Dynamic Capabilities Of Firm Research Articles

Impact of cross-border mergers and acquisitions on firm innovation performance: from the perspective of dynamic capability theory

ABSTRACT This study constructs an empirical framework from the perspective of dynamic capability theory, and uses a combined dataset of Chinese listed companies from 2008 to 2020 to test the causal impact of cross-border mergers and acquisitions (M&As) on firm innovation performance by using propensity score matching, time-varying difference-in-differences model and instrumental variable method. The findings are as follows: (1) Cross-border M&A has a significant promoting effect on the innovation performance of acquiring firms. (2) Heterogeneity analysis shows that traditionally less innovative state-owned, non-manufacturing, and non-high-tech enterprises experience notable enhancements in their performance through cross-border M&As. The post-M&A innovation performance of enterprises in central China is strong, followed by enterprises in eastern China, while enterprises in western China show limited improvement. (3) Among the internal factors of firm dynamic capability, knowledge breadth and managerial capability positively moderate the impact of cross-border M&As on innovation performance, while knowledge depth and financing constraints play a negative moderating role. (4) Among the external factors of firm dynamic capability, local knowledge externalities and regional trade resilience play a positive moderating role. This study highlights the importance of firm dynamic capabilities in the cross-border M&As process and provides new insights into innovation strategies in emerging economies.

Corporate Resilience and Dynamic Capabilities of Small and Medium-scale Enterprises in Yenagoa, Bayelsa State, Nigeria

This study ascertained the relationship between corporate resilience and dynamic capabilities of small and medium-Scale enterprises in Yenagoa, Bayelsa State. The researcher adopted a cross-sectional survey design. The study population consisted all registered small and medium- scale enterprises with the Ministry of Commerce, Trade and Investment in Bayelsa State and the Corporate Affairs Commission (CAC). Four hundred and sixteen (416) SMEs were selected. The sample size was determined using the Taro Yamane formula and a total of 204 participants made up the sample size. A structured questionnaire was designed to elicit data. The Spearman Rank Correlation coefficient was adopted to test the hypotheses with the aid of the SPSS version 24. The result revealed that corporate resilience had a positive and significant relationship with SMEs dynamic capabilities. The researcher concludes that corporate resilience is an important psychological quality needed by managers of SMEs to push through with emerging business challenges. Dynamic capabilities is a strategic management approach that sustains competitive advantage. Corporate resilience and firm dynamic capabilities can lead to SMEs sustained growth and effective performance. Thus, it was recommended that the management of SME’s should enhance its dynamic capabilities to sense market changes and encourage a persevering work behaviour to achieve business objectives despite overwhelming challenges in the market.

A Systematic Review of Resource-Based View and Dynamic Capabilities of Firms and Future Research Avenues

A Systematic Review of Resource-Based View and Dynamic Capabilities of Firms and Future Research Avenues

How environmental hostility, entrepreneurial orientation and dynamic capabilities are manifested to influence above-average export performance during the COVID-19 pandemic

PurposeThis study analyses how latent variables: environmental hostility, entrepreneurial orientation and dynamic capabilities are demonstrated in practice during the COVID-19 pandemic. Coming from mixed-method research, which is an explanatory sequential research design; this paper aims to provide only the qualitative, practical manifestations and validations of the variables previously tested and analysed quantitatively.Design/methodology/approachA case study approach was used whereby open-ended, semi-structured series of interviews was conducted to extract narratives from two owner–managers of medium-scale manufacturer-exporter agro-processing firms in the Philippines. Thematic analysis using deductive reasoning was used to analyse the collected narratives.FindingsThe analysis showed qualitative evidence of a possible intervention of entrepreneurial orientation and dynamic capabilities between the effects of the hostile environment brought about by the pandemic on the firms’ export performance. In addition, organisational resilience was observed to possibly moderate the relationship between the firm’s entrepreneurial orientation and dynamic capabilities. Resilience takes time (years) to develop; with an entrepreneurial behaviour, a continuous enhancement and acquisition of resources, capabilities, knowledge reflects a robust and adaptive organisation during adversity.Social implicationsThe role of education and research institutions was highlighted in the development of dynamic capabilities of firms. The entrepreneurial resilience, however, reflects the individual characteristic of the owner–managers that manifests in the firm’s overall posture toward the overall goal of protecting the industry from its downfall.Originality/valueQualitative evidences composed of direct experiences from key informants served valuable and contextual (Philippine agro-processing industry) validations to the theoretical relationships of variables being analysed.

