Dynamic Managerial Capabilities Research Articles

Factors Affecting Islamic School Performance: Dynamic Managerial Capabilities of School Principals Influenced by Networking and Motivation

This study was conducted in the educational settings of the East Java Integrated Islamic School Network (JSIT), encompassing levels from Kindergarten to High School. This study examines the impact of dynamic managerial ability, spiritual motivation, and networking ability on school performance across all East Java Integrated Islamic School Network levels. To achieve the research objective, a mixed-methods approach, involving both quantitative surveys and qualitative interviews was employed. Empirical evidence revealed that the Principal's Dynamic Managerial Ability significantly influences School Performance. Furthermore, Spiritual Motivation has a notable impact both on the Principal's Dynamic Managerial Ability and directly on School Performance. In contrast, while Networking Ability does not significantly affect the Principal's Dynamic Managerial Ability, it does have a marked influence on School Performance. Additionally, Spiritual Motivation and Networking Ability significantly affect School Performance mediated by the Principal's Dynamic Managerial Ability.

How Dynamic Managerial Capabilities, Entrepreneurial Orientation, and Operational Capabilities Impact Microenterprises’ Global Performance

Microenterprises’ internal capability landscape and how it relates to the firms’ global performance (GP) is sparsely studied and understood. Discrete relationships between a capability and GP may have some empirical evidence, but how microenterprises’ capabilities quantitatively relate to each other and together to GP still had no answer. Our model investigates the impact of dynamic managerial capabilities (DMCs) and entrepreneurial orientation (EO) on operational capabilities (OCs), and of those on GP, moderated by competitive intensity (CI). The data were acquired in a survey by questionnaire to 402 Portuguese microenterprises and treated using covariance-based structural equation modeling. We confirm that DMCs and EO have a positive, statistically significant, and substantive impact on OCs, explaining over half its variance, where any relation to GP is fully mediated by OCs. Furthermore, we found that OCs hold a positive, statistically significant, and substantive impact on GP, explaining nearly a quarter of its variance. CI as a moderator, with a marginal effects analysis, shows limited significance in a short range of values and never any substantive significance. Our results highlight that, for a healthy microenterprise business ecosystem, a great deal of attention and capacitation must be given to microenterprises’ managers, specifically their DMCs, EO, and, eventually, OCs.

Microfoundations of sensing capabilities: From managerial cognition to team behavior

Scanning the environment for information about competitors, technology trends, or customer needs allows firms to sense opportunities and threats, which supports dynamic capabilities and helps firms remain competitive over time. There has been significant theoretical development on the cognitive antecedents of dynamic capabilities—so-called dynamic managerial capabilities. In this study, I propose a novel mechanism through which managerial cognition can scale to a collective level in support of sensing capabilities and consider how organizational design may influence this relationship. Specifically, I posit that high-construal managers engage in more environmental scanning than low-construal managers do, because their mental horizons are broader and encompass further alternatives, and that over time their behavior is modeled by their team. I also suggest that managers’ degree of task-related interdependence with peer managers across the firm influences the direction of this relationship, with low interdependence reversing it. I find support for my theory using multiple-source, time-lagged data gathered from 88 managers and their team, thereby offering key implications for theory and practice.

Top management team internal social capital, market dynamics and business model design: a dynamic managerial capability perspective

PurposeDrawing on the dynamic managerial capability perspective and the dynamic capability perspective of business model (BM) literature, this paper aims to investigate how top management team internal social capital (TISC) promotes BM design and how such effects are moderated by market dynamics (i.e. demand uncertainty and competitive intensity).Design/methodology/approachThe proposed hypotheses were tested by a questionnaire-based survey. The empirical study was conducted on a sample of 210 firms in China. The model was tested via hierarchical regression analysis.FindingsTISC has a positive effect on BM efficiency but an inverted U-shaped effect on BM novelty. The effects of TISC on BM efficiency and novelty are contingent on demand uncertainty and competitive intensity in different ways. Specifically, this study finds that demand uncertainty strengthens the inverted U-shaped effect of TISC on BM novelty. This study also finds that competitive intensity strengthens the positive effect of TISC on BM efficiency but weakens the inverted U-shaped effect of TISC on BM novelty.Originality/valueThe conclusion contributes to the dynamic capability perspective of BM literature in two ways. First, it offers a dynamic managerial capability perspective for understanding the antecedents of BM design. It highlights TISC, a root of dynamic managerial capability, as an important internal antecedent of BM design. Second, it provides a more nuanced understanding of the role of TISC in BM design. The findings show the distinct effects of TISC on BM efficiency and novelty. This study also discusses the contingency role market dynamics play in the TISC–BM design relationship.

