Dynamic Managerial Capabilities Research Articles

Crisis response strategies: a digital reluctance perspective

AbstractThis research examines the convergence of digitalisation and managerial capabilities in shaping effective crisis response strategies, with a particular focus on understanding the factors that contribute to managers’ digital reluctance. In a two-wave study conducted during the COVID-19 pandemic (2020–2022) through a Dynamic Managerial Capability (DMC) lens, we incorporate the qualitative data from managers of four coworking spaces into a theoretical model that assesses digitalisation as a determinant of DMC in crisis management. Our findings show that digital sensing, digital seizing, and digital reconfiguration capabilities effectively coordinate the survival process. Additionally, we introduce the concept of ‘digital reluctance’ as a constraint on DMC in the context of digitalisation. This behaviour stems from a combination of social, human and cognitive factors, including an avoidance of costly digital tools due to limited resources, scepticism about the ability of digital tools to address core challenges, lack of a compelling competitive advantage, intrinsic confidence in digital maturity, challenges in managing employee learning, and reluctance to sustain digital initiatives that do not yield immediate results. With a theoretical contribution to the crisis management literature, our study provides a better understanding of digital coping mechanisms, highlighting the importance of managers’ social, human and cognitive capabilities. Practically, we analyse the managerial perspectives and pathways for adopting digital technologies to survive in crisis disruptions, against liquidity and solvency threats. Finally, we outline the relevant strategies for achieving business outcomes at four different levels of leveraging digitalisation and DMC exploitation.

Shared business understanding and innovation: The role of firm dominant logic in business model innovation

Business model innovation (BMI) is a key source of innovation that may create a competitive advantage for firms. Drawing insights from the activity system perspective of BMI and dynamic managerial capabilities literature, we argue that a firm's dominant logic promotes BMI, which in turn influences firm performance. We further investigate the boundary condition of managerial connections as providers of privileged resources and information. We examine the proposed hypotheses on a sample of 189 Chinese firms. Our findings suggest that firm dominant logic facilitates both novelty- and efficiency-centered BMI. Further, the two types of BMI affect firm performance differently. Specifically, efficiency-centered BMI improves performance, but novelty-centered BMI does not. In addition, managerial connections strengthen the effect of firm dominant logic on novelty-centered BMI but do not significantly influence the effect of efficiency-centered BMI, reflecting differences between novelty-centered and efficiency-centered BMI. This study is thus noteworthy in its contribution to both the BMI and dynamic capabilities literature.

Affective states and a firm’s performance: the mediating role of dynamic managerial capabilities

PurposeExtant research supports the importance of dynamic managerial capabilities in capturing managers’ individual roles in organisations’ adjustments to change. This paper develops a multidimensional scale for measuring dynamic managerial capabilities consisting of sensing, seizing and reconfiguration capacities that mediate between managers’ affective states and their firms’ performance.Design/methodology/approachThe scale is validated in a survey-based study among 204 managers in companies in the United States of America (USA). We applied a multiple regression model (a triple mediation) using each of DMCs’ three dimensions to test the effects of managers’ affective states on their firms’ performance.FindingsThe multidimensional construct of DMCs adds about 15 % of variance explained to a firm’s performance, as perceived by its managers. So managers’ affective states do have an impact on DMCs and, later, on their firms’ performance.Research limitations/implicationsWe show the impact of negative and positive affect on DMCs. We also show that DMCs’ three dimensions should be treated in a formative manner that advances discussion on DMCs and their role in a firm’s performance.Practical implicationsUnderstanding managers’ affective states helps incorporate “hot cognition” into firms’ strategising processes. Although both positive and negative emotions can be helpful, depending on the situation, positive affect is generally more valuable than negative affect as it relates to a firm’s performance.Originality/valueOur work proposes measuring DMCs based on Teece’s (2007) disaggregation of DMCs into sensing, seizing and reconfiguration capacities. We approach each of these dimensions separately and show that managers’ affective states influence each dimension differently.

