Dynamic capability, knowledge, learning, and firm performance

Abstract

PurposeThis paper seeks to apply the dynamic capability framework to explore why store managers within the same chain of restaurants perform differently. Specifically, this paper argues that knowledge resources and learning mechanisms are critical to the development of dynamic capabilities.Design/methodology/approachThe approach takes the form of an empirical data analysis. Hypotheses are tested on 132 store managers in a leading fast‐food restaurant chain in Taiwan.FindingsThe findings indicate that dynamic capabilities increase store performance, and that both knowledge resources and learning mechanisms have a positive effect on dynamic capabilities. In addition, the effect of knowledge resources on dynamic capabilities is partially mediated by the type of learning mechanism.Practical implicationsStore managers must be able to develop dynamic capabilities if they are to deal with the rapidly changing environment they are facing. Knowledge resources and learning mechanisms both improve the development of dynamic capabilities.Originality/valueThis paper conceptualizes and empirically tests the relationships between knowledge resources, learning mechanisms, dynamic capabilities, and performance in the restaurants of a fast‐food chain. In addition, this paper investigates how dynamic capabilities work from a process perceptive by examining the mediation effect of the learning mechanisms.