Journal of Air Transport Management 31 (2013) 23e26

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Journal of Air Transport Management

journal homepage: www.elsevier.com/locate/jairtraman

Note

Effect of core competence on organizational performance in an airport

shopping center
Chiung-Ju Liang a, Ying-Li Lin b, Hsiu-Feng Huang a, c, *
a

Graduate Institute of Finance, National Taiwan University of Science and Technology, No. 43, Sec. 4, Keelung Rd., Daan Dist., Taipei City 106, Taiwan
Department of Finance, Asia University, No. 500, Lioufeng Rd., Wufeng Dist., Taichung City 413, Taiwan
c
Department of Business Administration, De Lin Institute of Technology, No. 1, Ln. 380, Qingyun Rd., Tucheng Dist., New Taipei City 236, Taiwan
b

a b s t r a c t
Keywords:
Airport shopping center
Organizational performance
Core competence
Human capital

This paper examines the relationships among core competence, unobservable human capital, and
organizational performance conduct at an airport shopping center making use of personal interviews
and secondary data. Factor analysis and hierarchical models are used to explore the relationship between
performance and competence among employees. The ndings suggest that the variables of core
competences are positively correlated with organizational performance. Viewed from the perspective of
job position, the management and non-management core competences of employees have different
effects on organizational performances. The core competences of non-management, provide the greatest
contribution to the performance of the shopping center while those for management are irrelevant.
2012 Elsevier Ltd. All rights reserved.

1. Introduction
There has been a growth of shopping centers within airport
cities. For example, Singapore Changi Airport has the largest
shopping center in Singapore, covering an area of 40,000 square
meters and creating 13,000 jobs, while Koreas Incheon International airport provides venues for exhibition, conference, shopping,
and a nancial center. Linked with this is the concept of an Aerotropolis developed by Kasarda (2010) who argues that the business
link between the airport district and the main residential areas,
extends the economic effects of the airport development by up to
40 miles; the range we consider here in the context of a shopping
center in the south of Taiwan within 40 miles of Kaohsiung International airport.
2. Conceptual framework
We use the Iceberg Model developed by Spencer and Spencer
(1993) that relates core competence to work and involves ve
competences, namely, motives, traits, self-concept, knowledge, and
skills that can be used to conceptualize core competence (Fig. 1).

* Corresponding author. Department of Business Administration, De Lin Institute

of Technology, No. 1, Ln. 380, Qingyun Rd., Tucheng Dist., New Taipei City 236,
Taiwan. Tel.: 886 222006046.
E-mail address: yvonnewise@gmail.com (H.-F. Huang).
0969-6997/$ e see front matter 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.jairtraman.2012.11.005

The competences can further be grouped into their surface and

underlying characteristics, with job-related characteristics, such as
knowledge and skills, being easily observable.
The model used here (Fig. 2) examines the relationships
between performance and employee abilities, considering three
factors; observable human competences, core competence of
hidden parts, and the hidden core competence at different
employee levels. It takes the view that observable competences
play a mediating role between the core competence of hidden parts
and organizational performance. The core competence of hidden
parts also has a direct effect on performance.
Humans are generally considered the most valuable resources in
any organizations (Hesketh and Fleetwood, 2006). For example,
work on human resource and organizational performance (Becker
and Husield, 2001) has indicated that 80% of a rms value comes
from the human competences of the organization, while Grossman
(2000) suggested that Brooking is positively correlated to organizational performance. We thus hypothesize:

Hypothesis 1: Human capital is positively correlated with
performance.
Brooking (1996) considered human competences as education,
vocational qualication, work-related knowledge, work-related
competences and occupational assessments, and psychometrics,
while Chisholm (1976) distinguished knowledge, skills, and attitude.
Core competence includes knowledge, skills, and attitude (Blancero

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C.-J. Liang et al. / Journal of Air Transport Management 31 (2013) 23e26

Table 1
Denition of human capital variables.

Visible

Surface
Skill Knowledge

Hidden

Self-Concept Attitudes, Values

Core personality

Trait Motive

Denition
Four levels of education (score from 0 to 3), the highest
is the post-graduate degree and the lowest is completion
of high school.
Years of work experience at the shopping center.

