage with core competence: A
review”, Global Journal of Flexible Systems Management, Vol. 3, No. 4, pp: 23-38.
Kale, P. and Singh, H. (2007), “Building firm capabilities through learning: the role of the alliance
learning process in alliance capability and firm-level alliance success”, Strategic
Management Journal, Vol. 28, No. 10, pp: 987-1000.
Kaplan, R. S. and Norton, D. P. (2005), “The balanced scorecard: measures that drive
performance”, Harvard Business Review, Vol. 83, No. 7, pp: 172-181.
Lee, C., and Pennings, J. M. K. (2001), “Internal Capabilities, external networks, and performance:
a study on technology-based ventures”, Strategic Management Journal, Vol. 22, No. 6-7,
pp: 615-640.
Liao, S. H. (2005), “Technology management methodologies and applications: a literature review
from 1995 to 2003”, Technovation, Vol. 25, No. 4, pp: 381-393.
Malgwi, A. A., and Dahiru, H. (2014), “Balanced Scorecard financial measurement of
organisational performance: A review”, IOSR Journal of Economics and Finance, Vol. 4,
No. 6, pp: 1-10.
Meutia and Ismail, T. (2012), “The development of entrepreneurial social competence and
business network to improve competitive advantage and business performance of small
medium-sized enterprises: A case study of batik industry in Indonesia”, Procedia Social
and Behavioural Sciences, Vol. 65, pp: 46-51.
Miller, D. Eisenstat, R. and Foote, N. (2002), “Strategy from the inside out: Building capabilitycreating
organizations”, California Management Review, Vol. 44, No. 3, pp: 37-54.
Montes, J. L. Moreno, A. R., and Morales, V. G. (2005), “Influence of support leadership and
teamwork cohesion on organizational learning, innovation and performance: an empirical
examination”, Technovation, Vol. 25, No. 10, pp: 1159-1172.
Nelson, R. R. and Winter, S. G. (1982), “An evolutionary theory of economic behaviour and
capabilities”, Harvard University Press, Cambridge.
Özbağ, G. K. (2013), “Resource based view, core competence and innovation: A research on
Turkish manufacturing industry”, Scientific Research Journal, Vol. 1, No. 3, pp: 9-17.
Patton, M. Q. (2002), “Two decades of developments in qualitative inquiry a personal, experiential
perspective”, Qualitative Social Work, Vol. 1, No. 3, pp: 261-283.
Pearce II, J. A., and Robinson, R. B. (2013), “Strategic Management: Planning for Domestic and
Global Competition”, McGraw Hill, New York.
Pitt, M. and Clarke, K. (1999), “Competing on competence: A knowledge perspective on the
management of strategic innovation”, Technology Analysis and Strategic Management,
Vol. 11, No. 3, pp: 301-316.
Prahalad, C. K. and Hamel, G. (1990), “The core competencies of the corporation”, The Harvard
Business Review, pp: 79-91.
Prahalad, C. K. and Ramaswamy, V. (2004), “Co-creating unique value with customers”, Strategy
and Leadership, Vol. 32, No. 3, pp: 4-9.
Schilling, M. A. (2017), “Strategic management of technological innovation (5th Edition)”,
McGraw-Hill, New York.
Sekaran, U. and Bougie, R. (2010), “Theoretical framework in theoretical framework and
hypothesis development. Research Methods for Business: A Skill Building Approach”,
John Wiley and Sons, Hoboken, New Jersey.
Shuen, A., Feiler P. F. and Teece, T. J. (2014), “Dynamic capabilities in the upstream oil and gas
sector: Managing next-generation competition”, Energy Strategy Reviews, Vol. 3, pp: 5-
13.
Simon, A., Kumar, V., Schoeman, P., Moffat, P. and Power, D. (2011), “Strategic capabilities and
their relationship to organisational success and its measures: some pointers from five
Australian studies”, Management Decision, Vol. 49, No. 8, pp: 1305-1326.
Simon, A., Schoeman, P. and Sohal, A. (2010), “Prioritised best practices in a ratified consulting
services maturity model for ERP consulting”, Journal of Enterprise Information
Management, Vol. 23, No. 1, pp: 100-124.
Srivastava, S. C. (2005), “Managing core competence of the organization”, Vikalpa, Vol. 30, No.
4, pp: 49-50.
Stadler, C., Helfat, C. E., and Verona, G. (2013), “The impact of dynamic capabilities on resource
access and development”, Organization Science, Vol. 24, No. 6, pp: 1782-1804.
