Linking intellectual capital and competitive advantage: A cross-firm competence model for north-east Italian SMEs in the manufacturing industry

Abstract

Abstract While large, international enterprises have developed/adopted state-of-the-art business practices and knowledge management systems, in SMEs (small and medium enterprises) individual competences usually represent the cornerstone of a firm's intellectual capital and a key determinant of organizational performance. The increasingly fierce competition deriving from globalization and ICT has challenged this approach calling for new ways to develop, diffuse and retain knowledge in SMEs. Starting from the assumption that SMEs' core capabilities and intellectual capital are deeply rooted in personal knowledge, and building on competence modelling and development research, this article identifies a cross-firm competence model for middle managers working in SMEs in north-eastern Italy and relates it to these companies' core capabilities. The article presents the results of a two-year field study on the individual skills and competences of 310 middle managers in the manufacturing, product design and accounting departments of 46 SMEs. It also draws some managerial implications in terms of competence-based human resource management systems in SMEs.