Dynamic Capabilities Research Research Articles

The Architecture of Dynamic Capability Research: Identifying the Building Blocks of a Configurational Approach

The dynamic capability view (DCV) of the firm has become one of the leading frameworks aimed at identifying drivers of long-term firm survival and growth. Yet, despite considerable academic interest, there are many questions about what dynamic capabilities are, how they relate to other organizational operations, and how they relate to firm performance. In this art, we provide a unique and comprehensive examination of the DCV literature that goes beyond past reviews by combining text based analysis with surveys of, and interviews with, researchers in the field. With this approach, we are able to examine the evolution of the DCV in written literature and identify missing research themes. Based on this review, we argue that future research will benefit from integrating the DCV with configuration theory and recent microfoundational thinking. We encapsulate this discussion via an architectural model of the DCV (entitled 'House of Dynamic Capabilities') that combines microfoundations underlying DCs at the varying levels of analysis (individual, business unit, and organizational) while also accounting for important enablers of DCs and firm strategic orientation. We also show how this logic requires a completely different set of methodological approaches to those currently in use.

The Architecture of Dynamic Capability Research Identifying the Building Blocks of a Configurational Approach

AbstractThe dynamic capability view (DCV) of the firm has become one of the leading frameworks aimed at identifying drivers of long-term firm survival and growth. Yet, despite considerable academic interest, there are many questions about what dynamic capabilities (DCs) are, how they relate to other organizational operations, and how they relate to firm performance. In this article, we provide a unique and comprehensive examination of the DCV literature that goes beyond past reviews by combining text-based analysis with surveys of, and interviews with, researchers in the field. With this approach, we are able to examine the evolution of the DCV in written literature and identify missing research themes. Based on this review, we argue that future research will benefit from integrating the DCV with configuration theory and the recent micro foundational thinking. We encapsulate this discussion via an architectural model of the DCV (entitled “House of Dynamic Capabilities”) that combines micro foundations und...

A Normative Theory of Dynamic Capabilities: Connecting Strategy, Know-How, and Competition

The field of strategy has mounted an enormous effort to understand, define, predict, and measure how organizational capabilities shape competitive advantage. While the notion that capabilities influence strategy dates back to the work of Andrews (1971), attempts to formalize a “capabilities based” approach to strategy only began to take shape in the past twenty years. In particular, the publication of Teece and Pisano (1994) and Teece, Pisano, and Shuen (1997) work on “dynamic capabilities” triggered a flood of debate and discussion on the topic. Because strategy is a normative field, its theories must be evaluated in terms of how well they inform and impact practice. Judging by this standard, the dynamic research capabilities research program has come up short. It has become mired in endless debates about definitions and has engaged obsessively in an elusive search for properties that make organizations adaptable. In this paper, I argue that the research program on dynamic capabilities needs to be reset around the fundamental strategic problem facing firms: how to identify and select capabilities that lead to competitive advantage. I frame the firm’s capability strategy problem as one of choosing among different types of capability enhancing investments, ranging from general-purpose know-how to application-specific know-how. The framework also draws a distinction between investments designed to deepen the firm’s existing base of capabilities and those designed to broaden its repertoire into new realms. I explore the applicability of this framework to three general types of competitive circumstances: stable product market competition, Schumpeterian entry, and Penrosian dynamics. A major goal of the paper is to identify important gaps in our theoretical and empirical knowledge that should be a focus for future scholarly research.

Rethinking dynamic capabilities from a creative action perspective

Dynamic capabilities research aims to explain how firms manage to change in order to sustain their competitive advantage. Yet, despite considerable progress, dynamic capabilities theorizing struggles to capture novelty, which lies at the heart of change. We argue that this is caused by inherent limitations of the ways in which human action has been conceptualized: dynamic capabilities theorizing to date is based on rational or normative notions of actions, neither of which account for novelty in action. Hence, we propose that to overcome this impasse dynamic capabilities research needs to incorporate a concept of creative action into its theoretical apparatus. We elaborate on the positioning of creative action relative to existing dynamic capabilities theorizing and outline its implications for future dynamic capabilities research.

How CEO experience, personality, and network affect firms' dynamic capabilities

As the organizational influence of CEOs is particularly critical in changing environments, we investigate the impact of their experience, personality, and network on dynamic capabilities. In particular, we analyze the direct effects of CEOs' human capital and core self-evaluation on DCs, and in this context specifically on marketing, R&D, and production capabilities. Furthermore, we examine the direct effect of social capital on dynamic capabilities. Based on data provided by 295 CEOs, we empirically analyze linear and non-linear relationships. Our results reveal an inverted U-shaped relationship between CEO age and dynamic capabilities, and a positive impact of CEO tenure, core self-evaluation, and solidarity on dynamic capabilities. Our overall contribution is the identification and proof of meaningful new relationships among existing as well as new variables of upper echelon and dynamic capabilities research.