Years of work
experience
Professional
skills
Work-related
competences

Fig. 1. Iceberg model.

et al., 1996) and combines the elements of knowledge, attitude, and

skills (Parry, 1998). This leads to our second hypothesis:

Hypothesis 2: Human capital is positively correlated with core
competence
Core competence can be measured by looking at acceptable
standards that are closely related to job performance (Parry, 1998).
Johlke (2006), for example, found that employees with workrelated capabilities perform better. Further, competence refers to
certain characteristics a person possesses, and these characteristics
can improve performance (Qingdong, 2009). This leads to;

Hypothesis 3: Core competence is positively correlated with
organizational performance
Core competence may change over time and with a persons job
position (Glosson and Schrock, 1985). Core competence also
pertains to how job positions, management, and non-management
affect performance (Chen and Wu, 2007). From these ndings,
Hypotheses 3-1 and 3-2 are examined.

Hypothesis 3-1: Core competence from management position
is positively correlated with organizational performance

Hypothesis 3-2: Core competence from non-management
position is positively correlated with organizational
performance

Years of work experience within the same organization

(the shopping center) in the past, the group implements
job training each year to improve professional skills.
Years of work experience in the past, related to the
present complex job position.

operations (19 and 37), and logistics (161 and 67), with the last
including planning, nance, asset management, human resources,
and general management. In 2010, there were 167 employees,
although the data used here relates to 2008. The mall measures
performance twice per year, and thus we use data for two periods
examined excluding samples with missing values; a sample of 247.
Organizational performance assessments embrace the proportion of personal contributions to the nancial targets set; this
combined sales, gross income, and net income. Following Brooking
(1996), we considered four proxy variables for human competences; education level, years of work experience, professional
skills, and work-related competences. Other human resource variables, such as age and gender are used as control variables. The
denition of human competences for the shopping center is shown
in Table 1.
The shopping center assesses core competences for each level of
employees using the job-organizational t model. All employees
are assessed by their department ofcers twice each year, rating
them from 4, the lowest, to 5, the highest, for every variable to
judge their core competence. The variables of core competences
differ between management and non-management. For all
employees, the four indices are good faith and reliability, customer
service orientation, achievement motivation, and innovation and
practice. For the management level, the three indices are
management acuity, ability of team leader, and policy management.
Table 2 gives the denitions.

Table 2
Denition of core competence variables.

3. Data and methodology

The shopping center examined is located close to Kaohsiung
International Airport, and the availability of local transport offers
the opportunities for those using the airport to visit it. An advertisement at the airport makes it clear that the mall is only 6 min
away via the transit. The shopping center is the largest in Taiwan.
Data were obtained on personnel and performance measures. The
center has developed performance assessment based on job
competence and all data are reects core competences. The
personal interviews conducted with the general management,
personnel management, and personnel ofcers lasted over 30 h.
The organizational structure of the mall involves marketing
(with 6 management positions and 21 non-management),

Characteristic
Motive
Trait
Knowledge
Self-concept

Variables
Education level

Behavior
Skill

Fig. 2. Analytical framework.

Performance

Variables

Denition

Core competence for non-management (CC-NM)

Good faith and reliability
Adheres to the philosophy and values, and
with an open mind to take difcult decisions.
Customer service orientation
Always takes the customers position and
meet customer demands.
Achievement motivation
Excellent entrepreneurship, dares to dream,
continually improving, challenges high
performance standards, and achieves
organizational and personal goals.
Innovation and practice.
New concepts on job creation, and the design
and application of innovation to practice.
Core competence for management (CC-M)
Management acuity
Has the necessary knowledge in retail,
shopping center outside the social, nancial,
management, consumer behavior, and the
development of science and technology.
Ability of team leader
Effectively motivates subordinates to set
high-performance goals and to promote the
achievement of those goals while establishing
the techniques and abilities required for
subordinates.
Policy management
Teams develop clear strategies and action
plans, and promote and implement the
strategies to achieve the desired objectives.

C.-J. Liang et al. / Journal of Air Transport Management 31 (2013) 23e26

H1
NonManagement

Human
capital

H2

H3-1

Financial
performance

Core
competence
for hidden

Management

H3-2

H3

Fig. 3. Research framework.

Following the framework in Fig. 3, a hierarchical model is used

to examine the relationship between performance and core
competence, and to determine the interaction between core
competence and human competences. An initial factor analysis is
performed on core competence of non-managers (CC-NM) and
managers (CC-M), and the standardized factor scores obtained then
subject to regression analysis to look for causal inuences. The
latter is used to explore whether an interaction exists between core
competence and human competences, which has an underlying
intermediary effect on performance. The model used is;

Yit a b1 HCit b2 CCit b3 AGit b4 GEit it

where Yit is employee is performance in year t, human competencesit is proxy for human competences in t, CCit is proxy for
core competence in t, nally, AGit and GEit are proxy for the
employee is age and sex, one is for male employees and zero is for
females.