Identifying microfoundations of dynamic managerial capabilities for business model innovation

Identifying microfoundations of dynamic managerial capabilities for business model innovation

Dynamic Managerial Capabilities, Business Model Innovation, and Digitalization

Dynamic Managerial Capabilities, Business Model Innovation, and Digitalization

Regulative institutions, dynamic managerial capabilities, and strategic entrepreneurial performance

PurposeThis study examines firms' strategic entrepreneurial behaviors based on the interaction of regulatory institutions and entrepreneurs' cognition, human capital, and social capital capabilities.Design/methodology/approachData was collected from 450 exporting companies in Türkiye, which is a developing economy. Smart PLS 4.0 and SPSS 24.0 software were used to analyze the data. The data were examined using structural equation modeling, confirmatory factor analysis, average extracted variance, composite reliability, and Cronbach's alpha analyses.FindingsThe findings show that entrepreneurial cognition, social capital, and regulatory institutions influence each other, this relationship is not confirmed in managerial human capital. Moreover, while managerial cognition affects strategic entrepreneurship behavior, this effect was not supported for managerial human capital and managerial social capital. However, it was determined that only entrepreneurial cognition mediates the relationship between regulatory institutions and strategic entrepreneurial behavior.Originality/valueThis research enables entrepreneurs to understand, navigate, and appreciate the significance of the interactions between regulatory institutions and dynamic managerial capabilities in decision-making. Additionally, the study allows policymakers to develop evidence-based policy designs that equip entrepreneurs with the insights needed to succeed in a competitive and regulatory complex environment.

International entrepreneurship in innovative SMEs: Examining the connection between CEOs’ dynamic managerial capabilities, business model innovation and export performance

International entrepreneurship scholars aim to understand how small and medium-sized enterprises (SMEs) achieve long-term competitive advantage and international success. This paper examines how business model innovation (BMI) helps entrepreneurial and innovative SMEs in improving export performance suggesting that changes in value creation, value delivery, and value capture are required to target international customers effectively. Additionally, drawing on the dynamic managerial capabilities literature, we look at the role of CEOs’ managerial capabilities on BMI. A quantitative study using partial least squares structural equation model (PLS-SEM) was conducted on 189 innovative Spanish SMEs operating in business-to-business (B2B) international markets. Our findings provide new insights into the underexplored relationship between BMI and export performance generating new evidence regarding the mechanisms through which innovative SMEs may improve export performance. We also highlight the positive relevance of CEOs’ managerial social capital (external connectivity) and managerial cognition (empowering leadership) to foster BMI. Finally, managerial implications and future research directions are proposed.

Crossing the chasm: The role of dynamic managerial capabilities in the turning point of early internationalizing firms

The International Entrepreneurship literature has overlooked the "turning point" in early internationalizing firms (EIF), i.e. the period during which they transition from international entry to post-entry stages. Leveraging Dynamic Managerial Capabilities, I examine PATI, a successful EIF undergoing this transition. Throughout this article, I demonstrate how the characteristics of EIF managers and their dynamic managerial capabilities interact with the organization's dynamic capabilities. I then emphasize how two sets of dynamic managerial capabilities are crucial for EIFs at their turning point: one linked to R&D and engineering, and the other to support and sales. Notably, the latter involves global dynamic managerial capabilities. I also initiate a discussion regarding the potential diversity of dynamic managerial capabilities related to other firms’ activities. Finally, I show how, after the turning point, founders abandon their status as actors in internationalization to concentrate solely on their decision-makers’ role.