The Role of Strategic Foresight on Dynamic Capabilities

Purpose: Strategic Foresight (SF) is required for an organization in facing Uncertainty, Complexity and Ambiguity environment to maintain relevant in future. Recently, researchers have argued that strategic planning (SP) can be considered a dynamic capability (DC) in organizations. Thus the purpose of this Paper is investigate the role of Strategic Foresight on Dynamic Capabilities of firms. Methodology: This theoretical effort presents a brief review and argues that Strategic Foresight is one of the micro-foundations of Dynamic Capabilities because it supports the seizing and continuous alignment of assets and resources. Under this perspective, SF has a role in the development and implementation of all organizational DCs and is not restricted to a DC specifically. Findings: The results show that strategic foresight is effective in creating dynamic capabilities. Originality/Value: Although scholars generally agree that companies require dynamic capabilities to flexibly respond to and shape uncertain environments, only little empirical research has been conducted on the factors that facilitate the development of these capabilities. This study addresses this gap and introduces strategic foresight as an important antecedent of firms’ dynamic capabilities.

Time Perspective, Firm Resources, and Dynamic Capabilities

Research on time has received significant and continued attention in the management domain. However, few management scholars have investigated subjective/psychological time (i.e., the individual and collective experience, interpretation, and perception of time), and the specific aspect of time perspective (TP). This is problematic because the (positive and negative) affective, cognitive, psychological, and temporal dynamics (investigated through the TPs) of decision-makers (e.g., CEOs, business unit managers) can lead to firm resources that are differently deployed and firm dynamic capabilities that are differently developed and, concomitantly with efficiency, yield benefits that vary in magnitude. We discuss the relevance and importance of studying TP in strategic management research and we develop propositions on how TP influences the deployment of firm resources and development of dynamic capabilities, challenging the overreliance on objective/clock time in strategy research. We develop TP-related theoretical and methodological implications for future research.

Impacts of big data analytics adoption on firm sustainability performance

PurposeThis study aims to examine the impacts of adopting big data analytics (BDA) on firm sustainability performance (FSP) mediated through firm financial performance (FIP) and operational performance (OPP).Design/methodology/approachA theoretical model is based on ideas from existing literature on BDA, sustainability, FIP, dynamic capability view theory and resource capability view theory. The model is then validated using the partial least squares–structural equation modeling technique with consideration of 312 responses from 24 Indian firms.FindingsThe study provides three important findings. First, there is a significant and positive impact of BDA on firms’ financial and OPP. Second, BDA significantly and positively impacts firm business process performance (BPP) and dynamic capabilities (DYC), which, in turn, significantly impacts the firm’s financial and OPP. Finally, both the financial and OPP of the firm significantly and positively impact sustainability performance.Research limitations/implicationsThis theoretical model is unique in showing the impacts of BDA on BPP, firm DYC, financial and OPP. The study also shows how BDA can enhance FSP by mediating through financial as well as the OPP of the firms. The study uses data only from India and thus the proposed model cannot be generalizable.Originality/valueThis study provides valuable input to researchers, academicians and industry practitioners on the importance of BDA for FSP. The study also adds value to the body of knowledge on sustainability, FIP and technology adoption. The proposed unique theoretical model has an explanative power of 70%, which is quite high and can be used across different industries.

A systematic review of innovation in family firms and future research agenda

PurposeIn this paper, the authors have used a systematic literature review methodology of 147 journal articles published in peer-reviewed journals. The analysis includes studies based on country of origin, the periodic proliferation of studies and the methodological design of the studies. As an outcome of the review, the studies are classified on the innovation in family firms under four broad categories – innovation input, family governance mechanisms, innovation output and the external environment. Some fruitful avenues of research are outlined in this domain.Design/methodology/approachThe literature on innovation in family firms – the most dominant and ubiquitous form of organization across the world – is gaining pace. The influence of family by way controlling ownership, management and governance on, and in interaction with business acts as a complex proposition that shapes the strategic decision-making in the family firm including innovation. The purpose of this paper, therefore, is to advance the understanding of innovation in family firms and provide a list of future research questions of theoretical and practical value.FindingsBased on this review, the authors provide future research directions pertaining to innovation in emerging economy family firms, effect of the institutional environment of family firm innovation as well family firms' innovativeness in the wake of pro-market reforms, different classes of ownership in family firms and innovation, family firm goal heterogeneity and innovation, and family firm dynamic capabilities and innovation.Originality/valueThe review provides a comprehensive understanding, trends and future research directions in the domain of innovation in family firms.

