Abstract
This article analyses how dynamic capabilities are enacted in micro-enterprises and what role different parties and managerial time allocation play in this enactment. Drawing upon three in-depth case studies of micro-enterprises, we make three theoretical contributions. First, after arguing that micro-enterprises are likely to enact individual- or group-level dynamic managerial capabilities rather than organisation-level dynamic capabilities, we counter Teece’s warnings about the vulnerable nature of dynamic managerial capabilities. Second, we identify that how managers allocate their own time, is a core micro-foundation of dynamic managerial capabilities; we illustrate that failure to allocate time to capability enactment can lead to capability vulnerability. Finally, we introduce the notion of ‘self-damaging dynamic managerial capabilities’ – these being capabilities that damage established micro-foundations.
Highlights
Dynamic capabilities are ‘the capacity of an organization to purposefully create, extend, or modify its resource base’ (Helfat et al, 2007: 4)
We contribute to contemporary debates about the enactment and micro-foundations of dynamic capabilities by critically evaluating, ‘How are dynamic capabilities enacted in microenterprises and what role do different parties and managerial time allocation play in this enactment?’
This article has presented the results of in-depth qualitative research to investigate ‘How are dynamic capabilities enacted in micro-enterprises and what role do different parties and managerial time allocation play in this enactment?’ We assessed the degree to which the concept fits the micro-enterprise context, unpacked the micro-foundations of dynamic managerial capabilities, and provided insights into the stability and vulnerability of these capabilities in micro-enterprises
Summary
Dynamic capabilities are ‘the capacity of an organization to purposefully create, extend, or modify its resource base’ (Helfat et al, 2007: 4) As they can be a source of performance improvement (Helfat et al, 2007), they are strategically valuable for enterprises that enact them successfully. We focus on the micro-foundational role of different parties who enact dynamic capabilities and managerial time allocation. This is because, as we argue below, these factors are salient to micro-enterprises, are helpful for assessing the applicability of the concept to the micro-enterprise context and offer the opportunity to extend theoretical understanding of dynamic capabilities
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