DYNAMIC MANAGERIAL CAPABILITIES AND R&D SPENDING: THE ROLE OF CEO FOUNDER STATUS

Today’s hypercompetitive economy challenges chief executive officers (CEOs) to make complex yet integral investments in research and development (R&D). Although research has widely discussed R&D spending due to its implications for competitive advantage, it omits whether and how managers’ dynamic capabilities materialise in these long-term investment decisions. This study builds on dynamic managerial capability (DMC) theory to argue that strong managerial-level dynamic capabilities increase R&D spending by improving the capacities of CEOs to sense opportunities and threats, seize them, and reconfigure organisational resources. CEO founder status is additionally proposed as a moderator of this relationship, as founder CEOs differ from professional CEOs in their investment behaviour. The results reveal that DMCs only compositely contribute to R&D investments, while the DMC subcomponents–except for managerial social capital—exert no isolated effects. This study also finds that founder CEOs realise higher R&D investments through their DMCs than their professional counterparts.

Achieving Product Ambidexterity in New Product Development: The Role of Middle Managers' Dynamic Managerial Capabilities

AbstractWhile the concept of dynamic managerial capabilities was initially developed to understand top managers' strategic decisions, we theorize that it can explain how middle managers successfully contribute to functional outcomes. In this paper, we apply the dynamic managerial capabilities perspective and theorize that middle managers' capabilities to sense, seize, and reconfigure opportunities and assets, enhance product ambidexterity. We test our predictions with survey data obtained in two waves with a three‐year time lag and enriched with archival data from a sample of 185 German middle managers. Our results show that middle managers' general human capital (specialized education), structural social capital (managerial ties), and relational social capital (trust) are positively related to product ambidexterity, while their cognitive social capital (solidarity) is negatively related. We contribute by expanding the concept of dynamic managerial capabilities to middle management and provide insights into the underexplored relationship between middle managers' capabilities and functional product ambidexterity.

Globalization: Managing Cross-Cultural Diversity in Finance

Abstract: One notices an emerging trend among companies with global operations to seek culturally competent employees. Global competitive environments dictate the need for dynamic managerial capabilities relevant to multicultural working environments that will give an employer the much needed competitive edge over rival companies. Managers, including finance managers need the ability to negotiate and work within two or more cultures with equal ease in a multicultural environment. Managers with tactic cultural knowledge and competencies are pivotal to the global expansion plans of any company. Universities are taking up the task of creating internshipopportunities that offer such multicultural experiences to their students. This paper is based on the author’s learning experience and personal reflection of an internship in Vietnam analyzed through a lens of Australian university and had the opportunity to work with Vietnam’s largest insurance company (and seventh largest by market capitalization).

On the micro-foundations of corporate social responsibility: a perspective based on dynamic managerial capabilities

PurposeThis study proposes that the three core underpinnings of dynamic managerial capabilities (DMCs) – managerial cognition, managerial human capital and managerial social capital – represent individual-level micro-foundations that influence corporate social responsibility (CSR). It further explores the interaction mechanism between the three underpinnings in influencing CSR, and their influence depends on the technological turbulence caused by big-data-related technologies.Design/methodology/approachThis study uses a quantitative research method and partial least squares structural equation modelling (PLS-SEM) to test the relationship between latent factors based on a sample of 270 Chinese top managers.FindingsThe three core underpinnings of DMCs are positively related to CSR. Managerial human capital and managerial social capital mediate the relationship between managerial cognition and CSR. Technological turbulence's moderating effects are also tested. Specifically, technological turbulence amplifies the positive relationship between managerial cognition, managerial human capital and CSR but negatively moderates the relationship between managerial social capital and CSR.Originality/valueWhy are some firms more willing to participate in CSR than others mainly depend on the fact that the actual participants of CSR are the top managers who formulate strategies and implement CSR plans. This study, grounded in the DMCs framework and the upper echelons perspective, is arguably the first to link DMCs' three core underpinnings and CSR, and further explore the multiple drivers' mechanisms and boundary conditions. This study contributes to individual micro-foundation of CSR literature, and advances the understanding of whether and how top managers influence CSR engagement.

