Competence Building, Corporate Renewal and Value Creation – A Case Study

Abstract

Which courses of action and levers are used by companies in the quest for renewal? Do renewal initiatives create value for the company? Can successful renewal initiatives provide models for managers committed to change, enabling them to identify certain levers that can be exploited in their own drives for renewal? This paper aims at providing answers to these questions by describing different aspects (implementation and corporate value creation perspectives) of the renewal experience conducted in 1993 by a large French electrical engineering company, Spie-Trindel. In this company, a competence building process was identified and analyzed as a driving force behind renewal. Thanks to an analysis of different performance measures (return on investment, return on equity and stock market prices) of Spie-Trindel, the competence building process was studied as a transformational leverage and its impact on the resulting value creation of the company was put into light. Moreover, this paper provides a concrete and detailed description of a specific competence building process which led the company to both alter the hierarchy of competences (see “reordering mechanisms”) and institutionalize new competences (see “institutionalization and routinization mechanisms”) within its core competence portfolio.

Citation

Meschi, P.-X. and Cremer, E. (2005), "Competence Building, Corporate Renewal and Value Creation – A Case Study", Sanchez, R. and Heene, A. (Ed.) Competence Perspectives on Resources, Stakeholders and Renewal (Advances in Applied Business Strategy, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 305-325. https://doi.org/10.1016/S0749-6826(05)09014-1