Firm Capabilities Research Articles

Research on risk assessment method of dust explosion in electrostatic powder coating firms

Due to the low ignition energy and high explosion pressure of the electrostatic powder coating used, the powder spraying industry is very susceptible to dust explosion. Based on the fundamental concepts of risk assessment and the actual procedure, this study develops a dust explosion risk assessment indicator system for electrostatic powder coating firms to address the shortcomings of existing dust explosion risk assessment methods in handling weight objectivity and information uncertainty. The index system includes three first-level indicators of dust explosion severity, possibility, and safety management, as well as 8 s-level indicators and 26 third-level indicators. The indicator weights are acquired using the Structural Entropy Weighting Method (SEWM), which increases the objectivity of the computing results. D numbers theory is used to handle uncertainty in expert evaluation data in the best possible way. Eventually, a thorough approach for evaluating the dangers of dust explosion in electrostatic powder coating operations is developed. It shows that the procedure is likely to produce assessment results that reflect reality. Therefore, the company's daily safety inspections are underpinned by on-site investigations and risk assessments of powder coating companies. The results are of great significance in improving the dust explosion prevention capability of firms.

Stimulating exploitative and exploratory innovation through transformational leadership and knowledge management capability: the moderating role of competitive intensity

PurposeGiven the importance of leadership practices and knowledge resources in fostering innovation capabilities of firms, the purpose of this study is to explore the influence of transformational leadership on exploitative and exploratory innovation via mediating role of knowledge management capability. This study also attempts to increase understanding of the appropriate mechanisms for firms to pursue innovation capability by examining the moderating mechanism of competitive intensity.Design/methodology/approachThis study utilized the structural equation modeling and cross-sectional design to test hypotheses in the proposed research model using survey data collected from 351 participants in 120 manufacturing and service firms.FindingsThe findings indicate that transformational leadership induces greater effect on exploratory innovation compared to its effect on exploitative innovation. The mediating role of knowledge management capability between transformational leadership and aspects of innovation capability is also supported. Especially, the influences of knowledge management capability on exploratory innovation capability are enhanced and depended on the degree of competitive intensity.Research limitations/implicationsFuture research should examine the mediating mechanisms of knowledge acquisition, knowledge sharing and knowledge application to provide deeper insight on the role of specific components of knowledge management capability in linking transformational leadership and innovation capability.Practical implicationsThe paper highlights the important role of transformational leadership practices for fostering knowledge management capability and specific aspects of innovation capability under high level of competitive pressure.Originality/valueThe paper is unique in the attempts to provide a prospective solution for firms to pursue and improve innovation based on the meaningful insights on the mediating role of knowledge management capability and moderating effect of competitive intensity in the relationship between transformational leadership and specific dimensions of innovation capability.

The Impact of Supply Chain Integration to Supply Chain Responsiveness in Chinese Electronics Manufacturing Companies

The aim of the current research was to explore the relationship between supply chain integration and supply chain responsiveness in the electronics manufacturing industry in Guangdong, China. The research model conceptualized supply chain integration (comprising business process integration, system integration, and activity integration) as a key resource impacting the capability of firms to respond efficiently to changing consumer demands and market conditions. This research utilized the questionnaire to gathered data from 420 supply chain management professionals from electronics manufacturers in China. The gathered data was analyzed using PLS-SEM, which allowed us to examine the relationships between supply chain responsiveness, business process integration, activity integration and systems integration. The results obtained were interpreted and discussed in the context of previous literature and theories. The study findings reveal a positive correlation between the three aspects of supply chain integration and supply chain responsiveness. Respondents agreed that business process integration (mean = 4.822, standard deviation = 1.825), system integration (mean = 4.965, standard deviation = 1.809), and activity integration (mean = 5.243, standard deviation = 1.792) were essential determinants in developing supply chain responsiveness. This indicates that a higher level of integration in these areas can significantly enhance a firm’s ability to respond quickly and effectively to changes in the market. These findings are consistent with prior research, suggesting that these forms of integration are critical for supply chain performance. In the context of the electronics manufacturing industry in China, this research further validates the importance of these variables. Business process integration is first investigated as the determinant of supply chain responsiveness, especially in the electronics manufacturing companies of China. This study is, to the best of the authors’ knowledge, one of the first to investigate the link between business process integration and supply chain responsiveness. Meanwhile, it is also seen as the new test of examining the influence of system and activity integration on supply chain responsiveness in the current business environment. The truth from the data analysis illustrated that even in the new business environment, both integration constructs (system integration and system integration) could affect the supply chain’s responsiveness. The study’s results provide valuable insights for practitioners and policy-makers in the electronics manufacturing industry. By focusing on enhancing business process integration, system integration, and activity integration, firms can increase their responsiveness to the dynamic market environment, thus improving overall performance.

