Dynamic Capabilities Approach Research Articles

Tourism's circular economy: Opportunities and challenges from an integrated theoretical perspective

AbstractThis study explored circular economy (CE) performance in small‐ and medium‐sized enterprises (SMEs) in the tourism sector. The study's theoretical framework comprised value–belief–norm theory, institutional theory, upper echelon theory (UET), and the dynamic capabilities (DCs) approach. Empirical data from 286 Indian SMEs were analyzed using partial least squares structural equation modeling. The results indicated that personal norms, coercive pressures (CP), mimetic pressures (MP), and top management commitment toward the environment influenced CE performance through DCs. However, normative pressures (NP) did not significantly influence CE performance. DCs were a catalyst enabling individual beliefs, organizational factors, and external pressures to push SMEs toward a CE. Nevertheless, possibly due to insufficient resources, SMEs were reluctant in improving their CE performance. Policymakers and SME owners should therefore develop DCs in their organizations to achieve CE performance through appropriate resource assessment and design.

The dynamic capabilities approach as the bridge between employee diversity and innovation

Recent events like the COVID-19 pandemic but also dynamic yet consistent changes like the technological revolution have transformed the business environment but also the context for Human Resources Management. The diversification of the workforce is a fact, yet organizations very often struggle to fully use the potential of their diverse workforce. The article shows a new approach to diversity management, through the lens of dynamic capabilities, on the example of innovations show how to use diversity for organizational benefits. To examine how diversity may influence innovation an exploratory, qualitative research has been designed. Nineteen in-depth-interviews with board members and directors of IT companies have been conducted. The results show, that when focusing on innovation functional diversity, or more broad verity, are of primary importance. The analysis of the interviews allowed for the identification of three dynamic capabilities: acquiring, conversion, and application of variety which transform diversity into innovation. The article shows, to fully draw from diversity a new approach to diversity management is required. It contributes to the ongoing debate on the future and new directions for diversity management and fills an existing theoretical and research gap by adding the dynamic capabilities approach to the discussion

The role of enterprise risk management in enabling organisational resilience: a case study of the Swedish mining industry

AbstractThis study empirically examines the role of enterprise risk management (ERM) in developing and maintaining resilience resources and capabilities that are necessary for an organisation’s strategic transformation towards sustainability. Data was collected through 25 semi-structured interviews, one non-participant observation, and secondary sources in the context of a Swedish mining company undergoing a high-risk strategic transformation towards full decarbonisation. Following the temporal bracketing approach (Langley in Academy of Management Review 24:691–70, 1999) and employing thematic analysis (Gioia in Organizational Research Methods 16:15–31), the data was structured and analysed according to three phases from 2012 to 2023. The findings show: first, different ERM practices, such as risk governance frameworks, risk culture, risk artefacts, and risk awareness, influence resilience resources and capabilities. Second, the evolution of risk management practices from traditional risk management to ERM is an ongoing developmental process to ensure that risk management continues to be aligned with the company’s strategy. Third, in tandem with strategic changes, resilience in terms of resources and capabilities emerges over time and develops through a series of events, gradually enhancing the company’s ability to manage risks and uncertainties associated with multidimensional sustainability challenges. These results contribute to the ERM literature that follows the dynamic capability approach and also focuses on the relationship between ERM and strategy by adding more detailed empirical evidence from the risk management literature in relation to resilience resources and capabilities. Additionally, the results contribute to the resilience literature that follows a developmental perspective.

The dynamic capabilities approach and regional business resilience: an Australian case study

ABSTRACT The frequency and severity of major disruptions (e.g., disasters, epidemics/pandemics) are increasing, significantly impacting business survival in regional areas. Using the dynamic capabilities approach, this paper reports on the recovery pathways and resilience of Australian regional businesses during the recent COVID-19 pandemic. A case study approach is adopted to explore the capabilities through which regional businesses can plan for, recover from, and develop strategies for building resilience. Using the data from 18 semi-structured interviews with business owners operating in different industry sectors and a web-based forum with 10 key stakeholders in regional South Australia, a dynamic capabilities resilience framework is developed. Results suggest that the dynamic capabilities approach during crises can become integral to the long-term business recovery of regional Australian businesses. By revealing both the determinants of business survival and the constraints regional businesses face during major crises, the study contributes information that businesses, government and non-government agencies that support them can use to develop effective recovery pathways, which is central to the future sustainability of regional Australia.