Sullivan, A. (2001), “Cultural Capital and Educational Attainment”, Sage Journals, Vol. 35, No.
4, pp: 293-912.
Swift, P. E., and Hwang, A. (2008), “Learning, dynamic capabilities and operating routines: A
consumer package goods company”, The Learning Organization, Vol. 15, No. 1, pp: 75-
95.
Thompson, A. A., Arthur, A., Strickland, A. J., and Gamble, E. J. (2010), “Crafting and Executing
Strategy: The Quest for Competitive Advantage: Concept and Cases”, the McGraw Hill
Company, New York.
Tyler, B. B. (2001), “The complementarity of cooperative and technological competencies: A
resource-based perspective”, Journal of Engineering and Technology Management, Vol.
18, No. 1, pp: 1-27.
Vactor, S. V. (2010), “Introduction to the global oil and gas business”, Penwell Books, Tulsa,
Oklahoma.
Wang, Y., Lo, H. and Yang, Y. (2004), “The constituents of core competencies and firm
performance: evidence from high-technology firms in China”, Journal of Engineering and
Technology Management, Vol. 21, pp: 249-280.
Wernerfelt, B. (1984), “A resource-based view of the firm”, Strategic Management Journal, Vol.
5, No. 2, pp: 171-180.
Whitehill, M. (1997), “Knowledge-based strategy to deliver sustained competitive advantage”
Long Range Planning, Vol. 30, No. 4, pp: 621-627.
Yang, C. C. (2015), “The integrated model of core competence and core capability”, Total Quality
Management and Business Excellence, Vol. 26, No. 1-2, pp: 173-189.
Zehner, B. W. (2000), “The management of technology degree: a bridge between technology and
strategic management”, Technology Analysis and Strategic Management, Vol. 12, No. 2,
pp: 283-291.
advantage and organizational performance”, International Journal of Business and
Management, Vol. 7, No. 1, pp: 192-204.
Ashton, C. (1996), “How competencies boost performance”, Management Development Review,
Vol. 9, No. 3, pp: 14-19.
Bani-Hani, J. S., and Al-Hawary, F. (2009), “The impact of core competences on competitive
advantage: Strategic challenge”, International Bulletin of Business Administration, Vol. 6,
pp: 93-104.
Barney, J. B. (1991), “Firm resources and sustained competitive advantage”, Journal of
Management, Vol. 17, No. 1, pp: 99–120.
Bergenhenegouwen, G., Horn, H. and Mooijman, E. (1996), “Competence development– a
challenge for HRM professionals: Core competences of organisations as guidelines for the
development of employees”, Journal of European Industrial Training, Vol. 29, No. 9, pp:
29-35.
Bogner, W. C. and Thomas, H. (1992), Core competence and competitive advantage: A model and
illustrative evidence from the pharmaceutical industry. BEBR faculty working paper; no.
92-0174.
Braun, V. and Clarke, V. (2006), “Using thematic analysis in psychology”, Qualitative Research
in Psychology, Vol. 3, No. 2, pp: 77-101.
Cooper, D. R. and Schindler, P. S. (2008), “Business methods”, Irwin/McGraw-Hill, Boston.
Coyne, K. P. (1985), “Sustainable competitive advantage: What it is, what it isn't”, Business
Horizons, Vol. 29, No. 1, pp: 54-61.
Creswell, J. W. (2009), “Editorial: Mapping the field of mixed methods research”, Journal of
Mixed Methods Research, Vol. 3, No. 2, pp: 95-108.
Creswell, J. W. (2012), “Qualitative inquiry and research design: Choosing among five
approaches”, Sage publications, California.
Day, G. S. (1994), “The capabilities of market-driven organizations”, Journal of Marketing, Vol.
58, No. 4, pp: 37-52.
Duysters, G. and Hagedoorn, J. (2000), “Core competencies and company performance in the
world-wide computer industry”, Journal of High Technology Management Research, Vol.
11, No. 1, pp: 75-91.
Galbreath, J. T. (2004), “Determinants of firm success: A resource-based analysis” Curtin
University of Technology, Doctor of Philosophy Thesis. Retrieved from https://espace.curtin.edu.au/bitstream/handle/20.500.11937/2311/15533_GalbreathPhDel
ec.pdf?sequence=2.
Gallon, M. R., Stillman, H. M. and Coates, D. (1995), “Putting core competency thinking into
practice”, Research Technology Management, Vol. 38, No. 3, pp: 20-28.
