Organizational Dynamic Capabilities Research Articles

The role of corporate parenting strategy: Managing complexity and fostering performance in the multi-business unit

This literature review explores the integrated propulsion strategy, a comprehensive corporate parenting model that reconciles industrial organization (IO) theory, resource-based view (RBV), and dynamic capabilities (DCs) in strategic management. The framework, encapsulated through positioning, picking, and propulsion, seamlessly integrates external threats, internal resource combinations, and perpetual capability renewal. It accentuates the strategic significance of resource redeployment, primarily through mergers and acquisitions (M&As), as a dynamic response mechanism to external pressures, contributing to sustained competitive advantage (CA). The study advocates for supra-dynamic managerial capabilities in the post-pandemic landscape, surpassing traditional skills vital for navigating perpetual change, fostering stakeholder engagement, and driving innovation. Within the multi-business unit paradigm, the research proposes a framework elucidating the intricate relationships between business units and business models, providing insights for effective complexity management. The research integrates performance management metrics, encompassing sales growth, product quality, innovativeness, environmental, financial considerations, and practical guidance for corporations to formulate adaptive corporate parenting strategies, ensuring sustained growth in the dynamic business environment. The research seeks to provide a holistic corporate parenting strategy development to assist organizations in navigating complexity, responding to external pressures, and enhancing performance across their diverse business units, thereby contributing to the broader discourse on strategic management.

Improving Health Clinic Performance through the Role of Entrepreneurial Leadership and Dynamic Capabilities

This study aims to analyze the effect of entrepreneurial leadership on organizational performance by considering the mediating role of dynamic capability in the context of the digital era. This study employs a quantitative approach utilizing structural equation modeling (SEM) based on Partial Least Squares (PLS). A survey was used to gather data from 385 respondents from top management or owners of Small and Medium Enterprises (SMEs) Healthcare Clinics in Indonesia. Data was processed using SmartPLS software version 3.0. The results showed that entrepreneurial leadership has a positive and significant influence on dynamic capability (path coefficient = 0.777; t-statistic = 26.792; p = 0.000), entrepreneurial leadership has a positive and important impact on organizational performance (path coefficient = 0.306; t-statistic = 5.232; p = 0.000), dynamic capability has a positive and significant influence on organizational performance (path coefficient = 0.510; t-statistic = 8.994; p = 0.000),. In addition, dynamic capability acts as a mediator that strengthens the influence of entrepreneurial leadership on organizational performance, highlighting the importance of adaptation and innovation to face the challenges of the digital era. This study provides insights for clinical SME leaders to develop entrepreneurial leadership skills that can drive the organization's dynamic capabilities and improve performance amid the dynamics of the digital era. This study contributes to the literature on entrepreneurial leadership and dynamic capabilities by highlighting their relationship to organizational performance in the context of SME Clinics in digital transformation.

Can Symbiotic Relationship Promote Green Technology Innovation of Agricultural Enterprises? A Study Based on the Empirical Evidence of Chinese Agricultural Listed Companies

Agricultural green innovation has become a key driver of China’s agricultural development in the modern era. Maintaining a strong symbiotic relationship is crucial for enhancing awareness and resource allocation capabilities related to green technology innovation within enterprises, ultimately fostering green development. This study utilizes balanced panel data from Chinese agricultural listed companies in the Shanghai and Shenzhen stock markets between 2011 and 2020 to investigate the impact of symbiotic relationships on green technology innovation capability. Through empirical testing and a moderated mediating effect model, the research explores how organizational green awareness and dynamic capabilities influence this relationship. The findings indicate that a positive symbiotic relationship can significantly enhance green technology innovation in agricultural enterprises by improving their green cognition and dynamic abilities. In terms of the heterogeneity of the promotion of green technology innovation by enterprise symbiosis, the symbiotic relationship has a significant direct promotion effect on both progressive and joint green technology innovation. By confirming the effectiveness of firm symbiosis in promoting green technology innovation, this study provides new practical guidance for developing countries on how to promote the development of green technology innovation.