Exploring Best Practices of the I4.0 Technology Application in the Design Phase of CE Implementation: A Dynamic Capabilities Approach

Over the past decade, the manufacturing industry has been propelled by the Fourth Industrial Revolution (I4.0). This new paradigm has driven companies to convert their factories into intelligent ones by seamlessly integrating digital and physical spaces. To achieve this transformation, various I4.0 technologies, such as the Internet of Things (IoT), Big Data Analytics (BDA), Artificial Intelligence (AI), Additive Manufacturing (AM), and Cloud Computing (CC), have been employed. Simultaneously, global interest in sustainability has surged, leading to the advancement of the Circular Economy (CE) as a means to achieve carbon neutrality and resource optimisation at the corporate level. Previous studies have acknowledged the crucial role of I4.0 technologies in realising CE but predominantly focused on some of its specific strategic areas. Notably, extensive attention has been given to "reducing" resource consumption and "recycling" resources, while the area of "rethinking" encompassing product and service design has been understudied despite its profound impacts on the management of resources and processes throughout the subsequent operations. To address this research gap, this study explores how manufacturing companies from New Zealand (NZ) and Japan leverage I4.0 technologies to enhance their dynamic capability in the design phase of CE practices. Drawing on the perspective that product and service design represents a dynamic capability, a qualitative case study approach is designed. By conducting cross-country comparisons between NZ and Japan, this research identifies best practices in leveraging I4.0 technologies during the design phase of CE implementation. The best practices are expected to include supplier involvement in the design phase through IoT, data-driven design through BDA, and precise design specifications through AM. By focusing on the critical aspect, this study will contribute to a more comprehensive understanding of the application of I4.0 technologies in CE implementation. The findings will also offer valuable insights for companies seeking to effectively embrace CE.

Developing capabilities underlying to Industry 4.0 design principles within the manufacturing context

PurposeUsing a dynamic capabilities approach, the present study aims to identify and assess the effects of organizational determinants on capabilities underlying Industry 4.0 design principles, such as integration, virtualization, real-time, automation and servitization.Design/methodology/approachPLS-SEM enables a two-stage hierarchical latent variable reflective-formative model which was used for assessing the effect of organizational determinants on Industry 4.0 design principles. Five hundred six manufacturing companies constitute the effective sample, representing a population of manufacturing companies in an industrialized country.FindingsThe findings reveal that Industry 4.0 design principles extensively depend on digitalization resource availability. At the same time, companies that possess digitalization and change management capabilities tend to devote more resources to digitalization. Finally, the paper reveals that networking and partnership capability is the critical enabler for change management and digitalization capabilities.Practical implicationsThe paper provides empirical evidence that the successful development of Industry 4.0 design principles and their underlying integration, virtualization, real-time, automation and servitization capabilities are resource dependent, requiring significant upfront investment and continuous resource allocation. Further, the study implies that companies with networking and partnership, change management and digitalization capabilities tend to allocate more resources for Industry 4.0 transformation.Originality/valueExclusively focusing on empirical research that reported applied insights into determinants of Industry 4.0 design principles, the study offers unique implications for promoting Industry 4.0 digital transformation among manufacturing companies.

How Knowledge-intensive Organizations Thrive Under Dynamic Conditions: An Organizational Capability Perspective

