The development of new competence in established organizations: An empirical investigation

Rita Gunther McGrath, University of Pennsylvania


Progress in the resource-based approach to strategy faces three obstacles: (1) lack of acceptable definitions and operationalization of key constructs, in particular of organizational competence; (2) lack of measures and (3) ill-specified relationships between constructs. Addressing these gaps motivates this research with respect to both the consequence and antecedents of organizational competence. Survey instruments were developed which address definitional, reliability and validity issues. The survey was administered to a sample of 35 project teams from 5 established organizations. Consequences of being competent. Results suggest a strong positive relationship between competence and the expectation for Ricardian rents, based on the potential for a project to deliver unusual firm efficiency. A more complex relationship appears to exist in the case of creating unusual customer value. Antecedents to becoming competent. A powerful positive effect on competence of group 'deftness" (a new construct measuring the effectiveness of group processes) was found. A similar positive relationship was found between the richness of a project group's causal understanding and competence. The most surprising result shows that organic organizational structures are only positively related to competence when group deftness is high, when causal understanding is rich, and when the level of newness (or exploration) of the project is low. This contradicts tenets of accepted innovation theory. Contribution. Contributions of the dissertation are (1) the definition and operationalization of key constructs; (2) an empirical demonstration of a link between being competent and the expectation of Ricardian rent; (3) an empirical demonstration of linkages between management decision variables, context and competence; (4) the creation of a database of intra-firm information, essential to advance empirical study of resource-based theory; (5) an integration of content and process themes (offering promise of being able to assess the relative contribution made by each) and (6) the creation of diagnostic tools which are useful for practitioners.

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Recommended Citation

McGrath, Rita Gunther, "The development of new competence in established organizations: An empirical investigation" (1993). Dissertations available from ProQuest. AAI9321441.