Building a framework for dynamic organisational capabilities in design for safety (DfS) for Malaysian construction organisations

Purpose Despite the growing construction subject of Design for Safety (DfS) in Malaysia, little effort has been made to understand the construction organisational DfS capability in a dynamic environment. This study aims to propose a framework for dynamic DfS capabilities for construction organisations in Malaysia. Design/methodology/approach A quantitative research methodology was used for this study. Data were gathered from three hundred and six (306) practitioners from diverse construction organisations, including government agencies, consultants, contractors and developers in Malaysia, using an online questionnaire survey during four online DfS webinars. Descriptive and inferential analysis, as well as content analysis techniques, were used to analyse the collected data. Findings Analysis of the survey data showed that all six key DfS organisational capability elements identified in the literature, which the respondents were required to assess, have a strong influence on determining the DfS capabilities of construction organisations. The elements ranked as most influential include DfS knowledge of the designer; DfS experience of the designer; Top management’s commitment to DfS; Design risk management; and Project review. Based on these findings, a framework for dynamic DfS organisational capabilities is proposed. This framework incorporates four essential capabilities – sensing, learning, integrating and coordinating – and is anchored by the aforementioned six key elements as foundational to deriving value from DfS practices. Practical implications The proposed DfS organisational capabilities framework will facilitate construction organisations’ focus on the dynamic environment while striving for successful DfS practice in construction projects. Originality/value This study extends the DfS literature in the construction context by providing deeper insights into the conceptualisation of dynamic DfS organisational capabilities where DfS regulatory framework is still evolving. This study also highlights organisations’ importance in perceiving and prioritising their abilities to sense changes, learn and internalise new competencies, integrate resources and coordinate activities, reflecting their unique strategic focuses and operational needs toward DfS practice.

UNDERSTANDING THE ROLE OF ARTIFICIAL INTELLIGENCE IN THE CONTEXT OF SMEs

This study provides a systematic review of the literature on the operationalization of artificial intelligence (AI) within small and medium-sized enterprises (SMEs), aiming to develop an integrated conceptual framework for understanding AI adoption. The findings indicate that Technological readiness plays a pivotal role, with SMEs requiring knowledge of AI applications, methods, and capabilities to adopt AI effectively. AI adoption yields diverse outcomes, including enhanced operational efficiency, improved customer engagement, and greater innovation, but these vary based on industry, firm size, and resource capacity. The study emphasizes that AI is not a unitary concept but a multi-dimensional construct, with operationalization requiring alignment with organizational dynamic capabilities. This review offers a framework for understanding AI adoption, helping to bridge fragmented findings in the literature.

Unveiling the antecedents of sustainable performance: Insights from hospitality industry managers

The hospitality industry faces significant challenges in achieving sustainable performance, particularly amidst a rapidly changing market and environmental uncertainties. Unfortunately, previous studies have paid limited attention to this specific aspect of performance. This study explores the antecedents – organizational resilience, dynamic capabilities, agile leadership, and organizational ambidexterity – that contribute to sustainable performance among managers in this sector. A self-administered electronic questionnaire was used to collect primary data from 210 hotel managers at various levels in Makassar, Indonesia, following a purposive sampling approach. The relationships were analyzed using partial least squares structural equation modeling (PLS-SEM) with SmartPLS 4.0. The results indicate that organizational resilience and agile leadership significantly influence sustainable performance, while dynamic capability and organizational ambidexterity do not show a significant impact. Furthermore, both organizational resilience and dynamic capability are significant to organizational ambidexterity, and they also significantly contribute to agile leadership. These findings illuminate the critical determinants affecting sustainable performance in the hospitality sector, providing valuable insights for practitioners and policymakers aiming to enhance sustainability practices in the industry.