Knowledge-intensive organizations primarily rely on knowledge and expertise as key strategic resources. In light of economic, social, and health-related crises in recent years, such organizations increasingly need to operate in dynamic environments. However, examinations on dynamic capabilities specifically in knowledge-intensive organizations remain scarce. This is remarkable given the role that knowledge holds as an economic resource in developed countries. To provide an explanation of how knowledge-intensive organizations can prevail among competitors under dynamic conditions, the authors integrate two literature streams in a knowledge-intensive context: the knowledge-based view and the dynamic capabilities approach. The knowledge-based view focuses on the nature of organizational knowledge as a critical resource and illustrates specific properties of knowledge in contrast to traditional means of labor such as capital. The dynamic capabilities approach on the other hand is about a firm's ability to integrate, build, and reconfigure internal and external resources and can be drawn on to explain organizational success through adaptation to dynamic contexts. In this conceptual study, the authors propose a research model linking knowledge processes to organizational performance through two different paths: (1) Operational capabilities permit organizations to make their living in the present and refer to efficiency. (2) Dynamic capabilities allow organizations to change their resource base and, therefore, enable their long-term survival in dynamic environments by focusing on effectiveness. Additionally, the authors hypothesize a moderating effect of environmental dynamics on the relationship between dynamic capabilities and performance. The study offers a comprehensive overview on the interplay between dynamic capabilities and the knowledge-based view, offering valuable insights for both researchers and practitioners in the field.

Innovation Capacity in Courts: A Theoretical Framework and Research Agenda

Innovation in the public sector is a subject that has attracted increasing interest of public managers, policymakers, and scholars, encompassing a possible response to the complex and uncertain context experienced by governments worldwide. In the same way, the search for efficiency and effectiveness has driven the development and adoption of innovations in courts given the influence that these institutions have on the social and economic development of countries. In this sense, understanding what influences the innovation capacity in courts is an important topic for investigation. This paper contributes to this matter, using the Resource-Based View and Dynamic Capabilities approach, by analyzing the recent scientific literature on innovation capacity in the public sector, which allowed the identification of six main factors: Leadership, Team Behavior, Collaboration, Organizational Resources, Knowledge Management, and Information Technology. This leads to the proposal of a theoretical framework of the main factors associated with innovation capacity in courts. The theoretical and practical implications of the framework are discussed, and six propositions to drive a research agenda are presented.

How can companies boost legitimacy in international markets? A dynamic marketing capabilities approach

PurposeForeign markets possess different characteristics to domestic ones; this means that dynamic marketing capabilities (DMCs) should be adjusted. This paper aims to understand how these DMCs enable firms to achieve greater legitimacy in international markets.Design/methodology/approachThis research uses a qualitative approach based on in-depth interviews in collaboration with an association of exporting firms.FindingsFindings suggest five areas of DMCs to improve organizational legitimacy overseas: flexibility, relationship management, local market sensitivity, anticipation and exemplariness. Those capabilities should be combined and will play a different role depending on the implementation phase of the external company. Resource allocation and capability development should follow an integrative approach emphasizing proximity, adaptability, alliances, engagement and credibility to reach differentiation in foreign markets.Originality/valueThe originality is mainly focused on the cohabitation and strong synergies between DMCs and legitimacy. This aspect is particularly relevant because legitimized companies have higher levels of survival, which is fundamental in the international venture.

Impact of Implementing the Unification of The IT Section into One Division Using a Change Management Strategy at PT XYZ

