Dynamic Capabilities Perspective Research Articles

Operational practices for integrating lean and industry 4.0 – a dynamic capabilities perspective

This article presents the findings of an exploratory survey conducted among 256 experts engaged in German manufacturing firms to explore practices related to integrating Lean with Industry 4.0. Using the Dynamic Capabilities framework as a theoretical lens, the study validates 43 practices organised into six dimensions: ‘initiating’, ‘sensing’, ‘seizing’, ‘transforming’, ‘resources’, and ‘capabilities’. Theoretically, the research contributes by concretising the classical dimensions of Dynamic Capabilities and proposing the novel dimension of ‘initiating’, enhancing the theory's holism and applicability in the context of LM and I4.0 integrations. Managerially, the study provides a practical framework for self-assessment and strategic planning, emphasising the critical importance of early-stage practices related to ‘change’, ‘resources’, ‘capabilities’, and ‘initiating’. These elements are crucial for triggering subsequent integration phases and ensuring successful execution. The framework addresses technology adoption, organisational culture, process optimisation, and workforce engagement, offering comprehensive guidance for integrating LM and I4.0. The contributions of this research hold value for the field of Operations Management as it provides empirical evidence on essential practices for effectively integrating Lean with Industry 4.0. Additionally, the study highlights the significance of Dynamic Capabilities as a means to comprehend and manage the complex interplay between these two approaches.

PLTS/ARAS-based financing risk resilience capability evaluation for fisheries enterprise: A case study of green transformation and upgrading

Clearly delineating the key capabilities of organizational resilience for fisheries enterprises holds significant practical implications, as it can mitigate financing risks and foster the sustainable development of the fisheries industry. Based on the “dynamic capabilities perspective”, this study constructs an analytical framework for the resilience capabilities of fisheries enterprises against financing risk. A hybrid method comprising the probabilistic linguistic term set, the decision-making trial and evaluation laboratory, and the additive ratio assessment is applied to a case study of Homey Group, examining the diverse pathways through which financing risk forms and impacts outcomes. The main findings are: (1) In the comprehensive assessment of the role of resilience capabilities in addressing the “Risk-Seeking-Decline Type” financing risk factors, market diversification and sustainable practices are accorded higher weights surpassing financial resources as the two most value-enhancing resilience capabilities. Enterprises characterized by a “Risk-Seeking-Loss Type” profile tend to assign higher weights to market diversification and technological infrastructure when evaluating financing risk resilience capabilities. (2) Regarding the key capabilities of organizational resilience, Homey Group possesses a weak risk management system for monitoring and evaluating significant risks and implementing control activities. (3) With regards to suggestions for improvement, it is advisable to delegate oversight of the risk identification process to a designated risk committee or specialists in risk management. The conclusions contribute to a deeper understanding of the nature and mechanism of resilience capabilities for fisheries enterprises and provides implications for risk management and sustainable development.

Mitigating the impact of late internationalization of emerging market SMEs: A dynamic capability perspective

ABSTRACT In this study, we investigate the impact of internationalization timing on the export performance of small and medium-sized enterprises (SMEs) in emerging markets. Our theoretical foci are the learning advantage of newness theory and the dynamic capability perspective to focus on how late internationalization can adversely affect export performance. Our findings suggest that the dynamic capabilities and industry experience of the SME Manager can mitigate these adverse effects. The time since initial international entry and an informal approach during export commencement exacerbate them. This conclusion is based on examining a substantial dataset, encompassing 8,278 SMEs from 84 emerging economies, collected over 14 years (2006–2020). This study uncovers novel insights into the intricate dynamics of SME internationalization and its influence on export performance.

Strategising for the circular economy through servitisation

PurposeFrom a firm-centric perspective, this study aims to elaborate on the types of servitisation strategies that can support a firm’s circular ambitions by asking: What is the role of servitisation in narrowing, slowing and/or closing resource loops? And, how are resources and capabilities arranged to provide such strategic circular service offerings?Design/methodology/approachDrawing on the experiences of an international manufacturing company from a dynamic capabilities perspective, the study offers an analytical framework that goes inside the firm’s operationalisation of its service offerings to support circularity in terms of the strategic decisions made. This framework is later used to frame the findings.FindingsThe study highlights the case-specific feedback loops and capabilities needed to support circular transitions. Various resource and innovation strategies for circularity are combined along customer interfaces and in partnership with upstream actors. Yet, open innovation strategies are conditioned by physical distance to provide circular services in remote areas.Research limitations/implicationsThe main contributions are empirical, analytical, conceptual and practical. The servitisation framework for circularity connects prior servitisation-circularity research and provides an analytical tool for framing future studies. The study also expands the definition of open innovation in that closed innovations for circularity can be achieved through “open” information exchange in knowledge networks, as well as provides advice for similar large manufacturing companies.Originality/valueThis study focuses on the strategic choices made by industrial firms for circular service provision and emphasises the environmental benefits from such choices, in addition to the economic and customer benefits covered in extant servitisation research.