Artificial intelligence, dynamic capabilities, and corporate financial asset allocation

The integration of artificial intelligence (AI) into corporate operations has revolutionized financial decision-making processes, yet our understanding of how AI adoption specifically impacts financial asset allocation remains limited. While existing research has explored AI's role in various financial applications, there is a critical gap in empirically examining the relationship between AI adoption and corporate financial asset allocation, particularly in understanding the organizational capabilities that enable firms to effectively leverage AI technologies. This study investigates this relationship using panel data from 25,811 firm-year observations of Chinese A-share listed companies (2008–2022). Through comprehensive regression analyses, we find that AI adoption significantly enhances corporate financial asset allocation efficiency, with this relationship being distinctly moderated by organizational dynamic capabilities. Notably, absorptive capability exhibits the strongest moderating effect, followed by innovative and adaptive capabilities. These findings advance our understanding of AI's role in corporate finance by demonstrating that the success of AI implementation in financial decision-making is contingent upon firms' underlying organizational capabilities. The results provide valuable insights for managers and policymakers in developing targeted strategies to enhance the effectiveness of AI adoption in corporate financial management.

The Duality of Technological Innovation and Dynamic Capabilities: The Micro-Foundation of China's Construction Machinery Industry's Rise up the Global Value Chain

In the context of global value chain reconstruction, Chinese construction machinery enterprises are facing the dual challenges of technological innovation and global competitiveness improvement. Based on organizational learning theory and dynamic capability perspective, this study constructs a theoretical framework of dual integration of technological innovation (exploratory innovation and pioneering innovation) and dynamic capability, and explores its impact mechanism on the global value chain upgrading of Chinese construction machinery enterprises. The study adopts a mixed research method, combining large-scale patent data analysis and in-depth case study, and constructs a longitudinal data set of 146 Chinese construction machinery enterprises from 2005 to 2022. By using structural equation modeling, dynamic panel regression and machine learning algorithms, this study reveals the following main conclusions: (1) The relationship between technological innovation duality and the global value chain position of enterprises is inverted U-shaped, and there is an optimal equilibrium point; (2) Dynamic capabilities partially mediate the relationship between technological innovation duality and global value chain climbing, among which absorptive capacity and reconstruction capacity are particularly critical; (3) The degree of internationalization of enterprises positively moderates the impact of technological innovation duality on dynamic capabilities; (4) The quality of the institutional environment moderates the relationship between technological innovation duality and dynamic capabilities, and a high-quality institutional environment strengthens the positive relationship between the two. The theoretical contributions of this study are: (1) it expands the global value chain theory and incorporates the duality of technological innovation into the analytical framework; (2) it reveals the mediating mechanism of dynamic capability theory in innovation and value chain climbing, enriching the dynamic capability theory; (3) it provides new empirical evidence for organizational learning theory and clarifies the dynamic process of exploration and utilization equilibrium. At the practical level, the research results provide guidance for engineering machinery companies to formulate innovation strategies and enhance global competitiveness, and also provide a basis for the government to formulate industrial upgrading policies. Future research can further explore the long-term evolution path of technological innovation duality and its differences in cross-cultural contexts.

The Impact of Organizational Resources on Organizational Agility in Hospitality Industry: A Dynamic Capabilities Approach

ABSTRACTThe present study investigates the relationship between organizational resources (financial, social, and technological capital) and dynamic capabilities development in crises periods. Through quantitative research, a theoretical framework that is based on resource‐based view and dynamic capabilities view is validated for the first time in the hospitality industry. In practice, it is explored whether the hospitality firms—based on their own resources—can develop the dynamic capability of organizational agility that enables them to cope with turbulent and unstable environments. The empirical research was conducted with the sample of 502 hospitality firms in Greece during the COVID‐19 era. The findings confirm that financial and technological capital have a positive influence on the development of agility‐related dynamic capabilities, and specifically market capitalizing agility and operational adjustment agility, for the hospitality industry during turbulent periods. Instead, social capital has a negative and no effect respectively on these two dynamic capabilities.

