Dynamic Capabilities Theory Research Articles

The influence of strategic competitive response capability on the performance of commercial organizations in Kenya listed in Nairobi securities exchange

Strategic competitive response has been identified as effective factor that harnesses a business ability to utilize all its skills, capabilities and resources in order to gain competitive advantage and thus survive and increase its value over time. It focuses on the organization's assets, resources and market position, projecting how well it will be able to employ strategies in the future. This study sought to explore the influence of strategic competitive response capability deployment on performance of listed organizations in Nairobi securities exchange. There is a dearth of studies empirically investigating the relationship between interaction of strategic competitive response capability deployment and organizational performance. This gap in knowledge is exacerbated by multiple definitions, ambiguity of constructs, contradicting views and little grounding of the theory in empirical observation. The objective was to determine the influence of strategic response capability performance. The study employed two theories to explain the interaction of strategic competitive response action and organizational performance, the theories were resource-based view and dynamic capabilities theory. A cross sectional research design was employed with the focus set on the operations of corporations listed in Nairobi securities exchange. A census survey of 67 firms was conducted. The results show that strategic competitive response has a positive statistically significant relationship with performance (β=0.600, p=.000). The results have also shown that strategic competitive response was positively correlated to organizational performance at 99% confidence level (r=6.45, p=0.000).This study concludes that strategic competitive response capability significantly influences organizational performance positively. The findings of this study would help firms listed in the Nairobi Securities Exchange identify critical factors and design sustainable strategies to improve their strategic competitive response capability through strategic planning and ensuring that they are up to date with modern trends in technology and other information related to their industry.

Building tourism SMEs' business resilience through adaptive capability, supply chain collaboration and strategic human resource

AbstractSmall‐ and medium‐sized enterprises (SMEs) play a significant role in the global economy, particularly, in tourism and hospitality. However, they face challenges due to their vulnerability to external disruptions. A research model was proposed to enhance SME resilience in tourism through supply chain collaboration, strategic human resource and adaptive capability. Drawing on Dynamic Capability Theory, a total of seven hypotheses were presented. The data collection were conducted in Malaysia. There were 210 SME owners/managers participated in the survey. Data were analysed using Smart PLS software version 4. Results suggest that addressing business collaboration and human resource development are critical factors in developing capabilities that foster business resilience in tourism SMEs. The study addresses the dearth of theoretical and practical research on tourism SMEs. While calling SMEs for more attention to developing resilient businesses, this study serves as insights for disaster planning to withstand potential future shocks.

Hotel chains and sustainable development: degree of internationalization, SDGs and dynamic capabilities as drivers of successful performance

AbstractNowadays, many researchers are concerned with the study of sustainable business practice and its drivers and business outcomes. In a global and dynamic environment, such as the tourism sector, it is necessary to pay attention to management strategies to maintain a sustainable competitive advantage. In this paper, we focus on the study of hotel chains with different degrees of internationalization and how SDG engagement can serve as an engine to develop dynamic capabilities to improve their business performance. Based on Stakeholders and Dynamic Capabilities theories, we propose a research model. Next, using a variance-based structural equation modelling approach, we corroborate that more internationalized hotel chains are more involved with the SDGs, enabling them to improve business performance and to better adapt to the turbulent environment. Thus, as long as the higher degree of internationalization implies greater awareness and a greater deployment of dynamic capabilities, the performance of hotel chains will increase. These findings allow us to draw important managerial implications and provide a theoretical framework as a reference for scholars in the sustainable management field.

Procurement Outsourcing Strategies and Organizational Agility: A Comparative Analysis of Pharmaceutical Companies in Brazil

Purpose: The aim of the study was to analyze the procurement outsourcing strategies and organizational agility: a comparative analysis of pharmaceutical companies in Brazil. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study on procurement outsourcing and organizational agility in Brazilian pharmaceutical firms found that comprehensive outsourcing boosted agility through external expertise, streamlining processes and improving cost-effectiveness. In contrast, reliance on in-house procurement posed challenges to adaptability and competitiveness. Strategic procurement outsourcing emerged as vital for enhancing organizational agility in Brazil's pharmaceutical industry. Unique Contribution to Theory, Practice and Policy: Resource-Based View (RBV), transaction cost economics (TCE) & dynamic capability theory may be used to anchor future studies on analyze procurement outsourcing strategies and organizational agility: a comparative analysis of pharmaceutical companies in Brazil. Pharmaceutical companies in Brazil should develop customized procurement strategies that align with their unique internal resources, capabilities, and strategic objectives. Policymakers should encourage collaboration between pharmaceutical companies and outsourcing partners by providing regulatory support and incentives.