Relationship between supply chain disruption orientation and firm’s resilience in China: the dynamic capabilities perspective

ABSTRACT This study attempts to reveal the relationship between supply chain disruption orientation (SCDO) and firm’s resilience in China under the background of the US–China trade war. Furthermore, the paths to build firm’s resilience through resource reconfiguration and organizational learning (OL) are explored with dynamic capabilities theory. We adopt mixed-methods research design, collecting survey data from 220 Chinese manufacturing firms to test the conceptual model with partial least squares structural equation modelling and second-hand data from Dow Jones Factiva to conduct theme analysis. The results show that resource reconfiguration and OL have full mediation effect on the relationship between SCDO and firm’s resilience, respectively.

Energy transition and non-energy firms’ financial performance: Do markets value capability-based energy transition strategies?

Energy transition has become a major challenge that will shape the global agenda in the coming decades. In addition to governments and major energy firms, non-energy firms also play a significant role in the energy transition with their growing share in renewable energy supply and other pro-environmental investments. Using the Resource-based View and Dynamic Capabilities perspectives, we discuss non-energy firms’ capability-based energy transition strategies and explore the channels through which these strategies affect their financial performance. We test our hypotheses using S&P 500 firms’ data and show that capability-based energy transition strategies have had a positive moderating effect on the relationship between the renewable energy sector performance and non-energy firms’ financial performance in the short term. Furthermore, these strategies have had a positive moderating effect on the relationship between fossil fuel prices and non-energy firms’ financial performance in the long term. Our findings indicate that capability-based energy transition strategies created a virtuous investment–return opportunity for non-energy firms between 2009 and 2021.

Conceptualizing Agile Branding: Dimensions and Antecedents for Managing Brands in a Dynamic Environment

Traditional branding approaches take too long to react to today’s dynamic environment. Agile branding offers a promising approach and might be the contemporary answer to the demands of our digitalized world. While scientists state that an agile approach to branding is essential nowadays, there is a lack of knowledge on how agile branding can be conceptualized and applied in practice. This article aims to provide a better understanding of agile branding by identifying its dimensions and antecedents. This study pursued a multi-method approach: a systematic literature review was conducted, followed by qualitative semi-structured interviews with eleven experts and a group discussion with five participants. Applying the dynamic capabilities perspective, the authors identify five dimensions, including 20 antecedents of agile branding: (a) leadership style and culture, (b) employee skills and competencies, (c) technology and methods, (d) stakeholder and feedback integration, and (e) ambidexterity. The critical challenge of agile branding is to balance brand continuity and adaptation. The study is the first to conceptualize agile branding, offering scientists and practitioners values and principles on how brands can be managed and further evolved in a constantly changing world to stay relevant in the market and ahead of the competition.

Resource recombination perspective on open eco‐innovation: Open innovation type, strategic orientation, and green innovation

AbstractThis study aims to investigate the missing links in open eco‐innovation by focusing on the following questions, which existing studies have limited attention in the existing literature: (1) Given the level of breadth and depth of a firm's open eco‐innovation, how can open innovation types be distinguished? (2) In what way does the open innovation type differ in implementing an open eco‐innovation strategy? and (3) How do open innovation strategic differences affect green innovation performance? Drawing upon the knowledge‐based view and dynamic capability perspective, this study provides theoretical grounds for a firm's breadth and depth of an open eco‐innovation strategy. It suggests a 2 2 resource recombination framework to differentiate between four open innovation types for green innovation: Maverick, Best friend, True, and Cherry‐picker. Using data from 2496 manufacturing firms in South Korea, we applied a k‐means cluster analysis to generate four groups and conducted regression analyses to confirm hypotheses. Our findings supported the influence of open innovation type on strategic orientation; however, the effect was not observed in Best Friend. Additionally, ambidextrous strategic orientation significantly influenced green innovation compared to either exploitative or explorative strategic orientations.