Digital technology adoption and radical and incremental innovations: evidence from the Chinese wind power industry

PurposeDigital technologies open up unprecedented opportunities for the Chinese wind power industry to make rapid and comprehensive decisions. However, the relationship between digital technology adoption and radical and incremental innovations has not been empirically assessed. In addition, reconfiguration capability is the ability of firms to transform and respond to changes. How such an organizational capability influences the effectiveness of digital technology adoption is a black box. In response, this study aims to assess the relationship between digital technology adoption and radical and incremental innovations in the Chinese wind power industry and elucidate the moderating role of reconfiguration capability.Design/methodology/approachBased on the data of listed companies in the Chinese wind power industry from 2006 to 2020, this study constructs regression models and validates the hypotheses.FindingsThe correlation between digital technology adoption and incremental innovation in the wind power industry in China is significantly positive, but the relationship between digital technology adoption and radical innovation is not significant. In addition, reconfiguration capability significantly enhances the incentive effect of digital technology adoption on incremental innovation.Originality/valueTo the best of the authors’ knowledge, this study is one of the earliest to explore the heterogeneous relationships between digital technology adoption and radical and incremental innovations in emerging economies, advancing the theoretical insights into how digital transformation can foster different categories of technological innovations. Moreover, this study embeds dynamic capability theory into digital transformation research by exploring the boundary conditions for the effectiveness of digital technology adoption from the perspective of organizational dynamic capability, thereby expanding the boundaries of existing knowledge.

Operationalizing responsible AI principles through responsible AI capabilities

AbstractResponsible artificial intelligence (RAI) has emerged in response to growing concerns about the impact of AI. While high-level principles have been provided, operationalizing these principles poses challenges. This study, grounded in recent RAI literature in organizational contexts and dynamic capability theory, and informed by literature on RAI principles and expert interviews in organizations deploying AI systems, (1) problematizes the high-level principles and low-level requirements and underscores the need for mid-level norms by adopting dynamic capability as a theoretical lens, and (2) develops five themes to capture firms’ RAI capability, including (i) understandable AI model, (ii) bias remediation, (iii) responsiveness, (iv) harmless, and vi) common good. As our contribution to the field of information systems (IS), this study extends the emerging literature on operationalizing RAI and dynamic capabilities, empirically elucidating the capabilities needed by firms. For IS practice, we provide organizations deploying AI with novel insights to aid in the responsible implementation of AI.

Incongruities in Innovation: Exploring Inconsistencies in Business Innovation Strategies

This research explores the phenomenon of incongruities in business innovation strategy through a systematic literature review. Analysis of the current literature reveals different types of incongruities, their causal factors, and their impact on innovation performance. Findings show that strategy-implementation gaps, culture-innovation misalignment, and resource allocation inconsistencies are the most common types of incongruities. Factors such as short-term performance pressure and resistance to change contribute significantly to the occurrence of incongruities. Their impact on innovation performance includes innovation portfolio imbalance and failure in radical innovation. Strategies to overcome incongruities include the development of ambidextrous leadership, balanced innovation portfolio management, and enhancement of organizational dynamic capabilities. This research highlights the importance of a holistic approach in innovation management and provides directions for future research.

Enhancing Service Innovation Performance of Hotels: The Role of Organizational Learning Culture and Dynamic Capabilities

Organizations are beleaguered by stiff competition, a dynamic market environment, and rapid technological changes that threaten the survival of businesses rambling to gain a competitive advantage. Past studies bring forth the role of innovation in services, crucial in driving tremendous growth in terms of economic activity. But, what contributes to innovation in services remains a sparsely researched area. The present study proposes a research model to examine the impact of organizational learning culture on service innovation performance in hotels with dynamic capabilities as a mediating variable. Structural Equation Modeling (SEM) is used for assessing the relationship between variables and validates the research model. The unit of analysis comprised individual employees working in four-star and five-star rated hotels located in the tourist-bound cities of Lucknow, Agra, and Varanasi in Uttar Pradesh (India). Empirical evidences support the positive role of dynamic capabilities in the relationship between organizational learning culture and service innovation performance thereby asserting the importance of developing distinctive capabilities for enhancing service innovation performance in hotels.