Innovation and competitiveness in the copper-mining GVC: developing local suppliers in Peru

Abstract Although Peru is one of the main producers of copper worldwide, the domestic industry has not yet fully taken advantage of the potential that the exploitation of this commodity offers. This paper explores the opportunities and challenges that Peruvian suppliers face in their insertion into the mining global value chain. Our analysis is based on a mixed-methods approach, combining both quantitative and qualitative primary and secondary sources, including semi-structured interviews with key actors in the Peruvian mining sector. Our findings suggest that the weak presence of Peruvian suppliers in a sector dominated by few foreign firms is due to global industry dynamics as well as the underdeveloped capabilities of local firms operating in a fragile local institutional setting. However, their opportunities for their insertion are primarily in areas where new solutions are required, which places a demand on the supplier’s innovative capacity.

Technology transfer services impacts on open innovation capabilities of SMEs

Given the limited R&D investments, small and medium enterprises (SMEs) need to orchestrate their innovation capabilities and remove technological bottlenecks properly. To enhance their possibilities and results from collaborative activities, they can refer to intermediaries that foster knowledge and technology transfer (TT) in an inter-organisational setting. This paper aims to study how the services provided by TT intermediaries can impact specific open innovation (OI) capabilities of firms acquiring these services. OI capabilities are distinguished into potential absorptive capability, realised absorptive capability, external identification and external commercialisation. We conducted an embedded case study research, with the TT services offered by AREA Science Park, the leading Italian Scientific and Technological Park, as the main unit of analysis. The analysis of the patterns of OI capabilities enhanced in eight SMEs advised by AREA revealed that the types of TT services provided by AREA could be grouped into specific packages, summarised in a resulting framework of impacts of intermediary TT services. The study results contribute to the interplay between TT and OI literature and are helpful for both TT intermediaries and SME managers in designing and selecting the services according to the capabilities they would like to enhance and the type of collaborative innovation they would like to pursue.

How firms support formal standardization: The role of alliance portfolio and internal technological diversity

Influencing formal standard setting through supporting the technical solutions advocated by leading firms is crucial for firms to make their technology become a part of the ecosystem of the dominant standards and to ensure market acceptance. Nevertheless, the problem is that potential supporters do not know how to improve their ability to support formal standardization. This problem is relevant because supporters are the majority of firms in technology ecosystems, failing to contribute to the standard may render firms irrelevant in future markets, and a low degree of support slows down standardization processes and hence technological innovation. Using the knowledge-based view of the firm, we hypothesize that the diversity of a firm's external alliance portfolio and internal technology base affects the firm's capability of supporting standardization. An analysis of panel data of 186 vehicle manufacturers in the Chinese automobile industry from 1999 to 2020 shows that the alliance portfolio diversity (APD) has an inverted U-shaped relationship with firms' ability to support formal standardization. A firm enjoys an advantage in supporting standardization when it maintains a technology base with highly related diversity but suffers a disadvantage when it is highly diversified across unrelated domains. Further, related and unrelated technological diversity steepens the slopes of the inverted U-shape relationship between alliance portfolio diversity and the ability to support standardization. This study extends standardization literature, adding new insight of knowledge-driven to the research on the antecedents of the firm capability to influence standardization.

Geopolitical risk and green outward foreign direct investment location choice: evidence from Chinese listed companies.