Employee-centered Industry 5.0 - Case analysis of Haier

How green digital intelligence and ecology promote enterprises to transform into industry 5.0 has attracted the attention of the industry and academia. Still, its internal driving mechanism at the micro level has not been clarified. Based on the perspective of enterprise dynamic capability and resource allocation, this paper studies the “path-process-capability” logical scheme of Industry 5.0 restructuring value chain. Firstly, the multi-case configuration analysis is carried out through focused stepwise quantitative case analysis to explore the resource collaboration path of Industry 5.0 transformation. Then, the process of digital intelligence and ecological reconstruction of the value chain is studied longitudinally for a single case, and the stage characteristics of green digital intelligence and ecology driving the Industrial 5.0 transformation of manufacturing enterprises are studied by combining the time series interval method and the critical event method. The process mechanism of digital intelligence and Industry 5.0 key capabilities are found. Aimed at the path problem of green digital intelligence and ecological reconstruction of the manufacturing value chain, based on multi-case statistical analysis and single-case in-depth analysis, the reconstruction mechanism and scheme of manufacturing ecological value chain were obtained. The research findings are as follows: firstly, four configuration forms of digital intelligence and ecological resource allocation are identified, and the rational allocation of resources is realized through the collaborative effect of resources. Secondly, the ecological process of green digital intelligence of manufacturing enterprises is based on the process of “standardization - online - integration - intelligence - ecological - Industry 5.0”, and the key technologies of each stage are identified. Third, in the transformation process of Industry 5.0, three key capabilities of enterprise digital production, digital drive, and ecological economy are constructed and data-led to promote the transformation and development of enterprise intelligent services and leverage the new business form of digital ecology.

Top of tide: Nexus between organization agility, digital capability and top management support in SME digital transformation

In the swiftly evolving business landscape, digital transformation (DT) has emerged as a crucial strategy for firms to gain a competitive edge. Despite the abundance of literature on DT in firms, there remains a dearth of empirical research that defines and analyzes crucial antecedents of small and medium-sized enterprises’ (SMEs) DT from an internal perspective. To fill this research gap, this study examines the correlation between organizational agility and digital capability in cultivating SMEs' DT while also evaluating top management support as a moderating variable through the lens of internal factors of SMEs. The results indicate that both organizational agility and digital capability have a positive impact on SMEs' DT, with organizational agility significantly influencing digital capability. Furthermore, the findings highlight that digital capability serves as a mediator between organizational agility and SMEs' DT. In addition, top management support plays a moderating role in these relationships to a certain extent. Additionally, we explicate the concept of digital capabilities from the perspective of dynamic capability. Our study contributes to an enhanced understanding of the effect of organizational agility and digital capability on SMEs' DT, as well as the role of top management support. We provide recommendations for managers to enhance organizational agility and suggest that SMEs should improve their digital thinking to better perceive digital technology changes, enhance digital operation capabilities, and better integrate digital resources.

Post-entry internationalization of born globals: The role of dynamic capabilities in accelerating growth

Academics and policymakers worldwide recognize the importance of born globals (BGs) and actively promote rapid internationalization. Despite this, our knowledge of the post-entry behavior of BGs is limited. We address this problem by investigating the dynamic capabilities that accelerate the post-entry international growth of BGs. Drawing on in-depth interviews with Chinese BG managers, this study reveals the dynamic capabilities that substantiate three key dimensions of international growth: spread, diversification, and sales intensity. Furthermore, we disclose the managerial and organizational capabilities that underpin the sensing and seizing of international opportunities as well as the reconfiguration of the resource base. We contribute to the BG literature and the dynamic capabilities perspective.

The impact of digital technology deployment on mitigating supply chain disruptions: Evidence from Chinese automotive manufacturers during the COVID-19 crisis

Digital supply chain management provided opportunities to mitigate the effects of supply chain disruptions on business activities. Unfortunately, the real-life impacts of digital technology deployment in mitigating supply chain disruptions and enhancing resilience have not been fully evaluated, and it is unclear which digital technology deployment strategy had the greatest effect on firms' operations. This research seeks to fill this gap using data from the annual reports of 123 Chinese automotive manufacturers during the COVID-19 crisis. We focus on two dimensions of digital technology deployment: amount and category. Metrics describing financial and operational performance are used to estimate firms' overall performance. Additionally, this research presents econometric models to assess the effects of digital technology deployment from the two aforementioned dimensions. We found that the deployment of digital technology assets could mitigate negative effects on firms' performance during COVID-19 crisis, albeit with a time lag. Different categories of digital technology deployment, however, had different effects on firms' financial and operational performance. Digital front-end technologies were more efficient in improving the financial performance of the automotive firms. Meanwhile, digital base technologies were more impactful on the firms’ operational performance. This research contributes to the body of research on digital SCM and supply chain risk management by examining the effect of digital technologies from a dynamic capability perspective.