Ghadokolaei, A. S., Bagheri, S. M. and Keshavarz, E. (2013), “Designing competitive advantage
model with technology oriented approach using FAHP technique: A case study in coil
industry”, Journal of Engineering Science and Technology, Vol. 8, No. 2, pp: 233-252.
Gilgeous, V. and Parveen, K. (2001), “Core competency requirements for manufacturing
effectiveness”, Integrated Manufacturing Systems, Vol. 12, No. 3, pp: 217-227.
Grant, R. M. (2002), “Contemporary strategy analysis; concept, technique, applications”, Oxford,
Blackwell.
Gupta, S., Woodside, A., Dubelaar, C. and Bradmore, D. (2009), “Diffusing knowledge-based core
competencies for leveraging innovation strategies: Modelling outsourcing to knowledge
process organizations in pharmaceutical networks”, Industrial Marketing Management,
Vol. 38, pp: 219-227.
Hafeez, K., Zhang, Y., and Malak, N. (2002), “Core competence for sustainable competitive
advantage: a structured methodology for identifying core competence”, IEEE Transactions
on Engineering Management, Vol. 49, No. 1, pp: 28-35.
Hamel, G. and Prahalad C. K. (1994), Competing for the future. Boston, Massachusetts: Harvard
Business School Press.
Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E. and Schlesinger, L. A. (1994), “Putting
the service profit chain to work”, Harvard Business Review, Vol. 72, No. 2, pp: 164-174.
Hill, C. W. L., Jones, G. R. and Galvin, P. (2007), “Strategic Management: An Integrated
Approach (2e)”, John Wiley and Sons, Queensland.
Inkpen, A. C. and Moffett, M. H. (2011), “The global oil and gas industry: management, strategy
& finance”, PennWell Books, Oklahoma.
Inmyxai, S. and Takahashi, Y. (2010), “The effect of firm resources on business performance of
male and female headed firms in the case of Lao micro, small, and medium sized
enterprises (MSMEs)”, International Journal of Business and Information, Vol. 5, No. 1,
pp: 63-90.
Javidan, M. (1998), “Core competence: what does it mean in practice?”, Long Range Planning,
Vol. 31, No. 1, pp: 60-71.
Jennings, D. R., Feiten, J. B., and Brock, H. R. (2000), “Petroleum Accounting: Principles,
procedures and issues, 5th edition”, Professional Development Institute, Denton, Texas.
Kak, A. and Sushil, H. (2002), “Sustainable competitive advantage with core competence: A
review”, Global Journal of Flexible Systems Management, Vol. 3, No. 4, pp: 23-38.
Kale, P. and Singh, H. (2007), “Building firm capabilities through learning: the role of the alliance
learning process in alliance capability and firm-level alliance success”, Strategic
Management Journal, Vol. 28, No. 10, pp: 987-1000.
Kaplan, R. S. and Norton, D. P. (2005), “The balanced scorecard: measures that drive
performance”, Harvard Business Review, Vol. 83, No. 7, pp: 172-181.
Lee, C., and Pennings, J. M. K. (2001), “Internal Capabilities, external networks, and performance:
a study on technology-based ventures”, Strategic Management Journal, Vol. 22, No. 6-7,
pp: 615-640.
Liao, S. H. (2005), “Technology management methodologies and applications: a literature review
from 1995 to 2003”, Technovation, Vol. 25, No. 4, pp: 381-393.
Malgwi, A. A., and Dahiru, H. (2014), “Balanced Scorecard financial measurement of
organisational performance: A review”, IOSR Journal of Economics and Finance, Vol. 4,
No. 6, pp: 1-10.
Meutia and Ismail, T. (2012), “The development of entrepreneurial social competence and
business network to improve competitive advantage and business performance of small
medium-sized enterprises: A case study of batik industry in Indonesia”, Procedia Social
and Behavioural Sciences, Vol. 65, pp: 46-51.
Miller, D. Eisenstat, R. and Foote, N. (2002), “Strategy from the inside out: Building capabilitycreating
organizations”, California Management Review, Vol. 44, No. 3, pp: 37-54.
Montes, J. L. Moreno, A. R., and Morales, V. G. (2005), “Influence of support leadership and
teamwork cohesion on organizational learning, innovation and performance: an empirical
examination”, Technovation, Vol. 25, No. 10, pp: 1159-1172.
Nelson, R. R. and Winter, S. G. (1982), “An evolutionary theory of economic behaviour and
capabilities”, Harvard University Press, Cambridge.