ABSTRACT In the era of Industry 4.0, many companies demand to determine a Change Management Strategy in order to maximize capacities and efficiency. Currently, PT XYZ sees existing problems in the IT division, which are not meeting demands as expected and slowing down the whole organization’s development. In accordance with these problems, Project Monitoring methods are proposed to be applied in PT XYZ’s organizational structure as a result of the Change Management Strategy. A Change Management Strategy will be implemented in the IT division using the proposed methods; Kotter’s Model and 7-S Framework followed by the development of a project monitoring application called Dashboard Monitoring. In accordance, with Kotter’s Model’s approach, the creation of two new positions is highly recommended inside the IT division to support its effectiveness. These positions are Project Management Officers and Business Analysts. These two positions are expected to focus more on the process of developing new applications and/or systems. Thus, the 7-S Framework implementation will be supporting the change of Shared & Value from the change in the organizational structure of PT XYZ with the objective of simplifying the process of analyzing and decision-making at the managerial level, especially in terms of deciding to create an application. Furthermore, a Dashboard Monitoring application has been implemented in PT XYZ, resulting in improvements in lead time and productivity throughout multiple IT projects. Objective – Developments in the era of Industry 4.0 make all companies adapt towards digitalization, to determine Change Management Strategies to maximize capacity and efficiency. PT XYZ sees problems in the IT division, where the IT Division cannot meet the demands as expected. Thus, resulting in delays in the development of the organization. Obstacles in processing so many requests in making applications between divisions in the company, developing a product application system is the biggest obstacle faced by PT XYZ. Methodology – The author uses the following Research Methodology; (1) understand the identification of existing problems based on the author's observations and communication with PT XYZ; (2) study the organizational structure: (3) Literature Review; (4) Interviews and observations at PT XYZ. The first stage is interviews with all Vice Presidents from all divisions at PT. XYZ. The second stage is an interview by asking the Chief Executive Officer of the company regarding information related to changes in the IT Division. ; (5) Kotter Framework and 7-S approaches, all of which start with analyzing with Dynamic Capability Theory; (6) Provide recommendations, propose to create a new IT division, then analyze the new organizational structure using the 7-S Framework and produce proposed new values. Findings – The author got information from PT XYZ Top Management, where from the results of this interview a Change Management Strategy is proposed to be implemented in the organizational structure of PT XYZ. The Change Management Strategy will be implemented in the IT division using the proposed method, namely the Kotter Model and the 7-S Framework, which were previously analyzed using the Dynamic Capability approach. Then followed by the development of a project monitoring application called Dashboard Monitoring. Novelty – The author implementing the 7-S Framework to support Shared & Value changes from changes in PT XYZ's organizational structure. Next implement the Kotter Model Strategy which explains 8 Strategies to produce recommendations for changes to PT XYZ's organizational structure, by adding the positions of PMO (Project Management Officer) and BA (Business Analyst). In addition, the Dashboard Monitoring application was also implemented at PT XYZ, resulting in increased lead time and productivity in various IT projects.

Innovation capabilities and market performance in the Zimbabwean telecommunications industry: The mediating role of individual activity

Drawing upon the dynamic capabilities approach, this research examined the impact of innovation capabilities on market performance. Innovation capabilities are widely acknowledged as critical ingredients of entrepreneurial performance. Consequently, there has been a plethora of research work on this concept. However, owing to the multifaceted nature of innovation capability as a construct, there has been increased calls for more research on this concept. Hence, this study adopted the survey method and collected data from 170 managers from the Zimbabwean Telecoms sector. Results, analysed using Structural Equation Modelling, revealed the significant direct impact of participatory leadership culture and individual activity on market performance. Individual activity partially mediated the relationship between participatory leadership culture and market performance. However, no mediation was found between work climate and well-being and market performance. This study contributes to the innovation literature by examining the mediating mechanisms through which innovation capabilities enhance firm-level performance. Finally, the research extends the innovation literature by validating the link between innovation capabilities and market performance.

Universities' entrepreneurship mission in a Dynamic Capability approach: A multicase study in south Brazil

Objective of the study: In order to understand how universities in south Brazil have been developing their entrepreneurship mission this study aimed to analyze the role of their Technology Transfer Offices (TTOs) by the lens of the dynamic capability theory, considering sensing, seizing and transforming practices. Methodology/approach: qualitative approach, and a multiple case study strategy, 31 semi-structured interviews were carried out with different actors linked to university TTOs as well as documentary research. Main results: The results reveal that sensing, seizing, and transforming practices have been adopted by the university TTOs and are supporting them to face the new scenario in higher education represented by entrepreneurial and innovational demands. Theoretical contributions: They consist on a debate on how universities in Brazil are strategically managing their practices in order to adapt to a new era in higher education throughout the development of dynamic capabilities. Relevance/originality: This research provides an in‐depth process analysis including the microfoundations of dynamic capabilities to the development and the advance of the third mission of the universities, contributing to the study’s originality. Management contributions: The managemental contribution of this study is to offer a view of new modes and practices for other universities that are seeking to operate in an entrepreneurial dimension.