Social media and sustainable innovation in manufacturing firms: a dynamic capability perspective

PurposeWith social media usage growing rapidly in business sustainability in manufacturing sectors, the means through which manufacturing firms can incorporate it into the pursuit of environmental sustainability are largely under-researched by academics. Drawing upon the dynamic capability view, this study examines the indirect relationship between social media usage and sustainable innovation in manufacturing sectors.Design/methodology/approachThe study was based on analyzing data collected through a questionnaire survey on Chinese manufacturing firms. Partial least squares structural equation modeling was applied to test the hypotheses.FindingsThe results show that social media usage has a positive effect on sustainable innovation in the manufacturing sectors. Firms' sustainable dynamic capability mediates the relationship between social media usage and sustainable innovation. In addition, the effects of social media usage on firms' sustainable dynamic capability are stronger when stakeholder pressure is stronger and top management team commitment is higher.Originality/valueThis study highlights social media application as an important, yet underexplored, factor in sustainable innovation of manufacturing firms. The findings also untangle the mechanism of sustainable dynamic capability by which social media usage improves sustainable innovation for manufacturing firms.

Old and new: a dynamic capabilities perspective of learning and unlearning

ABSTRACT In this study, we explore innovation processes of innovation-efficient and innovation-inefficient firms. In particular, we investigate how learning and unlearning unfold from the perspective of dynamic capabilities. We employ a case study research approach to analyse learning and unlearning patterns in 24 firms, divided into innovation-efficient and innovation-inefficient firms. We find two different sets of patterns that distinguish innovation-efficient from innovation-inefficient firms. Our results reveal that innovation-efficient companies can quickly shift between learning and unlearning to dynamically orchestrate resources to deal with changes in the environment. In this sense, learning and unlearning are sources of dynamic capabilities, while their interplay is what makes capabilities actually dynamic. Furthermore, we provide implications for practitioners on how to navigate through innovation projects and design innovation management concepts more efficiently.

Moderating effect of dynamic capabilities on the relationship between lean practices and operational performance

PurposeThe view that dynamic capabilities theory can help explain how lean organizations improve has been put forward by scholars. However, there is still a lack of research on the matching relationship between the application of lean practice and the internal elements of enterprise organization from the perspective of dynamic capabilities. The purpose of this study is to validate the moderating effect of dynamic capabilities on the relationship between lean practices and operational performance.Design/methodology/approachThis study used the method of survey and empirical research to collect sample data from 263 enterprises in China. Through literature review, this study put forward the moderating hypotheses around dynamic capabilities, lean practices and operation performance and used the method of regression analysis to validate these hypotheses.FindingsThe results showed that dynamic capabilities have a partially moderating effect on the application of lean practices. Specifically, dynamic capabilities have a significant moderating effect on the relationship between just-in-time, total quality management, total preventive maintenance and operational performance, while dynamic capabilities have no significant moderating effect on the relationship between human resource management and operational performance.Originality/valueThe research conclusion complements and enriches the lean practices literature from the perspective of dynamic capabilities. Existing studies mainly focus on the moderating role of external environmental factors, while there is a lack of empirical research on the role of dynamic capabilities in lean practices literature. The research results will help enterprises further understand the matching relationship between lean practices and dynamic capabilities and then improve the success of lean practices application.

The interplay of institutional pressures, digitalization capability, environmental, social, and governance strategy, and triple bottom line performance: A moderated mediation model

AbstractThis study seeks to elucidate the mediating role of environmental, social, and governance strategy (ESGS) in bridging the nexus between institutional pressures—specifically regulatory and stakeholder influences—and triple bottom line performance (TBLP), which encompasses economic, social, and environmental facets. Concurrently, this study examines the extent to which digitalization capability influences these dynamics. Utilizing a dataset from subsidiaries within China's retail and transportation sectors, we employed structural equation modeling alongside regression analysis to validate our hypotheses. The findings corroborate a partial mediating effect of ESGS on the TBLP in response to institutional pressures while highlighting digitalization capabilities' moderated mediation role in strengthening the relationship between institutional pressures and TBL through ESGS implementation. By weaving together institutional theory and dynamic capability perspectives, this study advances the understanding of strategic avenues that influence TBLP through ESGS and offers managerial insights for effectively leveraging ESG strategies.