Opening Dynamic Managerial Capabilities

Dynamic managerial capabilities have emerged as a promising construct to bridge different orientations in dynamic capabilities research and to better understand the microfoundations of dynamic capa...

Knowledge Transfer in Firms under the Promotion of Dynamic Capability Research

This paper aims at regarding knowledge transfer as the basis of improving firm performance in knowledge economy society, and analyzing the effects of knowledge transfer on firm performance from the perspective of dynamic capability. Thus, this paper gives firm some suggestions to achieve knowledge transfer and the update of knowledge system through integrating internal and external resources, and to build the core competitiveness and even improve its firm performance.

The Organizational Drivetrain: A Road To Integration of Dynamic Capabilities Research

Although the research domain of dynamic capabilities has become one of the most active in strategic management, critics have charged that it is plagued by confusion around the construct itself. In this paper, we uncover a potential reason for this confusion embedded in the unique nature of the construct's development path—a peculiarity that has led to split understandings of what constitutes a dynamic capability. We suggest a solution to this problem in the form of an illustrative metaphor—what we call the “organizational drivetrain.” Our drivetrain represents a theoretical model aimed at combining different views of the definition of dynamic capabilities by explaining how routines and simple rules interact. This shows that it is possible to advance the development of the framework by combining divergent understandings into a coherent whole. We conclude by offering specific recommendations for how to achieve a greater unity of understanding and move the field even further forward.

Operationalization in dynamic capabilities research: Review and recommendations for future research

We systematically review quantitative empirical research on dynamic capabilities in order to identify their common operationalizations, and to assess the extent to which they align with the theoretical essence of the construct. Our review includes 50 articles published between 1997 and 2012, which represent 96 distinct operationalizations of different types of dynamic capabilities. Each of these instances is analyzed as to the variables and types of data employed when studying the construct. We find that five types of operationalizations have been used: (1) managers’ evaluations, (2) financial data, (3) competitive actions or strategies, (4) experience- or performance-based measures, and (5) individuals’ characteristics, achievements or actions. In order to better align with the theoretical essence of dynamic capabilities, we recommend that in future studies (1) researchers should explicate the ordinary capabilities that they hypothesize dynamic capabilities to change, (2) they should give dynamic capabil...

Technology Portfolio Dynamics

Innovations are significant source of competitive advantage for firms. They are also a major source of dynamics that forces firms to adapt their capabilities to sustain competitiveness. In this study we analyzed how firms manage their technological portfolio in mobile phone industry. Our first finding is that firms have focused differently their technology portfolios. Then we identified that most firms change their technology portfolio over time. And finally we conclude that firms in mobile phone industry have different levels of dynamics where some firms change their technology portfolio faster than others. This research identifies new challenges in dynamic capabilities research related to the appropriate level of dynamics in technology management. This information is crucial in practice in order to correctly manage the firm’s dynamic processes.

Antecedents and Outcomes of Dynamic Capabilities: The Effect of Structure

In the time of globalization and constantly increasing velocity, firms face new challenges. One way for firms to address these challenges is dynamic capabilities. This stream of research has made important advances since the seminal paper of Teece, Pisano and Shuen (1997) over the last fifteen years. The paper examines these advances investigating the most influential articles of both conceptual and empirical nature. At the core of this study is the analysis of how organizational structure affects dynamic capabilities. Organizational structure is an important but underplayed area within the literature of dynamic capabilities. Contradictory claims, found in literature sources, concerning the effect of organizational structure on dynamic capabilities are noted in this article. The origins for the opposing findings are explored. This analysis is used to highlight fundamental deficits of the stream of dynamic capability research. Future research directions that could contribute to resolving the identified drawbacks are suggested. DOI: http://dx.doi.org/10.5755/j01.ss.81.3.5790

Responsible downsizing strategy as a panacea to firm performance: the role of dynamic capabilities

Purpose– A subject of continuous debate in the field of organizational change research and management practices is on whether downsizing strategies result in improved firm performance. The purpose of this paper is to propose and empirically examine dynamic firm capabilities as a major missing mechanism of firm performance.Design/methodology/approach– This study uses the data of 154 Taiwanese firms that employed an organizational downsizing strategy as the sample for testing the research question.Findings– The results indicate that a responsible downsizing strategy can result in greater firm performance for the development and enhancement of dynamic firm capabilities.Originality value– This research introduces dynamic capabilities into the downsizing context, and the empirical results provide new theoretical insight into downsizing and dynamic capabilities research, suggesting that downsizing should be regarded by management as resource management rather than a cost-cutting action.

