HOW DO CAPABILITIES EMERGE AND WHY DO SOME FIRMS DEVELOP THEM WHILE OTHERS DO NOT?

Abstract

Using an inductive research logic and in-depth nested case studies, we explore how executives develop capabilities, and in particular, an internationalization capability. Results show that capabilities begin through purposeful path dependence. Capabilities further unfold through mere exposure. Finally, capabilities develop from organizational resilience, where paradoxically change is fueled by stability. Overall, we contribute by revealing how developing a capability stems from the effective interplay among emotion, behavior, and cognition.