Impact of Digital Transformation on Firm Performance: A Comparative Study of Germany

Purpose: The aim of the study was to analyze the impact of digital transformation on firm performance: a comparative study of Germany. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The comparative study on digital transformation's impact on firm performance in Germany reveals that embracing digitalization leads to improved productivity, efficiency, and innovation. It also emphasizes how digital technologies enhance market competitiveness, expand customer reach, and drive revenue growth and profitability. Strategic planning and organizational adaptability are crucial for firms to maximize the benefits of digital transformation. Overall, the findings underscore the transformative potential of digitalization for German firms, necessitating proactive adoption and continuous adaptation to remain competitive. Unique Contribution to Theory, Practice and Policy: Resource-based view (RBV), institutional theory & dynamic capabilities theory may be used to anchor future studies on analyze the impact of digital transformation on firm performance: a comparative study of Germany. Firms should focus on enhancing employee digital literacy, establishing cross-functional teams, and embracing a customer-centric mindset to drive innovation and growth in the digital age. Policymakers play a crucial role in creating an enabling environment for digital innovation and entrepreneurship.

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.

Knowledge spectrum explored: Understanding source-recipient interactions and their influence on technology convergence

In a rapidly evolving technological landscape, firms are strategically diversifying into multiple tech sectors, blurring traditional industry lines through ‘industry convergence’. To comprehend the inception of technology convergence from the roots of knowledge, this study bridges knowledge flow framework with the dynamic capabilities theory, considering the dual roles of firms in knowledge flow and whether they engage in pioneering or follower-type technological innovations. Through this integrated approach, this study classifies technology convergence into four distinct patterns. An analysis of USPTO data spanning 1976–2019 underscores that as knowledge matures, its application in convergence processes intensifies. Pioneers exhibit faster knowledge advancement and maintain focused partnerships, whereas followers diversify across disciplines and pursue extensive collaborations. These results highlight the strategic importance for firms to coordinate their knowledge-based attributes with their technological progression pace. Firms should strategically harmonize their innovation approaches with their market stance to fully leverage the advantages of technology convergence.

Natural resource and energy efficiency in BRICS countries: Can green innovation capabilities really change the game?

The inefficient exploitation of resources, overdependence on fossil fuels for energy production, and inappropriate waste management strategies have resulted in mounting environmental challenges that seriously threaten humanity and the planet.The United Nations urges businesses to transition from fossil fuels to sustainable practices, fostering cooperation between natural resources, the economy, and ecology to achieve SDGs. This shift is critical for emerging economies, which may experience rapid growth while heavily relying on fossil fuels. This study uses the nonparametric data envelopment analysis and directional distance function (DEA-DFF) model to examine how organizational green and technological innovation capabilities impact natural resource and renewable energy efficiency in BRICS countries from 2011 to 2021. The results indicated that green and technological innovation significantly improve resource and energy efficiency in BRICS economies, supporting the theoretical arguments given in the dynamic capabilities theory (DCT), business technology adoption model (BTAM), and natural resource-based view (NRBV). It all proposes theoretical and practical implications for similar developing nations. Overall, the results of the study are robust to different econometric models and data processing techniques.

ICT, Supply Chain Digital Integration Capability, and Firm Financial Performance: The Antagonistic Effects of Perceived Government Support and Cognitive Constraints on Digital Transformation