Rational versus intuitive cognition and influence of dynamic managerial capabilities on SMEs’ perceived international performance: evidence from emerging economy

PurposeThis study aims to investigate the relationships between managers’ cognitive styles, dynamic managerial capabilities and firms’ perceived international performance. The study is based on cognitive-experiential self-theory, dynamic managerial capabilities and international entrepreneurship.Design/methodology/approachData were collected from 283 managers of small medium enterprises (SMEs) in Türkiye, an emerging economy. The research was conducted using quantitative methods, and Smart partial least squares (PLS) 4 software was used for data analysis. The data were examined through structural equation modelling and mediation analyses.FindingsFindings indicate that rational cognitive styles positively influence managerial human capital, managerial social capital, managerial cognition and perceived international performance. However, the effect of intuitive cognitive styles was confirmed only on managerial cognition. Additionally, it was found that managerial cognition positively affects perceived international performance, whereas managerial social capital has a negative impact. However, the effects of managerial human capital could not be confirmed. Moreover, a full mediation relationship of managerial cognition between intuitive cognitive styles and perceived international performance was identified.Originality/valueThis research carves out a unique niche by synergizing cognitive-experiential self-theory with dynamic managerial capabilities to investigate their conjoined effect on firms’ international performance, an area previously underexplored. Unveiling insights from burgeoning economies like Türkiye enriches the existing body of knowledge, offering substantial contributions to the field of international business.

The effect of institutional pressures and dynamic managerial capability on strategic renewal: The case of strategic agility and digital readiness as mediators in healthcare industry

This research investigates the role of institutional pressures, dynamic managerial capabilities, strategic agility and digital readiness as mediating factors in the gap of the healthcare sector's post-pandemic digital transformation. This study employed strategic and managerial questionnaires involving 308 medium-sized private hospitals in Indonesia and LISREL 6.0 was used for the analysis. Findings indicated that strategic agility did not mediate dynamic managerial capability for strategic renewal. Moreover, the private healthcare sector was found to be influenced by pressures to imitate other hospitals and competitors, and digital readiness had a stronger mediating effect than strategic agility. The study enriches organization theory by investigating institutional pressures driving strategic renewal. It also enhances the literature on strategic management by exploring the mediating role of strategic agility and digital readiness in strategic change. Lastly, it highlights the association between digital readiness and managerial and organizational aspects resulting from strategic change and further emphasizes the need for integrated teams and digital health services in hospitals to achieve strategic renewal.

Supply chain resilience: When the recipe is more important than the ingredients for managing supply chain disruptions

Over the past two decades, considerable research has focused on enhancing supply chains' capacity to cope with disruptions. Consequently, the concept of supply chain resilience (SCRE) has emerged, with the prevailing view that building resilience into the supply chain effectively manages disruptive events. However, given the concept's nascent state, little is understood about the processes through which a supply chain becomes resilient. This study employs fuzzy qualitative comparative analysis (fsQCA) to explore the configurations of managerial and organizational capabilities that contribute to improving the resilience of supply chains against both high- and low-impact disruptions. It identifies four key “recipes” that combine different resilience antecedents to enhance supply chain resilience. The findings illustrate how various combinations of organizational and managerial antecedents of SCRE, as suggested by the dynamic capabilities theory and its extension, the dynamic managerial capabilities theory, operate to build supply chain resilience. Additionally, the study demonstrates that principles of complexity theory—namely, asymmetric relationships, equifinality, and causal complexity—are integral to developing SCRE.

The effect of institutional pressures and dynamic managerial capability on strategic renewal: The case of strategic agility and digital readiness as mediators in healthcare industry

This research investigates the role of institutional pressures, dynamic managerial capabilities, strategic agility and digital readiness as mediating factors in the gap of the healthcare sector's post-pandemic digital transformation. This study employed strategic and managerial questionnaires involving 308 medium-sized private hospitals in Indonesia and LISREL 6.0 was used for the analysis. Findings indicated that strategic agility did not mediate dynamic managerial capability for strategic renewal. Moreover, the private healthcare sector was found to be influenced by pressures to imitate other hospitals and competitors, and digital readiness had a stronger mediating effect than strategic agility. The study enriches organization theory by investigating institutional pressures driving strategic renewal. It also enhances the literature on strategic management by exploring the mediating role of strategic agility and digital readiness in strategic change. Lastly, it highlights the association between digital readiness and managerial and organizational aspects resulting from strategic change and further emphasizes the need for integrated teams and digital health services in hospitals to achieve strategic renewal.