Dynamic Capabilities Revisited: Lessons from Logistics

Purpose: The identification of the premises concerning shaping and developing logistics capabilities towards firm dynamic capabilities. Design/Methodology/Approach: The article uses an analytical approach based on the results of previous studies. Findings: Logistics capabilities can be perceived and implemented as the strategic capabilities of a firm. As a result, logistics capabilities may aspire to become the dynamic capabilities of a firm. Practical Implications: Logistics capabilities aspiring to become the dynamic capabilities of a firm play an important role in achieving the firm success as well as the firm competitive advantage. Originality/Value: The article presents the significant importance of logistics capabilities perceived as the firm dynamic capabilities. The value of the article is manifested in the attribution of significant importance to logistics capabilities which play a crucial role in achieving the firm success, as well as in building and sustaining the firm competitive advantage.

CEO cognitive flexibility, information search, and organizational ambidexterity

AbstractResearch summaryAlthough prior research highlights the organizational and cognitive challenges associated with achieving organizational ambidexterity, there has been comparatively less empirical attention focused on the cognitive characteristics that may differentiate top managers of firms that achieve ambidexterity. We build on emerging research and identify cognitive flexibility as a cognitive characteristic with particular relevance to the challenges associated with ambidexterity and suggest that it works through chief executive officers (CEOs)' information search activities. We find that cognitively flexible CEOs are more likely to engage in effortful and persistent information search and rely to a greater extent on outside sources of information. In turn, effortful and persistent information search activities are associated with higher levels of organizational ambidexterity. Our study pushes forward the research agenda on cognitive micro‐foundations of firm capabilities.Managerial summaryAmbidextrous organizations, or organizations that have the capability to pursue both incremental and discontinuous innovation, enjoy more sustainable competitive advantages. However, the achievement of organizational ambidexterity poses unique demands for top managers, including cognitive challenges. To help managers better understand these challenges, this study focuses attention on the role of the CEO in the achievement of organizational ambidexterity, and on CEO cognitive flexibility as a potential influencing factor. Our results suggest that CEO cognitive flexibility may influence organizational ambidexterity indirectly through its effect on CEO information search activities, in particular where and how intensely CEOs search for information. Our study reinforces the importance of human factors in the executive office for the development of firm dynamic capabilities, and the implementation of an innovation‐based strategy.

Dynamic capabilities for SME participation in public procurement

PurposeAlthough small- and medium-sized enterprises (SMEs) play major roles in most economies in terms of job creation, innovation and contribution to national income, they are often underrepresented in public procurement markets. This paper aims to explore how the dynamic capabilities theory can improve SME participation in public procurement.Design/methodology/approachThrough a systematic literature review, the paper identifies common barriers to the effective participation of SMEs in public procurement and explores the applicability of the dynamic capabilities theory in addressing these barriers.FindingsA theoretical analysis was conducted to identify possible relationships between the factors reported in the literature as barriers to SME participation in public procurement and different components of the dynamic capabilities of firms (i.e. sensing, seizing, reconfiguring and learning). Seven key propositions were generated to guide future research.Research limitations/implicationsDespite its contributions, this paper is based solely on a systematic literature review and theoretical analysis. Future studies could use meta-analysis to review multiple studies relating to the nexus between SMEs and public procurement, hence improving methodological rigour.Practical implicationsThe paper contributes to the ongoing debate about whether and how SMEs can leverage their resources and capabilities to develop self-help strategies to improve participation in public procurement, an area yet underexplored in the literature.Originality/valueThis is one of the few studies examining the implications of firm-level capabilities of SME activity in public procurement markets. The findings may be beneficial to SME managers/owners, particularly regarding firms' ability to leverage resources and capabilities to participate effectively in public procurement.

Determinantes de la Venta Adaptativa como Capacidad Dinámica de las firmas

In recent years, the scientific community has deepened its research in the field of sales, exploring the characteristics and impact of adaptive sales on sales team performance, while in the discipline of strategic studies, the analysis and understanding of dynamic capabilities of firms as a mechanism to increase their competitiveness in changing environments, has also won a prominent place for both the academic and practical world. In this analysis, Adaptive Sale is exposed to different theoretical structural elements that distinguish it as ahigh-level Strategic Dynamic Capacity, incorporating characteristics that give it the potential to learn and accumulate skills from its internal competences in order to conduct itself in a flexible way through the dynamic changes of the environment. Throughout an integration analysis that exposes the similar characteristics of these seminal constructs, this review argues that the Adaptive Sale has, in a consistent manner with the definition of the theoretical framework of the Dynamic Capacities, three perspectives of approximation associated with the Life Cycle of Sales Management, in the general configuration of the firm's resources and in the specific nature of these capabilities, which translate into different cognitive abilities necessary to deploy behaviors and routines to detectopportunities and threats from the competitive environment. The article concludes that the Adaptive Sale, when considered as a dynamic capacity, has a role that projects it beyond a good practice of low order behavioral routines, constituting a mediating role of the Sales Orientations and with a clear impact in the management of the Sales Management to provide high value final offers that allow to achieve sustainable competitive advantages andsuperior performance.

