Organisational learning and competence development Anders Drejer 1. Competence development ± the missing link? Today, there seems to be near total agreement with the assertion that the notion of ``core competences'' is paramount to explaining competitiveness of the firm. Since Prahalad and Hamel's seminal paper on the subject (Prahalad and Hamel, 1990) there has been a surge of interest in competences and competence-based strategy followed by a stream of conferences, books and, now, an international association for competence- based strategy (Sanchez, 2000). The literature on core competences and competence-based strategy has many virtues, but being specific with regard to the structural characteristics of competences is not one of them. In a previous publication, Drejer and Riis (1999) have argued that most competence definitions in the literature are based on functional characteristics, i.e. what are the effects caused by a competence? This works for those who are mainly interested in the strategic implications of a competence, as an effect could be value delivered to customers, and hence the creation of competitive advantage. In other words, if our game is competitive strategy alone, these are the kinds of definitions you would want to look for. However, this only explains part of the truth about competences. Competence is one among other concepts Incidentally, ``competences'' is merely the latest ± but perhaps greatest ± of a number of conceptions aimed at explaining the competitiveness of a firm, i.e. why some firms achieve better performance than others with similar functional characteristics in terms of, for instance, product-market strategy, and so on. This issue has been discussed for as long as we have had the notion of strategic management in the vocabulary. Right back to Penrose's idea of the firm as a collection of resources (Penrose, 1959) and its later come- back as ``the resource-based view of the firm'' (e.g. Wernerfelt, 1984; Barney, 1991) and the classic SWOT analysis, generally attributed to Kenneth Andrews (1960), researchers have attempted to explain to managers what internal, structural issues of the firm needed attention in the process of strategic management (Drejer, 1996). Please note that the author also includes ``soft'' aspects such as human knowledge and corporate culture in The author Anders Drejer is a Senior Lecturer at the Center for Industrial Production, Aalborg University, Denmark. Keywords Competences, Organizational learning, Competency framework, Strategy Abstract This paper is concerned with the formulation of a framework for understanding the development and change of the competences of firms. Today, there is near universal agreement that the competitiveness of firms rests on the (core) competences that firms possess. However, little attention has been devoted to the notion of competence development. In the paper, it will be argued that there is, indeed, a need for research and management practice of competence development. It will also be argued that organisational learning theory is a key to understanding competence development. Based on this, a model for competence development is proposed. This is the main contribution of the paper. The paper then concludes with a number of questions yet to be answered by research on competence-based strategy. Electronic access The current issue and full text archive of this journal is available at http://www.emerald-library.com 206 The Learning Organization Volume 7 . Number 4 . 2000 . pp. 206±220 # MCB University Press . ISSN 0969-6474