While awareness among managers regarding the benefits of digital transformation in supply chain management has grown, many Chinese SMEs have not fully embraced this shift due to ineffective ICT investments, a lack of effective government support, and the presence of related cognitive challenges. Leveraging a sample of 302 SMEs in China, the study employs SEM techniques to validate the direct effect of ICTs on the digital integration capability, and the relationship between the digital integration capability and firm financial performance. Furthermore, the LMS technique is applied to investigate the moderating role of government support and cognitive constraints within these relationships. Result shows that: (1) ICTs positively affect firm’s supply chain digital integration capability; (2) firm’s supply chain digital integration capability positively affects firm financial performance; (3) perceived government support exhibits an antagonistic effect, hindering the promotion of supply chain digital integration capabilities through ICT infrastructures; (4) Certain cognitive constraints related to digital transformation act as negative moderators within the digital transformation process. Through the exploration of two previously overlooked factors, namely perceived government support and cognitive constraints related to digital transformation, our research contributes to a deepened understanding of dynamic capability theory, social cognitive theory, and organizational inertia theory. Our findings suggest that government policymakers must reassess the effectiveness and objectives of policies in the digital transformation journey. Furthermore, firms are urged to acknowledge and address the potential adverse effects of cognitive constraints within their organizations and among their supply chain partners. Emphasizing the importance of digital integration capability is also crucial.

Role of Knowledge Management Practices in Enhancing Innovation and Competitiveness in the Ethiopian Leather Industry

Purpose: The aim of the study was to investigate the role of knowledge management practices in enhancing innovation and competitiveness in the Ethiopian leather industry.
 Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
 Findings: The role of knowledge management practices in enhancing innovation and competitiveness in the Ethiopian leather industry is significant. Through effective knowledge management strategies, such as knowledge sharing, transfer, and utilization, firms can capitalize on their intellectual capital to foster innovation and improve competitiveness. By leveraging existing knowledge assets and creating a culture of continuous learning and innovation, Ethiopian leather companies can position themselves for sustained growth and success in both domestic and international markets.
 Unique Contribution to Theory, Practice and Policy: Resource-based view (RBV) theory, dynamic capabilities theory & social capital theory may be used to anchor future studies on the role of knowledge management practices in enhancing innovation and competitiveness in the Ethiopian leather industry. Organizations within the Ethiopian leather industry should invest in capacity-building programs to enhance employees' knowledge management capabilities. Government policies should be formulated to support knowledge management initiatives and innovation in the Ethiopian leather industry.

Interrelation between Sustainable Dynamic Capabilities, Corporate Sustainability, and Sustained Competitive Advantage

Achieving sustained competitive advantage in the current business landscape has become an important challenge for both the service and manufacturing sectors. Based on the thematic analysis of the empirical data from expert interviews of 46 professionals from Australia and Pakistan, this study puts forward a framework to achieve sustained competitive advantage. The research employs a dynamic capability (DC) theory lens and creates a foundation for the “sustainable dynamic capabilities” concept for future research. The findings affirm that (1) sustainable dynamic capabilities lead to sustained competitive advantage, (2) sustainable dynamic capabilities lead to corporate sustainability, (3) corporate sustainability leads to sustainable dynamic capabilities, and (4) corporate sustainability acts as a mediator between sustainable dynamic capabilities and sustained competitive advantage. By utilising the proposed framework, practitioners can clearly define their strategies to achieve competitive advantage by implementing sustainability practices. The findings of this research clearly pinpoint the interrelationship between sustainability practices and sustained competitive advantage, and sustainability should be taken as a dynamic capability itself, opening up new avenues for future research.

The influence of digitalization on SMEs’ OFDI in emerging countries

The role of digitalization has been understudied in the literature on small and medium-sized enterprises’ (SMEs) outward foreign direct investment (OFDI) in emerging countries. Building on the internalization and dynamic capabilities theories, this paper examines how digitalization facilitates OFDI by SMEs in emerging countries. Using a dataset of 562 Chinese SMEs from 2011 to 2020, we find that SMEs’ digitalization has a positive impact on their OFDI levels, measured using both the number of overseas subsidiaries and the number of host countries. This effect is mediated by a firm’s dynamic capability and moderated by top managers’ international experience and industry competitive intensity. This paper contributes to the literature by revealing the mechanisms by which digitalization affects SMEs’ OFDI and the boundary conditions that may moderate this relationship.