Navigating institutional pressure: Role of dynamic managerial capabilities and strategic agility in healthcare organizations’ renewal

ABSTRACT This paper aimed to analyze healthcare organizations’ pressures regarding digitalization caused by uncertainties after the pandemic. The study investigates the relationship among healthcare organizations‘ institutional pressure, dynamic managerial capabilities (DMC), strategic agility, and strategic renewal, focusing on selected private hospitals in Indonesia. Top executives and managerial personnel responded to our survey within five months before the investigation. Data were analyzed using partial least squares structural equation modelling (PLS-SEM) with hierarchical component models (HCMs). The study found that institutional pressures positively impacted strategic agility, whereas DMC strengthened the connection between institutional pressure and strategic agility. This study also indicates that strategic agility influences strategic renewal positively.

A comprehensive mixed-methods study on cross-border e-commerce SMEs, digital transformation and dynamic managerial capabilities

The development of the digital trade ecosystem heavily relies on the expansion of cross-border e-commerce (CBEC) platforms. CBEC companies are actively involved in digital transformation (DT) initiatives to bolster their core competencies and market share. E-commerce has experienced rapid growth in recent years, particularly since the global market faced significant disruptions due to the COVID-19 pandemic in 2020. As the market continues to globalize, more Chinese entrepreneurs are shifting their focus towards the international arena. They aim to increase investments in high-tech productivity within their organizations while also concentrating on enhancing their dynamic managerial capabilities to drive transformation within cross-border e-commerce companies. Therefore, the current study examines how organizational DT impacts the management capabilities of Chinese cross-border e-commerce managers from the perspective of dynamic managerial capabilities. The research employed a mixed-method approach. Firstly, a bibliometric analysis was conducted using VOS Viewer and R studio. Data was collected from two databases, Web of Science and Scopus, to analyze publication trends across countries and identify journals with the highest number of publications and citations. This analysis aimed to provide a comprehensive understanding of the context of the subject. Secondly, seven in-depth interviews were conducted using purposive and chain-referral sampling techniques, drawing insights from CEOs based on their real-life experiences with organizational DT. The results of the study revealed that technology has led to the decentralization and flattening of organizational structures. Managers are increasingly using social platforms to connect with experts and potential collaborators. Furthermore, the study highlights the role of psychological support in bolstering dynamic managerial capabilities.

Transformational Leadership and Dynamic Managerial Capabilities in Public Sector Innovation

The study examines the role of transformational leadership and Dynamic Managerial Capabilities in public sector innovation, specifically in addressing the challenges of managing the livelihood eligibility of the community, including older people, in order to build an elderly-friendly community. The study focuses on the leadership of Jambi Mayor and Vice Major in employing innovation to realize Jambi as a Smart Living. This descriptive qualitative study aims to identify new information related to the transformational leadership and Dynamic Managerial Capabilities of the Jambi Government in innovating feasible urban living. The authors identified transformational leadership as a major style in carrying out innovation and dynamic managerial capabilities. The study found that Jambi City is continuously promoting the importance of creating smart living as one of the smart city indicators, especially in elderly-friendly cities, through the leadership of its mayor and vice mayor. Both initiated change by identifying challenges and opportunities, finding good examples of smart living, inspiring and implementing innovations, encouraging changes in how the bureaucracy works, and motivating civil servants to improve their attitudes and assumptions, especially toward health services for the elderly. The study concludes that leadership style and dynamic managerial ability to adapt to change contribute to the success of smart living innovation.

