ABSTRACT
This chapter provides the concepts of competences are brought into an organizational context to determine how they can be managed in such a way that they contribute to an organization's innovative capabilities and competitive advantage. In the same way as for competences, the usage of the competence loop is also influenced by the context and the organizational culture and identity. The competence loop framework consists of two learning strategies, the exploratory and the exploitative learning strategy. The combination of interpreting new competences and performance measurement will be more efficient, especially if the goal-setting activities are considered based on fast-moving conditions. The chapter identifies the concept of core competences and competence management and continue by investigating the dynamic capabilities that link competence management to a competitive advantage. Dynamic capabilities have their roots in the resource-based view and in a firm's ability to integrate, build, and reconfigure its external and internal competences to meet changing market conditions and, in this way, create a competitive advantage.