Dynamic Capabilities Perspective of the Firm in Response to the Crisis Economic Environment

This study focuses on the corporate responses and transformation of management practices in crisis economic environment. The dynamic capabilities approach to the firm offers a good theoretical framework for understanding the process of a firm's learning and innovation products, processes and services in rapidly changing circumstances. We conducted a survey to learn business leaders' perceptions of economic crisis and how they have changed in response to the crisis from the dynamic perspectives of the firm. We found that inefficient financial resource selection and ineffective deploy-ment of financial resources by business groups, accompanied by heavy debt-driven business expansion, were the prime factors that contributed to the crises. Increased awareness of the importance of corporate competitiveness received the largest response; increased capability of crisis management, better preparation to deal with future crises through crisis management strategy and routinization of crises management were all important changes in response. The results of this study provide a theoretical framework to understand Korean firms' learning and innovating products and processes after the crisis.

A dynamic capability evaluation of emerging business models for new mobility

The ‘new mobility’ is claimed to promise improved transport services with reduced socioeconomic and environmental impacts whilst at the same time creating high-value business opportunities. The present article contributes to understanding the latter part of this promise through analysing the sources of value creation in the new mobility industry. It makes a novel application of a business model concepts - the Dynamic Capabilities approach - to transport research. Drawing on findings from expert interviews with professionals in innovation clusters, the findings reveal that new mobility companies benefit from an inherent dynamism and a continuous learning culture. The participation in networks and alliances let companies reach broader market solutions through cross-regional collaboration. These ecosystems are well equipped to address wider mobility needs founded on managing data. For managers in the new mobility, key conclusions are that establishing a concise value proposition and expanding key resources such as staff skills or data management procedures are crucial for business sustainability.

The influence of transformational and learning through R&D capabilities on the competitive advantage of firms

PurposeThis study provides theoretical and empirical insights into how firms can enhance their performance strategically and financially by integrating learning and transformational capabilities into research and development (R&D) activities based on the dynamic capabilities approach. To achieve this, the authors propose that transformational capabilities in R&D mediate the relationship between learning capabilities in R&D and competitive advantage.Design/methodology/approachUsing a purposive sampling technique and standardized questionnaires, data were collected from 118 R&D and senior managers. To analyze the data, multiple regression analysis, along with SPSS PROCESS macro (Model 4), was used.FindingsThe results support the theoretical assumption that there are direct and indirect positive and significant effects between learning capabilities in R&D and competitive advantage as mediated by transformational R&D capabilities.Originality/valueThis study explores R&D from a dynamic capabilities perspective and suggests that learning capabilities should come first to enhance businesses’ competitive advantage. Furthermore, transformational R&D capabilities can explain the relationship between learning capabilities in R&D and competitive advantage. The authors recommend that researchers should investigate the contributions of R&D to promote competitive advantage.

The Product–Service System Supply Chain Capabilities and Their Impact on Sustainability Performance: A Dynamic Capabilities Approach

In response to competition and other market challenges, many consumer manufacturing companies are offering Product–Service Systems (PSSs) in order to improve their sustainability performance. This paper aims to examine the relationship between the PSS supply chain (SC) capabilities and sustainability performance. It empirically investigates a framework that hypothesises the impact of seven PSS SC capabilities on sustainability performance. Data were collected from 447 official motorcycle service partners in Indonesia and analysed using structural equation modelling. The findings reveal that innovative service delivery and sustainable product–service capability positively affect sustainability performance, whereas partner development, reflexive control, and re-conceptualisation positively affect sustainable product–service capability. The results also validate that collaboration and knowledge assessment do not directly affect sustainability performance. A contribution of this study is the innovative use of quantitative methods to provide empirical evidence that the PSS SC capabilities can contribute to sustainability performance, directly and indirectly. It also broadens the utilisation of Dynamic Capabilities (DCs) in PSS SC research. The findings also guide managers and decision-makers in the implementation of the PSS SC capabilities required to enhance sustainability performance.