A TOE-DCV approach to green supply chain adoption for sustainable operations in the semiconductor industry

Semiconductor industry plays a critical role for the global economy. Semiconductor industry provides various necessary technologies such as IoT, AI, modern fabrication technologies and so on to various industries including automotive industry, electronic and communication industry, healthcare industry, construction and building industry, space industry, and so on. However, semiconductor supply chain experiences various supply chain related risks and challenges because of its procedural complexities, global supply chain integrations, government policy and regulations, competitiveness, technological complexities, and so on. Not many studies available which investigated the risk, resilience, and complexities regarding green supply chain adoption by semiconductor industry. In this context, the objective of this study is to examine the risks, resilience, and complexities for managing the green supply chain adoption for higher sustainability in the semiconductor industry. Utilizing the TOE framework (Technology-Organization-Environment) and DCV (Dynamic Capability View), we developed a research model to achieve this purpose. Subsequently, this model was validated through structural equation modelling, involving 356 respondents affiliated with the semiconductor industry. This study highlights that technological risk aspects comprising of technological turbulence and risk, compatibility and complexity, organizational dynamic capabilities, and resilience along with appropriate policy and regulations could help successful adoption of green supply chain management in the semiconductor industry.

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.

The Effects of Organizational Inertia and Dynamic Capability on Firm Performance: Business Model Innovation as a Mediating Variable at Small Industry of Rendang in West Sumatera

This study aims to explore the knowledge management challenges faced by Rendang IKMs in the context of organizational inertia as a barrier and unordinary competencies as antecedents to achieving superior performance in the domestic and global markets. At the same time, know the role of business model innovation in relation to the performance of the IKM business. The research analyzed data from 105 IKM Rendang in West Sumatra and found that despite being in a state of stagnation or inertia, these businesses can still generate profits. However, inertia must still be minimized by innovating. Meanwhile, the unordinary capability (dynamic capability) that dominates rendang entrepreneurs is absorptive capability, indicating that while SMEs have enough knowledge to understand tastes and market conditions, they struggle to transform this knowledge into viable companies. Business model innovation plays a vital role in reducing company stagnation and enhancing dynamic capabilities in implementation. Moreover, it can mitigate the risk of innovation failure, a fear often faced by rendang entrepreneurs, and provide space for converting knowledge into effective strategies and products

Exploring the effect of dynamic capabilities on operational excellence, moderated by environmental dynamism in the apparel industry

PurposeThe effect of dynamic capabilities on operational excellence and the moderating effect of environmental dynamism on the relationship between operational excellence and dynamic capabilities in the apparel industry in Sri Lanka were investigated while developing new psychometric scales to assess operational excellence and dynamic capacities constructs.Design/methodology/approachWe followed the exploratory sequential research design with a mixed-method research approach, aligning with the pragmatic research philosophy. Thus, both qualitative and quantitative research methods were followed.FindingsDynamic capabilities positively affect operational excellence, and environmental dynamism moderates the relationship between operational excellence and dynamic capabilities in the apparel industry in Sri Lanka such that when a higher environmental dynamism exists, a weaker positive relationship exists between dynamic capabilities and operational excellence. The two main dimensions of the operational excellence construct are continuous improvement of sustainable operational performance and sustainable competitive advantages. It empirically confirmed that sensing, seizing and reconfiguring capabilities are the three main dimensions of the dynamic capabilities construct.Research limitations/implicationsThis study was limited to the apparel industry in Sri Lanka. This research phenomenon should be explored in other industrial sectors worldwide to generalize the findings. The practitioners in the apparel sector may improve the organizational dynamic capabilities to achieve operational excellence and keep a strong positive relationship between dynamic capabilities and operational excellence in a highly dynamic environment if they address out-of-family situations with out-of-the-box thinking.Originality/valueWe generated two new empirical findings: (1) dynamic capabilities positively affect operational excellence, and (2) environmental dynamism moderates the relationship between dynamic capabilities and operational excellence. Also, we introduced validated new scales for assessing operational excellence and dynamic capabilities.