Green outward foreign direct investment (OFDI) has become an important driving force for sustainable economic and environmental development. However, increasing geopolitical risks (GPR) pose a critical obstacle to the green OFDI of multinational enterprises. Drawing upon international production eclectic theory, we explore the impact of GPR on the green OFDI of Chinese enterprises and discuss the moderating role of firms' green technological and political capabilities including different moderating effects of these types of capabilities in the Belt and Road Initiative (BRI) and non-BRI countries. Using the BvD Cross-border Investment database and annual reports of Chinese A-listed companies, we constructed a unique micro-firm overseas green project dataset in 2013-2020. Negative binomial models were used for empirical testing. The GPR has a significant negative impact on Chinese enterprises' green OFDI location choices. The impact intensity varies with the firms' green technological and political capabilities. In addition, compared with non-BRI countries, the role of firms' green technological capability in BRI countries is stronger, while firms' political capability is not significant. These findings expand research on the relationship between GPR and green development by emphasizing the differential impact of GPR on enterprises' green OFDI location choices under different firm capabilities and bilateral country relations.

Strategic orientation for Chinese firms in the digital economy: a business model process formalization perspective

ABSTRACT The widespread use of digital technologies has reshaped the resources and capabilities of firms, and changed the logic of value creation in their business models. Digitalization formed by relying on digital technologies, such as artificial intelligence, big data, and blockchain, has brought new opportunities and challenges to the business models of Chinese manufacturing firms. Based on the two types of strategic orientation (market orientation and entrepreneurial orientation), this paper investigates the relationship between market orientation (MO), entrepreneurial orientation (EO), and firm performance and the mediating effect of business model process formalization (PF). The study constructs the multiple paths of strategic orientation driving firm performance, and conducts an empirical test using a sample of 369 Chinese firms. The findings are as follows. (1) Both MO and EO can effectively improve firm performance, and the interaction term of the two orientations also has a positive effect on firm performance. (2) There are three different mediation paths for strategic orientation to improve firm performance: ‘MO→PF→firm performance’, ‘EO→PF→firm performance’, and ‘the interaction term of the two orientations→PF→firm performance’. (3) Among these three pathways, the indirect effect of ‘MO→PF→firm performance’ is the largest with an indirect effect of 12.29%, which is significantly larger than the effect of the other two pathways. These findings not only enrich the theories related to MO and EO, but also provide various options and management implications for Chinese firms to effectively carry out strategic orientation practices to implement business models in line with the digital economy.

Cultural Intelligence, Firm Capabilities, and Performance: The Case of German Subsidiaries in Malaysia

The extant literature shows that firm capabilities such as knowledge transfer and innovation are highly related to firm performance. How these relationships express themselves for foreign-based firms operating in global environments is less understood. The objectives of this study are as follows: (1) to examine the differential effects of knowledge transfer and innovation on the performance of German-based companies operating in Malaysia; (2) to determine if these relationships and effects operate via an “intervening variable” or mediator, in this case, competitive advantage; and (3) to determine if another latent variable (cultural intelligence) has an altering or “moderating” influence on the effects of innovation and knowledge transfer on competitive advantage. Analyses of the causal relationships are tested using a sample of 475 respondents working in German subsidiaries in Malaysia and applying a structural equation model. The empirical findings indicate that innovation and knowledge transfer are positively and significantly related to German companies’ overall performance, that these effects are mediated by competitive advantage, and that cultural intelligence interacts with innovation and knowledge transfer to affect the strength of the relationships between innovation (knowledge transfer) and competitive advantage.

The role of domestic-firm knowledge in international patent collaborations: evidence from Indian firms

In this paper, we analyse the role of international patent collaborations in the performance of domestic firms and how the relationship is augmented by the pre-existing capabilities of the domestic firms. Using data on Indian firms, we study patterns of co-invention by Indian firms and foreign partners. The results confirm the crucial role played by the absorptive capacity of domestic firms in enhancing benefits from patent collaborations. Strikingly, we find that the coefficient associated to foreign collaboration has a positive effect on performance only when complemented with previous innovative capabilities. The evidence we present in this work contributes to existing knowledge on the microeconomics behind the process of technological capability accumulation and catching up in developing countries.

