Financial Valuation of a Core Competence

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Sharla E. Webb

Financial Valuation of a Core Competence

How can a firm determine the financial valuation of individual CCs? How can we measure the value of a core competence?

  Srikanth
Student (University)
 

Financial Value of a Core Compentence

I feel enlighted with the critical thinking of the author.

  Jaap de Jonge
Editor, Netherlands
 

The Financial Value of a Core Competence

Be careful going this road... Core competences are strategic 'assets'. They do have some form of a financial value, but their true strategic value is typically beyond just that.
I believe it was Einstein who said: 'Not everything that is valuable can be measured, and likewise not everything that can be measured is valuable'...

  CESAR ARECHIGA
Management Consultant, Mexico
 

The Financial Value of Core Competence

I assume we are talking about business. Businesses are to be profitable. Profitability is always measured (see any P & L statement, which never shows innovation, superb service, unusual quality, leadership, special skills, of the personnel).
People are a "resource" to contribute to making the company profitable through their performance. Hence, measuring that performance is a must to value the Core Competence, on an individual basis of all hierarchical levels. There is a system (software) that eliminates the partial and subjective judgement when personnel is being evaluated. This software rates automatically the results of the individual performance, calculates an average rate for every employee (from modest to top positions). IT provides a total company average rate of performance for top management. In a scale from 1 to 10, a company with a 8.7 average rate of performance looks better than a competitor, in the same market, rated 7.2. In this way a Core Competence can be objectively measured.

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