ce reflects this." These findings explain the growing trend a m o ng comp anies 10 "hire for attitude; train for skills .'' Identifying Organizational Capabilities . b . . , n · s close IO useles ,, Resources are not productive o n thetr o\vn. A ra in !SLirgeo 1 · . withoul a raclio logisL. anesthetisc, nurses, surgical ins1n11nents. imaging eqwpme nl. k = 1st work" rogether. and a host or other resources. To perform a tas , resource" mL -. 6n__organiza1ional capability--is- a "fim1:s capacity--to deploy res ources fo r a desin~d end result."" J ust as an individual may be cap a b le o f playing the v iolin, rce -s kanng. and speaking Mandarin, so a n organization may possess 1he cap abilities needed 10 manufacture widgets, distribute them globally, and hedge the resulting fo re ign-exchange exposure. Altho ug h the idea thal organizations possess distinctive competences is lo ng estab-lised '6 it was no t until Prahalad and Hamel introduced the tenn core compete11ces to cl~scribe those capabilities fundamental to a firm·s strategy and performance that organizational capabilities became a central concept in strategy analysis." The resulting flood of literature has created considerable confusio n over 1erminology: I shall use the terms ccipcibility and competence interchangeably.'" Classifying Capabilities Before deciding whic h organizatio n a l capabilities a re "distinctive" o r "core," the firms needs to take a systematic view of its capabilities. To identify a firm's organizational capabilities, w e need to have some basis for clas-sifying and disa~regating the firm's activities. Two approaches a re commonly used: • A functioncil a.!IBD'sis identifies o rganizatio nal capabilities within each of the firm's functional area: A firm 's functions would typically include: operations, pu~mg, og1stics supply c hain management, d~n. engineerin~ product developn'lerlt, marketing, sales and d istribution, c us tornerservice, fina~ce, hu1nan resourc~nagernent, legal, info~ion systen1s, govern-ment relations. communicatio n and public re lations, and HSE ( health. safely . and environn1ent). • A value..cbciin.analysis icle n1ifies a sequential chai!l__ of the main a.~es that the firm undertakes. Michae l Porter's generic value cha in distinguishes between' pnmary_::ictlvi"ties (those involved with 1he transformation of inputs and interface with the customer) and suppo rt activities (Figure 5.5)." Porter's b roadly defined value chain activities can be d isaggregated to provide a mo re d etailed identificatio n of the firm's activities (and the capabililies tha t correspond to each activity). Thus, marketing might include market research .