Firm agency and global production network dynamics

ABSTRACTThe Global production networks (GPN) framework has been influential in the analysis of globally coordinated economic arrangements. However, research on GPNs tend to focus on a well-established industries and their existing governance structures with a very little attention to the temporality and changes in these networks and their governance structures. Specifically, despite the central role of ‘lead-firms’ in GPNs, the literature lacks a clear depiction of their competitive and evolutionary trajectory. In response, this paper is concerned with (re)opening the ‘black-box’ of firms and showing how lead-firms’ strategies and practices shape the evolutionary dynamics of GPNs. The paper argues that changing lead firm strategies play a crucial role in shaping the evolution of GPNs, reflecting changes in the industrial and/or business and institutional environments. The paper investigates the Danish, multinational energy company, Ørsted, and discusses the importance of accounting for firm dynamic capabilities, i.e. intra-firm practices and extra-firm (evolutionary) dynamic drivers, in analytical frameworks that analyse GPN dynamics and industries. Lead-firm strategies are shaped by firm-specific capabilities, industry-specific competitive dynamics, and institutions. Accordingly, GPNs’ evolutionary process can be understood as an adapting and/or response mechanism by lead-firms to changes in local and international business as well as multi-scalar institutional environments.

개인의 동적 역량이 조직유효성에 미치는 영향과 셀프리더십의 매개효과 : 국내 화학기업을 중심으로

Before the financial crisis of 1997 in Korea, many industrial sectors across the country have achieved remarkable economic growth since the 1970s because of the development of large-scale equipment industries such as civil engineering, steel, construction and chemical industries. However, after the financial crisis, the economic growth rate has slowed down. Also, the global recession and the rise of China in the global business environment have led to a long-term recession in the national industry as a whole. In current economic environment, it is not easy for the companies even having excellent resources to continue its competitive advantage. Moreover, the chemical industry, which has an influence as a basic industry of other industries, misses the point of transformation into a high value-added industry, as shown in previous research. In order to meet the rapidly changing global business environment, Korean chemical companies should have a dynamic capabilities which to rapidly reallocate and consolidate the resources and capabilities they possess. The dynamic capabilities to convert, rearrange and develop the resources possessed by the company in the direction of creating high added value and to promptly search for, absorb, transform and fuse newly required capabilities and resources should be continuously applied to Korean chemical companies. It is the core competence to secure competitive advantage. In order to secure the dynamic capabilities of the company, the dynamic capabilities of individual employees should be strengthened and employees should be able to demonstrate their own leadership so that they can proactively work and self-manage in a positive direction. Previous studies have focused mainly on the dynamic capabilities of firms. However, the competence of the human resources that make up the enterprise leads to the capabilities of the enterprise, and the human resources themselves are also important corporate resources. This paper focuses on the dynamic capabilities of individuals and strives to clarify the causal relationship between dynamic capabilities, self-leadership, and organizational effectiveness which have direct or indirect effects on management outcome. The reasons for choosing the chemical industry are based on the fact that a domestic chemical companies are in a long-term recession, and they lacks a innovation and value creation capabilities. Also, chemical industry has a large impact on the national economy.

Exploring the Role of Individual Level and Firm Level Dynamic Capabilities in SMEs’ Internationalization