How does organizational resilience promote firm growth? The mediating role of strategic change and managerial myopia

Combining dynamic capability theory and the “capability-behavior-result” research logic, this study sheds light on the influence of organizational resilience on firm growth and how strategic change and managerial myopia mediate this relationship. Furthermore, the moderating role of environmental uncertainty is discussed. We employ a sample of A-share listed manufacturing companies in China during the period 2010–2020. The results demonstrate that organizational resilience promotes firm growth. Strategic change and managerial myopia play a mediating role between organizational resilience and firm growth. Environmental uncertainty positively moderates the relationship between organizational resilience and strategic change, but negatively moderates the relationship between organizational resilience and managerial myopia. Additionally, our findings indicate that the promotion effect of organizational resilience on firm growth is more significant in non-state-owned enterprises, small and medium-sized enterprises, and non-labor-intensive industries. This study offers practical implications for managers seeking sustainable development through organizational resilience.

Does social capital affect supply chain performance? Establishing an underlying mechanism and a boundary condition

PurposeThis study examines the direct and indirect effects of social capital on supply chain performance via supply chain quality integration (SCQI), which refers to integrating supply chain partners from the perspective of quality management. It also examines the moderating role of environmental uncertainty in the link between social capital and SCQI and determines the conditional indirect effect of social capital on supply chain performance via SCQI.Design/methodology/approachData were collected using a time-lagged research design through a self-administered survey of supply chain professionals in manufacturing firms in Pakistan. Hayes’ PROCESS Macro was used to test the hypotheses.FindingsThe results show a positive relationship between social capital and supply chain performance. SCQI partially mediates the relationship between social capital and supply chain performance. Environmental uncertainty significantly moderates that relationship in such a way that firms that operate under high environmental uncertainty are more likely to use their social capital to develop SCQI than firms that operate under low environmental uncertainty.Practical implicationsThe study has practical implications for managers who seek to implement SCQI practices using social capital. Leveraging social capital across the supply chain fosters strong connections and a quality-oriented approach across the supply chain, and improves overall performance. Managers can use the power of social capital to navigate environmental uncertainty.Originality/valueThis study’s originality lies in its drawing on the dynamic capability theory and contingency theory and integrating the dispersed scholarly work on social capital, SCQI, and supply chain performance under the boundary condition of environmental uncertainty.

Performing in green: towards eco-innovation through agility and customer involvement

PurposeThis paper shows how organisational agility allows companies to adopt the necessary changes to remain competitive and produce with a lower environmental impact, implying customers in the value chain.Design/methodology/approachThis investigation uses a cross-sectional design to collect data on the study variables from a sample of 260 Spanish manufacturing organisations. Structural equations with PLS are applied to test hypotheses.FindingsResults show that organisational agility is positively related to eco-innovation. Furthermore, eco-innovation results in a positive relationship with organisational performance. Finally, it has been found that customer involvement positively moderates the effect of organisational agility on new green processes and products and makes green product innovations more successful.Practical implicationsConclusions indicate that would be advisable that innovative companies promote capabilities such as organisational agility, and integrating customer involvement throughout their value chain, for developing successful new green products increasing their results with a lower environmental impact. Likewise, the customer’s involvement in eco-innovation projects has been found, in companies with agile behaviours, that could aim to increase their performance, helping to react more quickly to market trends and saving money in product development.Originality/valueThis investigation addresses three gaps previously identified in the literature. Firstly, it covers a lack of research on how agility could foster green innovation and how this could positively affect their performance outcomes. Secondly, it studies a moderating factor, customer involvement, and its effects on the relationship between organisational agility and eco-innovation in product and process and between eco-innovation in product and organisational performance. Thirdly, it introduces dynamic capabilities theory through agility concept to study the dynamic context of the eco-environment.

Big data analytics-artificial intelligence and sustainable performance through green supply chain practices in manufacturing firms of a developing country

Purpose This study aims to examine the role of big data analytics (BDA) powered by artificial intelligence (AI) in improving sustainable performance (SP) through green supply chain collaboration (GSCC), sustainable manufacturing (SM) and environmental process integration (EPI). Design/methodology/approach Data was collected from 249 supply chain professionals working at various manufacturing firms, and hypotheses were tested through a quantitative method using PLS-SEM with the help of SmartPLS version 4 to validate the measurement model. Findings This study identified that BDA-AI significantly and positively affects GSCC, SM and EPI. Similarly, the results showed that GSCC significantly and positively affects SP. At the same time, SM and EPI have an insignificant effect on SP. The GSCC found a significant relationship between BDA-AI and SP for mediation. However, SM and environmental performance integration did not mediate the relationship between BDA and AI and SP. Originality/value This research evaluated a second-order model and tested SP in conjunction with the dynamic capability theory in the manufacturing industry of Pakistan. Therefore, this research could be beneficial for researchers, manufacturers and policymakers to attain sustainable goals by implementing the BDA-AI in the supply chain.