Entrepreneurs' dynamic managerial capabilities as a source of sustained competitive advantage for small and medium enterprises

Entrepreneurs' dynamic managerial capabilities as a source of sustained competitive advantage for small and medium enterprises

If You Want to Go Fast, Go Alone; If You Want to Go Far, Go Together. In Favor of a Partnership Approach to Directors of Incubators’ Dynamic Managerial Capabilities

On the cusp of the 2000s, the incubation industry had started to become competitive after 20 years of stability. The question of adapting incubators to this turbulent environment was now on the table. In this context, the aim of this article is to better understand the role of directors of incubators during the transformation process of their organizations. The concept of dynamic managerial capabilities is used as a means of responding to this gap. The capabilities of the directors of incubators were studied during a longitudinal multiple case study. The main contribution of this research is the partnership relationship built up by these actors to transform their organizations. The foundations of the directors’ dynamic managerial capabilities (cognition, human, and social capital) are then combined with the cognition, human, and social capital of their partners to seize opportunities: new incubation models that had been the subject of resistance to change within incubators.

Cognitive styles and dynamic managerial capabilities: implications for SMEs in a transition economy

PurposeThe dynamism of competition in international markets requires managers to react accordingly and ensure the firm's survival and competitiveness. This study examines the impact of cognitive styles and dynamic managerial capabilities (DMC) on a firm's international performance and the mediating role of these capabilities in the relationship between cognitive styles and international performance.Design/methodology/approachThis study adopts a quantitative cross-sectional research design, employing a sample of 306 firm owner-managers from exporting companies in Kosovo.FindingsThe findings suggest that managers' cognitive styles positively influence firm international performance, including their impact on DMC. Results also indicate that only managerial cognition mediates cognitive styles' effects on a firm's international performance, compared to managers' social capital.Originality/valueIn this study, the authors contribute to the literature by integrating cognitive styles with DMC in a transition country. Moreover, the authors demonstrate that DMC mediate the impact of cognitive styles on the firm international performance.

The interaction of actor-independent and actor-dependent factors in new venture formation: The case of blockchain-enabled entrepreneurial firms

AbstractThe study seeks to explore how blockchain technology enables the creation of new ideas for ventures and to examine the activities of founders and entrepreneurial teams in shaping those ideas. We adopted several theoretical frameworks – external enablers theory, dynamic capabilities (DCs), and dynamic managerial capabilities (DMCs) – to explain the interaction of the actor-independent and actor-dependent factors in the process of new firm formation. We analysed four Hungarian blockchain start-ups that operate across financial services, cryptocurrency trading, crypto asset management, energy, information technology, and identity industries and create high value-added and cross-industrial offerings for Hungarian and foreign markets. Using qualitative study research results, the study develops the model of external enablers, founders' and firm capabilities and new venture creation. We identify three interconnected external enablers – namely, market volatility associated with the growing popularity of cryptocurrencies and the underlying blockchain technology, the properties of blockchain, and the ideology behind the technology – and discuss the role of entrepreneurs' DMCs and sensing and seizing activities in discovering and shaping these enablers into profitable business ideas.

Without friction, no shine: how dynamic managerial capabilities combine for family firms’ digital transformation

Research shows that digital transformation (DT) of small and medium-sized family firms is a major challenge, where family dynamics introduce idiosyncrasies in how managers sense, seize, and orchestrate DT. In this study, we focus on those dynamic managerial capabilities that are closely related to individual cognitive traits - sensing and seizing – to understand how they operate at the individual level and how they interact at the team level in such a transformation process. We draw on an in-depth case study of the digital transformation of a family business, the largest independent fashion retailer in the Netherlands. Our microfoundational lens sheds light on the mechanisms through which familiness underpins dynamic managerial capabilities for DT. Specifically, we identify purposeful friction as an interpersonal capability that modifies individual managers’ sensing and contributes to the bridge between sensing and seizing. To complete the model, we identify collaborative value-based decision making and experimental implementation as team-level capabilities that underpin DT seizing. Our theoretical model contributes to the current literature by unraveling the microfoundations of how team-level interaction enhances individual managers’ sensing and seizing capabilities for digital transformation in the context of family firms.