Strategic Management in Industry 4.0: Digital Transformation in NIKE Inc. Using the Dynamic Capability Approach

Today we are in the industrial ecosystem 4.0, which is characterized by various uses of technology such as the Cloud Computerization, the Internet of Things (IoT), Artificial Intelligence (AI) and Big Data which they are part of what is called digital transformation. At this time the company is required to be able to adapt to industry 4.0, especially with digital transformation, in order to the company can survive and still be able to competing with other companies. The research method used in this article is a descriptive research method by using secondary data sources, where secondary data comes from literature studies conducted from the results of searching various articles on the internet. This article discusses how NIKE Inc. carry out digital transformation through dynamic capabilities which consist of sensing, seizing, and transforming processes.
 Keywords: Industry 4.0, Digital Transformation, Dynamic Capability

A dynamic capabilities approach of Industry 4.0: the experiences of managers operating in two emerging economies

PurposeThe purpose of this study is to examine the implementation of Industry 4.0 (I4.0) through the lens of the dynamic capabilities framework. Contrary to most existing research, this study chooses a cross-national viewpoint, exploring companies operating in two emerging economies.Design/methodology/approachSemi-structured interviews were conducted with 80 company managers operating in eight industries in Vietnam and Bolivia. The chosen inductive analysis was supported by qualitative content analysis and data structure.FindingsThe analysis reveals 13 conceptual dimensions. For instance, sensing opportunities underlines tangible and intangible “direct prospects”, such as enhanced accuracy, speed and cost effectiveness, whereas “operational management pressures” (sensing threats) identify the dilemma of changing individuals’ mindset, recruitment and addressing financial needs. While there is an overall agreement in key dimensions, differences between managers from both countries also arise, including staff’s adaptation and constant upskilling.Originality/valueEmpirically, this study responds to calls for cross-national studies investigating I4.0 initiatives. In doing so, the data gathered from company managers engaged in business in emerging economies afford new perspectives, with practitioner value. Theoretically, the numerous dimensions emerging from the data analysis provide useful conceptual insights to understand managerial aspects in considering and adapting to I4.0 expectations and requirements. These insights are reinforced by the development of a conceptual model that illuminates the initiatives, efforts and challenges of embracing this phenomenon.

“Dealing With it.” Creating External Fit in HRM Through Learning and Collaborating

Aim – The aim of the article was to begin with it explicitly adopts a best fit approach to external fit in HRM, by examining HRM innovation as the de-pendent variable. Then the article theorizes how HRM innovation relates to external developments that organizations experience. And finally, a theoret-ical framework is developed to understand how organizations to adapt to these developments. Methodology - The present study relies on a quantitative method and a deductive approach. Cross-sectional data were collected including several cases at one point in time. The responses from these cases provide the information for testing the hypotheses that state relationships among spe-cific variables. To investigate whether it was possible to reduce information and to create reliable measure of multiple items, a scale analyses were per-formed. Findings - The main findings of this study are twofold. First, the more de-velopments organizations face, the more innovate they are with regard to how they manage their human resources. Secondly, these innovations take place because organizations have organizational learning practices and co-operate more often on HR related issues with other organizations. Practical implications - Findings are basically in line with alignment ap-proaches, while adding more detail to the underlying mechanisms through which alignment is achieved according to the dynamic capabilities approach and the relational view. According to these approaches, organizations seek internal and external fit and those possessing dynamic capabilities and ex-ternal ties are better in achieving such fit. Since facing several trends means that misfits occur between the environment and the organization, organiza-tions respond by innovating their HRM through learning and collaborating. Originality/Value - This study tests the hypotheses that organizations achieve external fit via (1) the development of organizational learning prac-tices; and (2) by collaboration with other organizations. Quantitative data gathered with a survey among 711 private organizations from the Nether-lands are used to test these hypotheses.

High-Performance Level and Innovation Capabilities in the Aerospace Industry of Mexico: A Qualitative Comparative Analysis

This paper analyzes the necessary and sufficient conditions for successful innovation in design and engineering companies (DECs) of the aerospace industry in Mexico. It is argued that successful innovation activity is a condition for achieving a high-performance level (HPL) among DECs. Seven innovation capabilities are analyzed to determine whether an HPL exists. Based on the dynamic capabilities approach, this research suggests that learning capability (LRC), research and development capability (RDC), creative capability (CRC), collaborative innovation capability (CIC), knowledge sharing capability (KSC), and exploitation capability (EXTC) are necessary conditions to achieve an HPL in DECs of the aerospace industry in Mexico. The fuzzy-set qualitative comparative analysis (fsQCA) methods are applied in this research to get insight into the configuration complexity that determines configurational causal relationships between HPL and innovation capabilities among firms of this industry in Mexico.