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What Is Business Competency?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 16 August 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
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Business competency is a term that is used to describe the quality of various elements present within a business operation that allow the company to function with an equitable degree of efficiency. With the broad range of competency, a number of different factors such as interpersonal dynamics, communication lines, organizational structures, and knowledge and skill levels are addressed, often with an eye of improving the use of each of these assets to move the company closer to its goals.

In evaluating business competency, the process often begins with a review of the basic operational structure. Within this context, close attention to how the company is organized is evaluated, noting how the function of one department or division logically flows into the next. The idea is to make sure that all resources involved in the operation of those departments are used to best effect and that the functions of each area in turn serve to pave the way for the next steps in the production and delivery process, without causing issues or delays as the process moves forward.

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Looking closely at individual business tools is also important to assessing business competency. This includes making sure that employees are functioning roles that make the best use of their education, skills, and talents, and that they have opportunities to further hone their skills as a means of improving performance. Often, the human resources function within the company works closely with management to make sure employees are properly placed within the operation, and that those employees do have the chance to advance in the company when and as that advancement is considered beneficial to both the company and the employee.

Another aspect of business competency is the management style that is used within the corporate structure, and how that style helps to define the culture within the business. Ideally, the combination of management styles used by individual managers helps to create a culture in which all employees are able to communicate freely, expressing ideas or concerns in constructive ways that ultimately make the company a better place to work.

Along with organization, operational and cultural styles, and communication, business competency is also concerned with productivity and the generation of profits. In the best of scenarios, the organization and the working environment create a situation that allows employees to function at maximum efficiency, which in turn generates a continuous flow of sales and the products necessary to fill customer orders. Periodically evaluating each aspect of the operation makes it easier to adapt the company to new challenges, draw on the talents of employees to make the company stronger, and in general ensure that waste is kept to a minimum even as production continues to move upward.

Business competency can serve as a means of helping a company identify opportunities, deal quickly with issues that could threaten to undermine the operation, and cultivate a working environment that motivates employees to stay for the long-term and support the goals of the business. When applied correctly, this ongoing evaluation makes it possible to overcome many adverse situations while also remaining aware of opportunities for growth and expansion. While the exact process for determining the current level of business competency present in a given company will vary, based on factors such as size and scope of the operation, these core areas of focus will remain the same in businesses ranging from a locally owned retail shop to a multi-national corporation.

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