Leveraging Collective Mindfulness in Dynamic Environments: Managing Performance in Sub-units

Abstract

The dynamic capabilities perspective highlights that higher order capabilities enable organizations to adapt and evolve by sensing changes in the business environment and reorganizing their resources and capabilities accordingly. Yet research has not clearly explained how dynamic capabilities emerge and develop. We build upon the sparse literature that indicates that collective mindfulness may facilitate the creation of dynamic capabilities, and empirically test how collective mindfulness affects sensing and reconfiguring capabilities, and performance in organizational sub-units. We collect data using an online survey from one of the largest housing finance organizations in India (n= 1450), and analyze it using multilevel structural equation modelling. We find that dynamic capabilities, particularly sensing capabilities, mediate the relationship between sub-unit mindfulness and sub-unit performance. Drawing from the attention-based view of the firm, our study contributes by strengthening the theoretical linkages between collective mindfulness and dynamic capabilities, and by offering recommendations for practice.