Firm capabilities, use of Internet technologies and export performance: an empirical study of Polish exporters

PurposeThe objective of the paper is to examine the effects of firm capabilities on the use of Internet technologies, as well as the effect of the use of Internet technologies on export performance, by drawing from the resource-based view (RBV) and the information systems literature.Design/methodology/approachThe authors test their propositions by using structural equation modelling (SEM) for 165 Polish exporters from the industrial manufacturing sector.FindingsThe authors’ findings indicate that the use of Internet technologies is positively related to the possessed capabilities of the firms. The use of Internet technologies is in turn positively related to export performance. The authors also find partial evidence for the fact notion that these relationships are moderated by the technology intensity of the sector.Research limitations/implicationsFirms which develop capabilities utilizing Internet technologies are able to enhance both communication and distribution efficiencies which in turn improve the effectiveness of their international operations.Practical implicationsManagers, particularly in sectors with a higher technological intensity, can find these findings useful as the study indicates where they should allocate their efforts to manage various Internet technologies activities for better export performance.Originality/valueExisting literature has focused predominantly on the application of Internet technologies in the area of e-commerce. The authors go a step further in enhancing the understanding of digitalization in the business models of exporting firms by accounting for a broad variety of Internet-based technologies used by exporters.

The Response of CSR to Economic Policy Uncertainty: Evidence from China

The dynamics and instability of economic policies exercise considerable influence on firm behaviors. This study aims to explore the impact of economic policy uncertainty on the level of CSR that firms are engaged in and the heterogeneity of this impact across firms. Using a dataset of Chinese-listed companies from 2011 to 2019, which consists of 837 different firms and 4551 firm-year observations, the results show a negative response of CSR to economic policy uncertainty in China, which is mitigated by the political connections and resource slack that firms possess. These findings underscore the importance of a predictable business environment for CSR behaviors and the capability of firms to cope with uncertainty.

The influence of open innovation on the synergistic innovation capability of Chinese manufacturing firms: the mediating role of tacit knowledge acquisition

PurposeChina has climbed from 22nd in the Global Innovation Index Rankings in 2017 to 11th in the 2022 due to the transition of its manufacturing firms from assemblers to system integrators. This paper examines how firms can enhance their innovation capability through inbound and outbound open innovation.Design/methodology/approachThis paper applies both open innovation and a knowledge-based view and proposes a conceptual framework that encompasses innovation capability and the significance of tacit knowledge acquisition. A questionnaire was designed to collect relevant data from 139 Chinese manufacturing firms in six regions to test this framework.FindingsThe authors found that inbound open innovation has a stronger impact than outbound open innovation on synergistic innovation capability. The acquisition of skill-based tacit knowledge has a slightly stronger intermediary role between open innovation (no matter inbound or outbound) and synergistic innovation capability than cognitive tacit knowledge does.Practical implicationsFirms should improve external tacit knowledge acquisition efforts to generate new knowledge, inspire the innovation passion of employees and implement ambidextrous open innovation.Originality/valueThis paper makes a good first step to analyze the effect of ambidextrous open innovation on the synergistic innovation capability of Chinese manufacturing firms. It verifies the role of skill-based and cognitive tacit knowledge acquisition and provides new reflections on open innovation strategy in emerging economies, thus enriching open innovation and knowledge-based theories.

Implications of Capability Spillovers in Vertical Linkages for Heterogeneity in Firm Capabilities

Implications of Capability Spillovers in Vertical Linkages for Heterogeneity in Firm Capabilities

Sensing, seizing, and reconfiguring dynamic capabilities in innovative firms: Why does strategic leadership make a difference?

Despite existing evidence indicating that organizational learning positively influences dynamic capabilities, the complex and dynamic interplay of leadership in this process still remains incomplete. Organizational learning models note that leadership is embedded in the development of dynamic capabilities, and this research empirically investigates the interplay of organizational learning (exploitative and exploratory learning) and strategic leadership (transformational and transactional leadership) in developing dynamic capabilities (sensing, seizing, and reconfiguring). A survey questionnaire on a sample of 106 firms is carried out, and results of hierarchical linear regressions indeed reveal that organizational learning shows a direct or indirect influence on dynamic capabilities through transactional or transformational leadership, depending on the type of department. This study is an innovative attempt to distinguish different antecedents for each type of dynamic capability on the basis of the type of learning and strategic leadership involved.JEL classification: M12

Antecedents and performance implications of stakeholder understanding in green product innovation

