Strategic goal interdependence approach to dynamic capability and the effects of customer integration and market dynamism: evidence from China

Abstract

ABSTRACTBased on the theory of cooperation and competition, this study proposed goal interdependence with downstream company as an important enabler of firms’ dynamic capability. Moreover, we examined both how and when cooperative and competitive goals affect dynamic capability by considering customer integration as a mediator and market dynamism as an important contingency. We tested our moderated mediation model by using survey data from a cross-industry sample of 233 firms in China. Results of structural equation analyses suggest that firms and downstream companies that recognize strategic goal interdependence as cooperation rather than competition develop customer integration. With customer integration, firms’ dynamic capability is promoted. Additionally, the moderated mediation analysis revealed that the positive indirect relationship between cooperative goal and dynamic capability with the linkage of customer integration is weaker for higher levels of market dynamism, but the negative indirect effect of competitive goal on the dynamic capability through customer integration does not depend on market dynamism. Based on these findings, we discussed how our findings extend dynamic capability research, the theory of cooperation and competition and provide implications for practice.