25

In Model 1 using the management sub-sample, CC-NM has

a larger, signicant coefcient, although when the human competences variable is introduced CC-M is not signicant. For the nonmanagement sub-sample, CC-NM is positively signicant for H3-2
and H1, but if human competence is introduced into Model 2, the
associated coefcients decline slightly. Overall, hypotheses H3, 3-1,
and 3-2 are accepted. Experience is signicantly positive for nonmanagement sub-sample, partly supporting H1. The results also
show that H2 is not valid for two sub-samples; we do not report
this in Table 3.
The core competence of employees emerges as an important
factor in the performance of the mall, especially hidden characteristic, conrms other studies of service industries by Li et al.
(2008), in a study of the Taiwan Salon industry; Polyhart et al.
(2009) of a large retail organization and Polyhart et al. (2011) of
a restaurant chain.
We also nd that work experience within the shopping center is
the most important factor of human competences in the nonmanagement sub-sample and full sample. Professional skills and
work-related experience, however, have negative coefcients in all
groups, although they were not signicant. Working experience at
the shopping center is a very important factor in performance and
recruiting from the ranks of senior employees to ll managerial
positions is generally effective.
The negative coefcients relating to age are consistent with the
variables of human competences; work-related competence and
professional skills. These two variables reveal that the work experience outside the shopping center and professional skills are
associated with poorer performance. Employees who have work
experience may have acquired habits that are less innovative and
appropriate for their current jobs. Hence, past work experience and
knowledge may not t the needs of the shopping center.
5. Conclusion

4. Results
The results of the regression analysis are shown in Table 3, with
those for H3, H1and H2 shown in models 1, 2, and 3. The full sample
shows H3 strongly supported. In addition, when human competences are introduced into Model 2, the coefcient decreases
slightly and experience is signicantly positive; thus H1 is partially
support. Model 3 also shows that H2 was accepted.

This paper focused on the relationship between core competence

and nancial performance at a shopping mall adjacent to an airport.
Good faith and reliability, customer service orientation, achievement motivation, and innovation and practice, contribution most to
the performance of the shopping center. By contrast, management
acuity, ability of team leader, and policy management, does not
affect performance. Moreover, this study revealed that the younger

Table 3
The empirical results.
Full-sample

Control variable
Gender
Age
Core competence
CC-NM
CC-M
Human capital
Experience (WE)
Pro-skill (PRK)
Work-R-comp (WRC)
Education (EL)
N
R2

Management

Non-management

Financial
performance

Financial
performance

Core competence
for non-management

Financial
performance

Financial
performance

Financial
performance

Financial
performance

Model 1

Model 2

Model 3

Model 1

Model 2

Model 1

Model 2

0.002
0.07

0.133
0.072

0.116
0.000

0.07
0.092

0.055
0.163

0.048
0.248***

0.056
0.258***

0.205***

0.196***

247
8.4%

0.132*
0.044
0.039
0.022
247
10%

0.413***
0.063
0.103**
0.133*
0.229
0.133
247
7.1%

59
16.3%

0.454***
0.066
0.188
0.045
0.053
0.187
59
16.9%

0.197**

187
4.3%

0.168**

0.171**
0.049
0.095
0.083
187
6.3%

Note: The coefcients in the table are standardized regression coefcients and the value in the parentheses of the table is the t-statistic. ***, **, * Denote coefcient estimates
that are reliably signicant at the 1%, 5%, 10% levels, respectively. We performed diagnostics for multicollinearity by examining variable ination factors (VIFs), and a VIF value
greater than 10 represents severe multicollinearity problem (Kutner et al., 2005). The diagnostics show that there is no severe multicollinearity among groups of independent
variables.

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C.-J. Liang et al. / Journal of Air Transport Management 31 (2013) 23e26

the employee, the better the performance of employees. The past

professional skills and work-related competence of employees have
a reverse effect on the performance of the shopping center.
Acknowledgments
This work was supported by the Asia University, Taiwan, ROC
(Grant no. 100-asia-47). The authors would like to thank anonymous reviewers for their helpful comments.
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