Johan Roos and Georg von Krogh go beyond contemporary theories of firms' competitive advantages to point out that most firms compete on competencies, and therefore possession of competence is the key to success. Competence itself is simply the synthesis of a firm's particular task and knowledge systems. The authors explore the nature of these systems and argue that skilfully combining them gives a firm its 'competence configuration' which represents the time potential of the organization. © 1992.