As part of a research project on cooperation between software development subcontractors from small countries and foreign customers, the dynamics of intercultural competence are being examined. This paper builds a conceptual bridge by developing a definition of organizational intercultural competence on the basis of socio-psychological and human resource management definitions of the term at the level of individuals and definitions of organizational competence from the resource-based perspective. Furthermore a model of the dynamics of intercultural competence development in the software industry is presented. In connection with the model, key economic aspects - including strategic importance, heterogeneity, imperfect mobility, ex ante limits to competition, dynamic transaction costs, time compression diseconomies, assets mass efficiencies, and asset erosion - are described. It is envisioned that the presented novel framework could be helpful to software developing subcontractors from small national states who already use the competence terminology in discussions of their firms' capabilities and strategies.
Challenges of Innovation and Technology Management for the New Millennium, 2001, p. 329-336