Seize the Day: Executive Thought Self-leadership and Heterogeneity Among Dynamic Managerial Capability Underpinning Cognitive Capabilities

Extant literature has established the importance of individual dynamic managerial capabilities to the enterprise level sensing, seizing, and reconfiguring capacities of an organization. Despite theorization that heterogeneity in executive thought processes and thinking disposition stands causal for the oft observed differences in managerial capability between executives, little is known about the individual level antecedents of this cognitive heterogeneity which ultimately influences the direction of the entire firm. In response to calls for future investigation into this critical gap, the present paper draws upon a micro-level theory heretofore underutilized in the strategic realm – self-leadership – to examine how executives’ cognitive processes impact their entire firm. In pursuit of this goal, the cognitive-based thought self-leadership theory is utilized to more thoroughly explain the drivers of heterogeneity among the underlying cognitive capabilities of managers’ crucial dynamic managerial capabilities. In this way, the present study theorizes how specific individual executive cognitive processes (thought self-leadership strategies – e.g., self-talk, mental imagery) can influence the firm-level strategic decisions of innovation and expansion and thus impact overall organizational performance, through the bolstering of individual cognitive capacities and resulting managerial capabilities.

Dynamic managerial capability portfolios in early internationalising firms

It is acknowledged that dynamic capabilities can underlie internationalisation of firms, yet extant research has tended to examine the role of capabilities in international entrepreneurship in separate studies, neglecting that international enterprises tend to develop different bundles or portfolios of capabilities that may have differing impacts on their internationalisation. Applying the concept of dynamic managerial capabilities, this study illustrates how different capability portfolios of entrepreneurial decision-making and network capabilities explain early internationalisation of small- and medium-sized enterprises (SMEs). Employing a machine learning method through artificial neural network (ANN) analysis, the findings show how early internationalisation is predicted by a portfolio of different dynamic managerial capabilities. This study thus contributes to the international entrepreneurship literature by outlining the capability portfolios necessary for early internationalisation and proposing a taxonomy for capability portfolios for early and late internationalising firms, by clarifying the role of dynamic managerial capabilities in early and successful entrepreneurial internationalisation and by introducing the ANN methodology as a useful tool in the research corpus of the international entrepreneurship domain.

When Passion Meets Expertise: The Effect of Social Entrepreneur Ambidextrous Orientation on Venture

Social entrepreneurs leading for-profit ventures often face the challenge of managing the tensions associated with the dual (social and economic) mission. While managing this tension effectively is considered essential for high performance, not all social entrepreneurs are equally capable to do so. To capture this discrepancy, we introduce a new construct (Social Entrepreneur Ambidextrous Orientation or SEAO) and empirically examine its impact on social venture performance. Drawing from dynamic managerial capability and organizational ambidexterity literatures, we propose that SEAO positively contributes to social venture performance. Furthermore, we argue that this relationship is stronger among firms with organic structure and operate in highly munificent industries. Our analysis of data from 246 U.S. social entrepreneurs provide support for our predictions. Implications for research and practice are discussed.

Emotion Regulation and Strategic Decision Making: A Depletion of Resources Perspective

A growing body of evidence shows that making strategic decisions is emotionally draining and requires managers to devote significant effort to regulating emotions. However, theoretical models of strategic decision have not kept pace with these developments and largely overlook the role of emotion regulation. In this paper, we adopt a resource depletion perspective to examine how executives’ emotion regulation capabilities influence strategic decision processes and outcomes in dynamic environments. We propose that executive emotion regulation resources are vital for developing and sustaining novel representations of strategic opportunities, searching for distant solutions, and utilizing social systems for evaluating and selecting alternatives. Hence, the depletion of regulatory resources inhibits these processes and reduces the effectiveness of strategic decision making. By identifying interdependencies among executive emotion regulation capacity and the cognitive and social resources required for strategic decision making, our analysis extends understanding of the requirements for making strategic decisions in dynamic environments. We discuss implications for research on strategic decision making, executive job demands and dynamic managerial capabilities.

