Capability development with process maturity models – Decision framework and economic analysis

Abstract

Despite the need for sustaining competitive advantage, scholars and practitioners struggle when deciding which organizational capabilities they should develop to what extent. Today, inconsistent recommendations bear the risk of misallocating corporate funds. Despite recent advances, further research needs to be conducted with respect to how uncertainty can be considered in capability development decisions and whether the cutting of capabilities is a feasible option. Against this background, we propose a conceptual framework for structuring capability development decisions. Due to the close relationship between capability development and business process management, the framework builds on process maturity models and the principles of value-based business process management. We also conduct an economic analysis to disclose general relationships that govern capability development based on process maturity models.