Management Capability and the Paradox of the Organized Firm

Abstract

Management Capability and the Paradox of the Organized Firm Nathália Pufal, Paulo Antônio Zawislak, André Cherubini Alves, Jorge Tello-Gamarra Abstract A company is an existing technological set of products and process transformed by internal and external business activities. From that point of view, a company is the result of four essential capabilities: technology development, operations, management and transactions. In order to succeed, any business company must find its capabilities’ right balance by coordinating its business activities to become an efficient economic agent or simply an organized firm. However, in the real world, firms face a continuous paradox that challenges its very organization and perpetuity. Why is it so difficult to find the capabilities’ right balance? On what kind of effort should the coordination structure of any existing firm rely? This paper focuses on the role of management capability as a key factor to the firm in fine-tuning the organization. A multiple case-study was conducted in 30 Brazilian firms from different industrial sectors. These firms were classified according to their management types into (1) family, (2) family-professional and (3) professional. The results show that in the three types of the firms, management capability varies according corporate strategy, resource allocation, coordination and integration, norms and procedures. Management capability’s scope goes beyond the simple planning and controlling, its key role is to cope with the paradox of stability and change in order to allow innovation to flourish. Full Text: PDF DOI: 10.15640/smq.v2n3-4a3