When developing green product innovations, firms are often confronted with a complex system of interdependent stakeholders and their interests. This study focuses on the holistic understanding of stakeholder interests and introduces the organizational capability of stakeholder understanding, defined as the degree to which a firm understands its stakeholder system. In particular, this study empirically examined the antecedents and consequences of stakeholder understanding in a green product innovation context. Through a two-stage survey approach, data were collected from 181 innovation professionals working in United States based manufacturing firms. Using hierarchical regression analysis, hypotheses about antecedents and consequences of stakeholder understanding are tested. Results show that stakeholder understanding is higher in firms with high innovation orientation, and lower in environments with high complexity. Results also show that stakeholder understanding has positive effects on three types of firm performance: green performance, market performance, and firm innovativeness. In addition, results of piecewise linear regression reveal that only for firms that exceed the median level of green orientation there is a positive relationship between green orientation and stakeholder understanding. The study's implications are that stakeholder understanding is a relevant capability for firms that aim to develop better and greener product innovations. To obtain stakeholder understanding, firms should strive for innovation and excel in green orientation, because only for truly green firms, green orientation helps to develop stakeholder understanding.

Exploring the future of market driving: A dialogue with marketing thought leaders

Although theory points to the relevance of dynamic capabilities in firms that seek to drive new markets, we lack a clear understanding of how firms can develop and apply such capabilities. In this paper, we draw on a seven-step quasi-Delphi study to discuss how market-driving companies should conduct market-sensing, −seizing, and -transforming activities. We identify important research gaps related to determining needs in market sensing, making “big bets” versus taking small, incremental steps in market seizing, and individual versus collective market-driving activities in transforming markets, and on the role of agility and resources in market-driving activities. We propose an integrated research agenda to address these gaps and advance exploration of the market-driving phenomenon.

Exploring Factors Influencing Technological Capability of Food Manufacturing Firms in Malaysia

Malaysian manufacturing firms play an important role in the country’s social and economic development. However, the industry faces challenges in productivity and competitiveness due to rapid globalization and economic instabilities affecting countries worldwide. To address these challenges, technological capability has become an essential requirement for a firm’s technological progress to remain sustainable and competitive. This study aims to identify factors that influence the technological capability of food manufacturing firms by using a questionnaire. Using IBM SPSS Statistics 27, exploratory factor analysis (EFA) was employed to examine the dataset obtained from the survey and analyze the factors that contribute to a firm’s technological capability. Overall, firms are influenced by knowledge management, organizational learning, and organizational innovation in their technological capability development. By understanding these factors, firms can develop their technological capability and further improve their productivity, ultimately achieving a sustainable competitive advantage in the market.

CONCEPTUAL FRAMEWORK ON MARKET ORIENTATION AND PERFORMANCE OF SMEs: ALLIANCES AS MEDIATING

Firm capabilities become important to SMEs' performance in expanding to foreign markets. Many countries focus on helping these SMEs because of the rapid internalization of competitors. This paper aims to propose a conceptual framework by identifying the determining factor that affects the international performance of Malaysian SMEs. Two capabilities that have determined the international performance of SMEs are market orientation and alliances. This framework was developed based on an extensive literature review. According to the proposed framework, alliances mediate the relationship between market orientation and international performance. Few studies have attempted to investigate the market orientation on international performance with mediating effect of alliances on international performance, especially in developing countries. This paper suggests that future researchers need to pay extra attention to the international performance of SMEs in emerging markets, including Malaysia.

Cultural intelligence as a predictor of organizational outcome

Since its introduction less than two decades ago, cultural intelligence (CQ) has emerged as a new field of research against the backdrop of globalization to advance our understanding of the required capabilities for individuals and firms to function effectively in contexts characterized by cultural complexity. Despite its recognition as an independent factor within a multi-loci framework of intelligences influencing individual and organizational outcomes, CQ’s nature and conceptualization on the three levels of analysis currently identified are still ambiguous. Consequently, CQ’s associations with proposed outcomes are also undertheorized. Upon a review of the literature, this paper will advance three main arguments, First, aside from the original individual level, clarification is required for CQ on the team and firm levels as to whether it is a collective manifestation of individual CQ or something entirely different. Second, organizational outcomes related to CQ have not been fully imagined, particularly in the contexts of transformations of organizational structures and leadership configurations in the modern economy. Third, the current theoretical framework and future research agenda can be enriched by adding an ethical dimension and a meta-firm level of analysis.