Environmental dynamism, Digital Expertise of the Board and Strategic Change of the Firms

With the advent of recent environmental dynamics, firms are forced to change their strategies to survive. We examine the relationship between such environmental dynamism and method and scope of strategic change in a sample of 2527 listed US firms. Furthermore, since managers play a pivotal role in shaping the firm strategy, we also examine the professional background of the board by investigating the relationship between digital expertise and strategic change of the firms. Using resource dependence theory (RDT), we argue that internal factors of the firms can respond to the conditions of the external environment by determining the strategic change. Relying on dynamic managerial capabilities perspective, we conjecture that board expertise can impinge on the decision to change strategy. Our findings indicate that environmental dynamism and digital expertise of the board increase the strategic change, assessed through method and scope. However, such effect is likely to be attenuated by the digital expertise of the board. Our study advances research on strategic change by jointly using RDT and dynamic managerial capabilities theories and by shedding light on the determinants of strategic change. We then discuss the managerial and policy implications of our findings.

Let’s Talk About Senior Managers. Investigating Managerial Roles in Foreign Divestment Decisions

Global economy has been damaged severely by the pandemic, macroeconomics and geopolitical tensions, leading to a significant amount of foreign divestment made by several large multinational enterprises. This research delves into roles of top managers at headquarters in foreign divestment through their executive decisions. Adopting the dynamic managerial capabilities framework, we establish the linkage between global dynamic managerial human capital, social capital and managerial cognition on divestment probability. In addition, we examine if a turnover of a chief officer leads to foreign divestment decisions. We further investigate how the influences could be modified by cultural, economic and political differences. Accordingly, we fill the gap voiced by prior scholars about the striking omission of managerial roles in divestment studies and develop our understanding of the microfoundations of the dynamic capabilities. Several theoretical and practical implications have been also discussed in this study.

CEO transformational leadership and firm innovation: the role of strategic flexibility and top management team knowledge diversity

PurposeDrawing upon a dynamic managerial capabilities perspective, this study aims to unpack how and when chief experience officer (CEO) transformational leadership influences firm innovation. Specifically, a moderated mediation model linking CEO transformational leadership to firm innovation, which includes strategic flexibility as a mediator and top management team (TMT) knowledge diversity as a moderator, is theorized and empirically tested.Design/methodology/approachThe authors conducted a survey of 354 TMT members and 62 CEOs from 62 firms in China’s construction industry to explore these relationships. Path analysis using Mplus 7.4 was undertaken to test our proposed moderated mediation model.FindingsThe results revealed that strategic flexibility mediates the positive relationship between CEO transformational leadership and firm innovation. Additionally, TMT knowledge diversity positively moderates the relationship between CEO transformational leadership and strategic flexibility.Research limitations/implicationsTaken together, these findings help advance and deepen our understanding of the mechanisms through which CEO transformational leadership influences firm innovation and boundary conditions under which CEO transformational leadership influences strategic flexibility. At the same time, this study also contributes to the literature on strategic flexibility and the CEO-TMT interface by revealing the interactive effect of CEO transformational leadership and TMT knowledge diversity on strategic flexibility.Originality/valueAlthough the positive influence of CEO transformational leadership on firm innovation has been widely recognized, the specific mechanisms underlying this effect have yet to be fully theorized. This study proposes and tests a nuanced theoretical framework linking CEO transformational leadership to firm innovation via a firm’s strategic flexibility. It also argues that TMT knowledge diversity enhances the indirect effect of CEO transformational leadership on firm innovation through strategic flexibility; that is, this indirect effect is significant when TMT diversity is high, but not when TMT diversity is low.

More capable, more innovative? An empirical inquiry into the effects of dynamic managerial capabilities on digital firms' innovativeness

PurposeManagers play a critical role in shaping the development of firms due to the risky and long-term nature of innovation. Although the managerial effect on strategic change has long been factored into organizational theories, scholars still lack a complete understanding of the specific managerial capabilities that drive innovation in today's digital economy. The present study builds on dynamic managerial capabilities theory to close this research gap. The paper proposes managers' dynamic capabilities and their three underlying drivers – managerial human capital, social capital, and cognition – as a direct antecedent to digital firms' innovativeness.Design/methodology/approachThe study draws on survey data from German Industry 4.0 manufacturing firms, which were analyzed using regression analysis.FindingsThe results confirm managers' dynamic capabilities as facilitators of innovation. In contrast to previous research on nondigital industries, the findings demonstrate that only the complete portfolio of managers' dynamic capabilities promotes innovativeness in digital firms. The study provides evidence for the importance of dynamic managerial capabilities in the digital economy yet contradicts previous research on nondigital industries related to the advantageousness of managers' human capital, social capital, and cognition for innovation.Originality/valueThe study contributes to the literature by being the first to holistically test the effects of dynamic managerial capabilities on innovation in digital firms. The results offer a nuanced account of managers' dynamic capabilities, thereby expanding dynamic managerial capabilities theory to the digital economy.