Özbağ, G. K. (2013), “Resource based view, core competence and innovation: A research on
Turkish manufacturing industry”, Scientific Research Journal, Vol. 1, No. 3, pp: 9-17.
Patton, M. Q. (2002), “Two decades of developments in qualitative inquiry a personal, experiential
perspective”, Qualitative Social Work, Vol. 1, No. 3, pp: 261-283.
Pearce II, J. A., and Robinson, R. B. (2013), “Strategic Management: Planning for Domestic and
Global Competition”, McGraw Hill, New York.
Pitt, M. and Clarke, K. (1999), “Competing on competence: A knowledge perspective on the
management of strategic innovation”, Technology Analysis and Strategic Management,
Vol. 11, No. 3, pp: 301-316.
Prahalad, C. K. and Hamel, G. (1990), “The core competencies of the corporation”, The Harvard
Business Review, pp: 79-91.
Prahalad, C. K. and Ramaswamy, V. (2004), “Co-creating unique value with customers”, Strategy
and Leadership, Vol. 32, No. 3, pp: 4-9.
Schilling, M. A. (2017), “Strategic management of technological innovation (5th Edition)”,
McGraw-Hill, New York.
Sekaran, U. and Bougie, R. (2010), “Theoretical framework in theoretical framework and
hypothesis development. Research Methods for Business: A Skill Building Approach”,
John Wiley and Sons, Hoboken, New Jersey.
Shuen, A., Feiler P. F. and Teece, T. J. (2014), “Dynamic capabilities in the upstream oil and gas
sector: Managing next-generation competition”, Energy Strategy Reviews, Vol. 3, pp: 5-
13.
Simon, A., Kumar, V., Schoeman, P., Moffat, P. and Power, D. (2011), “Strategic capabilities and
their relationship to organisational success and its measures: some pointers from five
Australian studies”, Management Decision, Vol. 49, No. 8, pp: 1305-1326.
Simon, A., Schoeman, P. and Sohal, A. (2010), “Prioritised best practices in a ratified consulting
services maturity model for ERP consulting”, Journal of Enterprise Information
Management, Vol. 23, No. 1, pp: 100-124.
Srivastava, S. C. (2005), “Managing core competence of the organization”, Vikalpa, Vol. 30, No.
4, pp: 49-50.
Stadler, C., Helfat, C. E., and Verona, G. (2013), “The impact of dynamic capabilities on resource
access and development”, Organization Science, Vol. 24, No. 6, pp: 1782-1804.
Sullivan, A. (2001), “Cultural Capital and Educational Attainment”, Sage Journals, Vol. 35, No.
4, pp: 293-912.
Swift, P. E., and Hwang, A. (2008), “Learning, dynamic capabilities and operating routines: A
consumer package goods company”, The Learning Organization, Vol. 15, No. 1, pp: 75-
95.
Thompson, A. A., Arthur, A., Strickland, A. J., and Gamble, E. J. (2010), “Crafting and Executing
Strategy: The Quest for Competitive Advantage: Concept and Cases”, the McGraw Hill
Company, New York.
Tyler, B. B. (2001), “The complementarity of cooperative and technological competencies: A
resource-based perspective”, Journal of Engineering and Technology Management, Vol.
18, No. 1, pp: 1-27.
Vactor, S. V. (2010), “Introduction to the global oil and gas business”, Penwell Books, Tulsa,
Oklahoma.
Wang, Y., Lo, H. and Yang, Y. (2004), “The constituents of core competencies and firm
performance: evidence from high-technology firms in China”, Journal of Engineering and
Technology Management, Vol. 21, pp: 249-280.
Wernerfelt, B. (1984), “A resource-based view of the firm”, Strategic Management Journal, Vol.
5, No. 2, pp: 171-180.
Whitehill, M. (1997), “Knowledge-based strategy to deliver sustained competitive advantage”
Long Range Planning, Vol. 30, No. 4, pp: 621-627.
Yang, C. C. (2015), “The integrated model of core competence and core capability”, Total Quality
Management and Business Excellence, Vol. 26, No. 1-2, pp: 173-189.
Zehner, B. W. (2000), “The management of technology degree: a bridge between technology and
strategic management”, Technology Analysis and Strategic Management, Vol. 12, No. 2,
pp: 283-291.
How to Cite
Krishnan, Deven, and Rafikul Islam. 2020. “Enhancing Financial and Strategic Performance through Core Competencies and Competitive Advantage: A Thematic Analysis”. Studies in Business and Economics 22 (1):24-40. https://doi.org/10.29117/sbe.2019.0112.
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