Fluent in Change: Top Management Characteristics and Microfoundations of Dynamic Capabilities

Abstract

Strategy scholars have theorized that top managers play a key role in a firm’s dynamic capabilities (Teece, 2012). However, little is understood about how top managers influence the development of dynamic capabilities, and how they perceive their own role in initiating and executing organizational change. This paper uses inductive theory building from case studies to examine these important research questions. Our observations suggest that top managers can influence the development of a firm’s dynamic capabilities by designing and implementing specific processes that serve as their microfoundations. How effectively top managers can design such processes depends on their attitudes and beliefs about change, as well as on the interactions and communications among them. Based on these observations, we develop a process model that links top managers’ characteristics to the micro- and macro-level processes that comprise a firm’s dynamic capabilities.