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.

Research on the impact of digital technology applications on firms' dual innovation in the digital economy context

In recent years, applications of digital technology have gradually become the primary driving force for enterprise innovation. Although the impact of digital technology applications on enterprise innovation has been recognized by the academic community, existing studies have failed to systematically reveal the mechanism of digital technology applications on firms' dual innovation, overlooking the data-driven dynamic characteristics of innovation development in the digital era, and neglecting external conditions such as environmental complexity. Therefore, based on dynamic capability theory and resource orchestration theory, this study adopts a “technology-economy” research paradigm to explore and analyze the impact of digital technology applications on dual innovation. It also analyzes the mediating role of data-driven dynamic capabilities and the moderating effect of environmental complexity. The article conducts an empirical test using microdata of Chinese Shanghai and Shenzhen A-share listed firms from 2010 to 2021.The research results show that digital technology applications positively promote dual innovation of enterprises and exhibit certain heterogeneity. Data-driven dynamic capabilities play a mediating role in the relationship between digital technology applications and dual innovation. The study also tests the moderating effect of environmental complexity and finds that the higher environmental complexity in which the company operates, the stronger the facilitating effect of digital technology applications.

Transforming metaverse marketing into strategic agility in SMEs through mediating roles of IMT and CI: theoretical framework and research propositions

PurposeThis study aims to explore the conversion of metaverse marketing (MVM) into strategic agility among SMEs based on dynamic capabilities (DC) and dynamic management capabilities (DMC) theories. This paper discusses how constructs such as immersive marketing technologies (IMT), customer immersion (CI) and managerial capabilities (MC) play critical role in the transformation of MVM into strategic agility (SA).Design/methodology/approachA theoretical framework based on DC and DMC theories, and a comprehensive review of the literature on MVM, IMT, CI, MC and SA, was developed in order to theoretically investigate the relationships between MVM and SA. In this theoretical framework, MVM is the independent variable, while the dependent variable is SA. Also, IMT and CI both mediate the association between MVM and SA, while MC moderate the association between MVM and SA in one stream; and CI and SA in another stream.FindingsThis research study develops a theoretical framework that recommends nine set of important research propositions in MVM. An extensive literature review was conducted to examine the theoretical framework on the effect of MVM on SA. The proposed theoretical framework suggests that brand community development and communication, experiential marketing and personalisation in MVM, once accessed through IMT (i.e. VR, AR, MR) and CI (i.e. customer engagement, customer absorption-customer acquisition and assimilation of knowledge, presence) can produce significant SA through customer experience management, value co-creation and process innovation.Originality/valueThis current study develops a theoretical framework that theorise the relationship between MVM and SA rooted in literature on MVM and SA, and also based on DC and DMC perspective. The moderating effect of MC on the relationship between IMT and SA on one hand, and CI and SA on the other, provides support to IMT and CI as mediators in the transformation of MVM into SA. This study also provides insight into SME adoption of MVM and how it generates SA. Lastly, the current study contributes to the body of knowledge on MVM, IMT, CI, MC and SA.

RESEARCH ON THE IMPACT OF DIGITAL TRANSFORMATION ON ENTERPRISE ESG PERFORMANCE

This paper analyzes the impact of digital transformation on corporate ESG (environmental, social, and governance) performance based on the dynamic capability theory of enterprises and the stakeholder theory perspective and conducts empirical tests based on the data of Chinese A-share listed companies in Shanghai and Shenzhen from 2009 to 2022. Before, researchers mostly looked at overall ESG performance. This paper, on the other hand, starts by looking at overall ESG performance and then goes on to look at each of the three ESG dimensions (E, S, and G). It then does a subdimensional refinement to see how digital transformation affects the different dimensions of ESG performance and then checks how the company's ability to innovate in green technology affects the subdimension of ESG performance. This paper puts digital transformation and ESG performance in the same analytical framework, and from the perspective of digital transformation, it puts forward targeted insights and suggestions to improve the ESG performance of Chinese enterprises, providing theoretical support and empirical evidence to promote the practice of ESG development in Chinese enterprises.