The impact of ICT capabilities on supply chain fraud and sustainability – a dynamic capability perspective

PurposeThis study aims to investigate the influence of information and communication technology (ICT) capabilities on supply chain fraud and sustainability within the context of Ghana’s small and medium-sized enterprises (SMEs). Additionally, the research explores the mediating role of supply chain fraud in the relationship between ICT capabilities and supply chain sustainability.Design/methodology/approachData were collected from 102 respondents within Ghana’s SME sector, and the research employed the dynamic capability theory as the conceptual framework. The study utilized partial least squares-structural equation modeling (PLS-SEM) to develop and analyze the proposed model.FindingsThe results of the study reveal a significant reduction in supply chain fraud attributable to enhanced ICT capabilities within Ghanaian SMEs. Moreover, ICT capabilities exert a significant positive influence on supply chain sustainability. Importantly, supply chain fraud emerges as a mediator, elucidating its role at the nexus of supply chain sustainability and ICT capabilities.Originality/valueThis research contributes to the limited body of evidence on the interconnectedness of ICT capabilities, supply chain fraud and supply chain sustainability, particularly within the context of Ghanaian SMEs. Notably, this study pioneers an examination of the mediating impact of supply chain fraud on the relationship between ICT capabilities and supply chain sustainability.

Can government subsidies facilitate TFP growth? From the perspective of dynamic capability

Can government subsidies facilitate TFP growth? From the perspective of dynamic capability

Green supplier development and sustainable supply chain management

AbstractThe rapid rise in demand for sustainably produced goods over the last decade has made integrating environmental sustainability practices into the supply chain a strategic capability for many businesses. Despite the rapid growth of green supply chain management research, scholars have not fully examined supplier development in the context of the adoption of environmentally sustainable practices. Our study aimed to investigate the relationship between green supplier development strategies and supplier adoption of natural resource‐based view (NRBV) strategies, as well as their impact on green supply chain management (GSCM) practices. We make a significant contribution in this field by integrating a natural‐resource‐based view and a dynamic capabilities perspective to investigate how firms in developing economies overcome the environmental sustainability capability deficiencies of small and medium‐sized enterprises and are able to develop and implement environmentally sustainable practices. Based on a survey of 167 manufacturing companies in Kenya, the findings reveal that focal firms' indirect environmental sustainability supplier development strategies significantly impact environmental sustainability practices among suppliers and that the focal firm‐supplier dyadic relational capabilities significantly affected suppliers' implementation of environmental sustainability practices. Furthermore, focal firms' resource investment (financial and capital) in environmentally sustainable supply chain management programs to develop suppliers has a significant impact on suppliers' implementation of environmental sustainability practices.

Unpacking the effects of performance feedback on strategic change: the moderating role of industry conditions

PurposeThis paper aims to integrate insights from the behavioral theory of the firm and the dynamic capabilities perspective to explain how the historical and social attainment discrepancies motivate firms to change. Specifically, this paper proposes that a negative historical attainment discrepancy encourages the firm to engage in strategic change to solve its performance problems. In contrast, this paper advanced that a positive social attainment discrepancy motivates strategic change as a mechanism to bolster the firm’s position within the industry. Further, this paper integrated the moderating effects of industry dynamism and industry munificence.Design/methodology/approachThis paper tests hypotheses using panel data on 2,435 US public firms over the years from 1996 to 2018. This paper uses a fixed-effects regression model to empirically test these hypotheses.FindingsThis paper finds empirical support for the effects of both the negative historical attainment discrepancy and the positive social attainment discrepancy on the firm’s tendency to engage in strategic change. As for the hypothesized moderating effects, this paper finds that industry munificence accentuated the effects of both attainment discrepancies on the firm’s tendency to engage in strategic change. However, the results do not support the hypothesized moderating effect of industry dynamism on either of these attainment discrepancies.Originality/valueThis paper contributes to the research on the separate effects of historical and social comparisons within the context of strategic change. Further, the paper bolsters our understanding of how performance feedback increases the firm’s tendency to change. Finally, the paper integrates theoretical views from the behavioral theory of the firm and the dynamic capabilities perspective on how socially high-performing firms may build and sustain their competitive advantage through organizational change.