Relationship between CEO’s strategic human capital and dynamic capabilities: a meta-analysis

In this paper we study the association between Chief Executive Officers’ strategic human resource capital, dynamic managerial capabilities, and firms’ dynamic capabilities. This study identifies the Chief Executive Officer (CEO) variables reported in the literature, and estimates the correlation of each CEO variable with the dynamic capabilities. In addition, the moderator effect of the three types of dynamic capabilities is estimated. This paper applies a meta-analysis using structural equation modeling by means of the three-level random-effects model on 446 correlations, which account for 52,767 CEOs around the world. The findings show a positive correlation of CEO education (ρ = .113), CEO personality (ρ = .162), and leadership styles (ρ = .306) with dynamic capabilities. In addition, dynamic managerial capabilities totally mediate the relationship between education and dynamic capabilities and partially the relationship of CEO personality and leadership styles with dynamic capabilities.

The role of dynamic managerial capabilities and organizational readiness in smart city transformation

This study focuses on the dynamic managerial capabilities of smart city managers and the organizational readiness of a city administration required to drive smart city transformation. After reviewing the literature, we conducted semi-structured interviews with smart city managers in 40 smart cities. We identified five dynamic capabilities that effectively contribute to smart city transformation: seizing, sensing, innovation, integrative, and empowering capability. Our analysis also reveals that a city administration's organizational readiness plays a critical role in these transformative processes and relies on four factors: innovation readiness, resource readiness, a participatory and collective mindset, and strategic readiness. Based on our findings, we suggest a theoretical framework composed of 10 propositions that describe the mutual influences of these dynamic managerial capabilities and organizational readiness factors, together with their contributions to smart city transformation. We conclude with a discussion of the limitations and the implications for future research and practice.

Kapabilitas Manajerial Dinamik Dan Kapasitas Organisasi Untuk Berubah Anteseden Dan Konsekuensi Dalam Meningkatkan Kinerja Organisasi Studi Empiris Pada Perguruan Tinggi Pelayaran Niaga

This study aims to build a conceptual model for improving organizational performance. The proposed model is based on dynamic managerial capabilities and organizational capacity to change. A structural study methodology was adopted using 200 samples taken from managers at Pelayaran Niaga colleges in Indonesia and data collected through questionnaires, to test the models and hypotheses in this study, the authors used Amos 25 as a data analysis tool. The results of this study indicate that there is a strategic path to improve organizational performance in public organizations, namely educational organizations at Pelayaran Niaga colleges in Indonesia, namely through a dynamic managerial ability path and then organizational capacity to change which can further increase organizational performance. This study has limitations such as not being able to define specifically about dynamic managerial abilities. In addition, the sample used is only limited to the Merchant Shipping College to represent public organizations. The results of this study are applied to strengthen the theory of change management theory of dynamic capabilities and organizational behavior. In addition, this research is also able to contribute to a practical level to provide recommendations for top managers, middle managers and lower managers in public organizations in order to be able to provide a form of performance improvement. organization based on organizational change and dynamic capabilities possessed by each manager in public organization.

Entrepreneurship through the lens of dynamic managerial capabilities: a review of the literature

AbstractIn a Schumpeterian economic model, dynamic capabilities (DC) help entrepreneurial firms create competitive advantages. However, advancing the construct of DC in entrepreneurship is hampered by the incompatibility of some key assumptions in entrepreneurial ventures. In this paper, we propose that dynamic managerial capabilities (DMC), which builds upon the DC perspective by drawing attention to the role of managers, is a better alternative in analyzing entrepreneurship research. We find support for our ideas in a systematic analysis of extant research. Our review highlights the evolution of DMC literature in entrepreneurship and traces its dominant intellectual structures. In concurrent analysis, we highlight the limitations of utilizing DC. Additionally, we shed new light on the emergence of organizational capabilities, and present new avenues for future research.