Methodological issues in dynamic capabilities research – a critical review

Purpose – Since ensuring methodological rigour is a prerequisite for high quality empirical research, this study aims to examine methodological choices in empirical studies on dynamic capabilities (DC), and analyses how well they accommodate the complexity of the concept.Design/methodology/approach – The paper is a systematic review of 142 published peer reviewed journal articles on DC.Findings – Although DC research comprises a balanced mix of qualitative and quantitative studies, there are many problem areas in terms of research methods. First, the use of past performance data against current status of DC must be addressed. Second, as DC deals with change, caution needs to be exercised in the use of cross‐sectional data. Third, the essence of DC should not be lost in operationalization, and the research setting needs to be meaningful from the DC perspective. Finally, DC scholars must devote more attention to proper reporting of the research process and justification of the choices made.Research limitati...

Microfoundations of an Organizational Sensing Capability: A Literature Review and a Conceptual Framework

In this article, I develop the Dynamic Capabilities View (DCV) by reviewing and analyzing literature that speaks to a key component sub-capability: Organizational sensing. Building upon existing DCV literature, I define organizational sensing as an information-processing capacity that allows organizations to scan, create, interpret, and learn; I then offer a reconceptualization of the organizational sensing construct, and derive a resultant framework from existent empirical research. The framework offered in this article contributes towards theoretical development of the dynamic capabilities research stream by identifying key microfoundations of organizational sensing. I also discuss options and possibilities for further theoretical development of microfoundations of organizational sensing by drawing on existing organizational science research.

Organization Architecture and Dynamic Capabilities: Network Microfoundations of Competitive Advantages in Dynamic Markets

This paper contributes to dynamic capabilities research by investigating how features of organization architecture provide a basis for superior firm performance and sustainable competitive advantage in dynamic markets. Using a simple model of organization architecture composed of networked employees with distinctive knowledge and dynamic markets composed of a flow of heterogeneous opportunities, I explore how knowledge mobilization mechanisms leveraging network ties – transfer, collaboration, and recombination – underlie dynamic capabilities. Prior theory predicts that the performance of these substitute network mechanisms increases with market dynamism, but produces unsustainable advantages under imitative conditions. By contrast, I find different performance effects of unpredictability and complexity, and a complementary impact of using transfer and recombination mechanisms together that can generate sustainable advantages, suggesting design conditions for dynamic capabilities.

Building knowledge: developing a knowledge‐based dynamic capabilities typology

PurposeThe purpose of this paper is to synthesize existing knowledge‐based dynamic capabilities research into a single typology for managerial and academic use.Design/methodology/approachBased on the resource‐based and knowledge‐based views, this study conducts a theoretically grounded typology development exercise based on an extensive review of the existing dynamic capabilities literature.FindingsThe paper identifies seven frameworks presented in the literature that showed some consistency in underlying concepts but conflict in nomenclature and application. Identifying over 80 uses of knowledge‐based dynamic capabilities in the literature review, three complementary dimensions that are common amongst the frameworks are identified and integrated into a consistent typology of eight knowledge‐based dynamic capabilities to encompass the extant literature.Originality/valueAddressing fragmentation in the knowledge‐based dynamic capabilities discourse, the paper advances the concept of knowledge‐based dynamic capabilities by organizing the existing literature and frameworks into a comprehensive and consistent typology. Moreover, this integrative typology allows managers and researchers to identify those capabilities in use and the commonalities between them. Finally, the paper identifies a new knowledge‐based dynamic capability that has not yet been identified in any existing framework.

Organization Architecture and Dynamic Capabilities: Network Microfoundations in Dynamic Markets

This paper contributes to dynamic capabilities research by investigating how features of organization architecture provide a basis for superior firm performance and sustainable competitive advantag...

The Architecture of Dynamic Capability Research: A Scientometric Investigation

Over the last 15 years the dynamic capability view of firm strategy, with its emphasis on those capabilities that allow a firm to react to and accommodate changing market and organizational environ...

Treating the Malaise of Dynamic Capability Research: Rejuvenation via Deployment-Based Articulation

Despite recent strides toward identifying processes inherent in dynamic capability, researchers have not addressed how these processes are deployed. This has stifled progress in the field. Adopting a multi-disciplinary approach, we draw from three research streams (strategic management, organizational economics, and organizational change) and use an architectural lens to offer an alternate articulation that addresses the gap in the literature. We then illustrate how our deployment framework complements existing process-based conceptualizations and offer an agenda for future research. We believe that our conceptualization will help address the malaise of dynamic capability research by providing new research opportunities for scholars.

Dynamic capabilities deconstructed : a bibliographic investigation into the origins, development, and future directions of the research domain

This article uses co-citation analysis to explore the structure of the Dynamic Capabilities research domain, to better understand its origins, current state of development, and future directions. Co-citation analysis reveals the field's 'invisible colleges' and research directions. We find evidence of commonalities as well as polarizing differences among understandings across this research domain, suggesting opportunities and challenges for future research. Copyright 2010 The Author 2010. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.