ORGANIZATIONAL RESILIENCE AND EMPLOYEE PERFORMANCE IN CRISIS ECONOMY

The aim of the study was to critically analyze the significance of organizational resilience on employee performance, especially during crisis situation, such as the recent Covid-19 pandemic that keep all the nations and business organizations in a state of chaos It could be seen that firms all over the world are crying wolf due to the loss of manpower, low profitability, low productivity, poor service delivery and so on, as a result of the Covid-19. The cause of the low performance could be attributed to not being pro-active by the employees, or non-anticipation of perturbations, inability to learn from experience, inability to adapt and dynamic capability to work in any given environment and changes in policies and programmes as the situation demand to achieve organizational sustainability. Therefore, organizational resilience is the ability of organizations to prepare, absorb shock or develop resistance in the face of perturbations within its environment, and surmount all insurmountable to move to a better next level. The study concluded that organizational learning, adaptive capacity and dynamic capability have significant relationship with employee performance. Hence, the study recommended that management should foster conducive organizational learning, adaptive capacity and dynamic capability, as these will equip the employees to remain with the organization, and put up their best work effort for increased productivity and profitability.

Sustainable business model innovation, dynamic capabilities, and organizational design: Insights from Norwegian aquaculture

AbstractFirms must increasingly grapple with complex sustainability challenges. Business model innovation is needed to achieve radical sustainability improvements. Recent research highlights the interrelatedness between business model innovation, dynamic capabilities, and organizational design, calling for empirical work to better illuminate these relationships. These connections are relevant in sustainability contexts, where organizational barriers and drivers have been shown to either facilitate or hinder the development of dynamic capabilities for sustainable business model innovation (SBMI). This paper presents a case study of an emergent low‐carbon offshore aquaculture value chain in Norway to illuminate the importance and roles of these organizational factors. Based on our analysis, we identify those barriers and drivers present in the Norwegian salmon aquaculture industry; add to the body of theory around organizational design, dynamic capabilities, and SBMI; and offer insights for practitioners in the aquaculture sector aiming to develop dynamic capabilities for SBMI.

Realization of an organization's dynamic capabilities in the system of strategic innovation management: theoretical and conceptual analysis

The study of innovation management in an organization at the strategic level becomes particularly relevant in the context of the evolution of the theory of strategic management from the resource-based to the post-industrial paradigm, as well as the focus on people, knowledge and experience as sources of innovation. The growing openness of organizations and innovativeness in the development of competitiveness create the need for a systematic approach to managing dynamic capabilities. As part of the theoretical analysis, the problems of a systemic view of innovation management in an organization are considered, as well as key trends in defining the concept of strategy in the context of resource-based and post-industrial theories. Namely, the definition of the concept of a system used is given and the signs of consistency in relation to innovation management are described: structuredness, interconnectedness, focus, integrity, self-development of the corresponding management systems. The concept of strategy is defined in terms of the strategic states and processes of the organization: as a result of innovation and operational processes, a transition occurs from past states to future ones. The necessary terms of the concept of dynamic capabilities are described. The results of the study, carried out, in turn, within the framework of the dissertation research, determine the role of innovation and strategic innovation management in the implementation of the concept of the organization's dynamic capabilities: innovation management implements high-level dynamic capabilities of the organization, and strategic innovation management implements the dynamic capabilities of the innovation management system. Based on the recursive transfer of structure, the controllable factors of endogenous strategies of innovation and strategic innovation management are considered. Namely, the content of products, core competencies, dynamic capabilities, organizational routines, resources and factors of production as controlled factors of endogenous strategies of innovation and strategic innovation management systems is revealed. The sequence of questions that make up the order of applying the results in practice is given. The main goal of applying the research results in practice is to identify and manage the primary sources of the formation and development of high-level dynamic capabilities of organizations.