This paper presents a multi-level model that examines the impact of dynamic capabilities on the internationalization of SMEs while taking into account the interactions among them. The purpose of the research is to understand the applicability of dynamic capabilities at the individual and the firm level to the SME internationalization process in developing country context and to assess to what extent a firm’s asset position and individual level dynamic capabilities influence the generation of firm level dynamic capabilities in SMEs. First, the dynamic capabilities theory was theoretically linked to the internationalization phenomenon. The relationships among firm-level dynamic capabilities, individual-level dynamic capabilities (owner specific dynamic capabilities), and internationalization were identified. The research framework and hypotheses were developed and empirically tested with 197 SMEs. The findings established that owner-specific dynamic capabilities have a positive influence on both firm dynamic capabilities and internationalization, and firm dynamic capabilities positively influence internationalization. It was also found that the market assets position measured as perceptual environmental dynamism positively influenced firm dynamic capabilities but structural and reputational asset positions of SMEs did not influence generation of firm dynamic capabilities. Moreover, firm dynamic capabilities had a mediation effect in the relationship between owner-specific dynamic capabilities and internationalization. Theoretically, this confirms the relevance of dynamic capability theory to internationalization and the possibility of integrating existing internationalization theories. Entrepreneurs, SME managers, and policy-makers could gain valuable insights on how entrepreneur and firm capabilities lead to better international prospects from this outcome.

Service Dominant Logic, Open Innovation Intermediaries and Innovative Capacities: Towards a Theoretical Framework

This work stresses the centrality of the Service-Dominant Logic (S-D logic) point of view and the relationships between firm and Open Innovation Intermediary in the knowledge development process providing a conceptual framework. From an in-depth literature review on S-D logic, Open Innovation Intermediaries and firm dynamic capabilities, a development of a conceptual framework based on these research areas is provided. The framework is intended to highlight the role of customers (firms) into professional relationships with intermediaries of innovation becomes progressively significant in the innovation activities because these professional relationships increasingly become co-creators of value. Within their advanced platforms, intermediaries or brokers, encourage, promote and sustain interactions and partnerships aligned to value co-creation enterprises. This is achieved by providing a heterogeneous set of services to augment dynamic cooperation, to advance concepts or solutions for solving interdisciplinary problems and, consequently, to address an organization’s requirements for new market opportunities. Therefore, these partnerships represent a possible way to define and to improve the value cocreation actions by firms that intend to engage and to cooperate with adjunctive and integrative resources and expertise. In addition, the framework has been designed to highlight a particular domain centered on the role of each S-D Logic axioms within the innovation capabilities; and the relationship and orientation between organisation and innovation intermediary. The main findings highlight that both firms and Open Innovation Intermediaries need to develop innovative capabilities through direct and indirect relationships within the S-D logic perspective. This study is an effort towards building a conceptual framework by connecting the concepts of Open Innovation Intermediaries, dynamic capabilities and S-D logic.

Knowledge flows, changing firms’ competences and patent citations: an analysis of the trajectory of IBM

ABSTRACTThis paper investigates knowledge flows that a leading firm might deal to transform its core competencies, through a case study about IBM. The transformation of IBM from a hardware company to a knowledge service provider is strongly dependent upon different knowledge sources and areas, different capabilities fed by different science and engineering fields. Our theoretical framework presents how the literature on innovation has been enriched by elaborations on dynamic capabilities of firms, on the role of knowledge and knowledge flows as a source of those capabilities and on patent citations as statistical tool to capture those knowledge flows. This paper integrates those three different approaches using patent citations statistics to measure knowledge flows behind IBM’s changing capabilities. Our contribution to this literature is an articulation of a historical summary of the evolution of IBM with an empirical analysis of those changes through patent citations statistics.

Dynamic capabilities of biologics firms in the emerging business market: Perspective of dynamic capabilities evident

The biologics industry constitutes an emerging business market, and the innovative and complex tacit knowledge of this market is understood by very few networked actors. In particular, information related to the resources and capabilities of biologics firms is considered highly confidential and is not accessible to the public. This study investigated five of the top ten biologics firms in the Asia–Pacific region. The firms were examined from the `perspective of dynamic capabilities. More specifically, the dynamic capabilities of the firms were explored using a four-stage coding analysis based on grounded theory. A theoretical framework and relevant concepts and theoretical propositions were developed in this study. Thus, this study proposes a conceptual framework that consists of uncommon knowledge, knowledge network, interaction factors, and mobility capability and describes five theoretical propositions and their influence on market competitiveness. This study found that the complex and dynamic market environment in question is driven by dynamic relations among various interaction factors.

Facilitating dynamic marketing capabilities development for domestic and foreign firms in an emerging economy

While the strategy literature has long advocated the impact of strong firm dynamic capabilities on new product development, scant research has discussed how to build dynamic marketing capabilities (DMCs), a key component of dynamic capabilities, to improve innovation performance. Focusing on emerging economies, this study develops a framework for exploring the mechanisms of building strong DMCs from the perspective of both external (inter-organizational relationships) and internal (entrepreneurial orientation) factors. