Introduction The 1990 paper on core competencies by Prahalad and Hamel is the most reprinted article in the history of the Harvard Business Review. At a prac- tical level, it has prompted many companies in both the USA and the UK to undertake the search for their own core competencies (e.g. Collis and Montgomery, 1995; Watson, 1994). Many articles have sought to operationalize the concept (Gallon et al., 1995; Henderson and Cockburn, 1994). For the purposes of this paper, however, the most important aspect of the core competence idea is its popular encapsulation of an emerging and increasingly influential approach to strategic management; the resource-based theory of the firm. This paper argues that core competencies and other variants of this approach bring the con- cerns of strategic management much closer to the traditional preserve of organization theorists. Questions of organizational culture, structure and knowledge which have long preoccupied organ- ization theorists resurface, sometimes in a differ- ent vocabulary but with substantially similar implications, in the debates on core competen- cies. This convergence of interest suggests fresh British Journal of Management, Vol. 9, 219–232 (1998) Path(ological) Dependency? Core Competencies from an Organizational Perspective Harry Scarbrough Warwick Business School, University of Warwick, Coventry CV4 7AL, UK The development of the ‘resource-based theory of the firm’ has helped to reorient the field of strategic management towards a focus on the organizational processes and structures which produce ‘core competencies’. By challenging previous assumptions of market determinism this approach seems to open up the prospect of a greater dialogue with the theories and concerns of organization studies. This paper aims to determine the scope of such a dialogue by developing an appreciation and critique of the core com- petencies framework from an organizational perspective. In this context, the key fea- ture of resource-based theories is seen to be their focus on organizational knowledge rather than decision-making processes as the engine of competitive performance. This focus has a powerful resonance with studies of knowledge in organizations, particularly those forms of knowledge which are linked to product and process design. However, despite the important shift towards a knowledge-based view of competition, the core competencies approach fails to follow the logic of its own argument as far as the organizational appropriation of knowledge is concerned. In their pursuit of an ontological model of competitive performance – defining the essential causes of firm competitiveness – resource-based approaches neglect the socially embedded qualities of organizational knowledge. As a result, the social construction of knowledge, encom- passing the dilemmas posed by the employment relationship and the pitfalls of institu- tionalization, is neglected. Instead, a smoothly linear model is developed linking skills, competence and competitiveness. This mechanistic view is further reinforced by reli- ance on a command and control model of the management process. Organizational knowledge is not a biddable resource at the disposal of top management. Keywords: organizational knowledge, core competence, resource-based theory © 1998 British Academy of Management