DYNAMIC CAPABILITIES AND BUSINESS MODEL INNOVATION: A STUDY FOR SCALE DEVELOPMENT

Abstract

Based on dynamic capability theory, this paper presents a reconceptualization of the dynamic capabilities (DC) construct within a multi-layer-structure in the context of business model innovation (BMI). A rigorous multi-stage scale development process is employed. We developed candidate DC scale items based on the literature review study and reviewed them with the participation of 5 field experts. Final DC scale items have been surveyed with 121 respondents across a wide range of small and medium scale enterprises engaging in BMI. The preliminary results of exploratory and confirmatory factor analyses highlight the multi-layer nature of dynamic capabilities construct for small and medium enterprises (SME’s) engaging in BMI in a developing country environment. Four subdimensions were clearly identified among Sensing Seizing and Reconfiguration dimensions across Owner_Manager and Employee layers: Owner_Manager_Sensing,Owner_Manager_ Seizing and Owner_Manager_Reconfiguration, Employee_Sensing_Seizing. Furthermore, Clauss’ (2017) BMI scale has been translated into local language (Turkish), validated and checked for reliability following a stepwise process. Factor analysis results paralleled the original scale. This offers a deeper and multi-layered tool for measuring subdimensions of both DC’s and BMI beyond the limitations in the prior research.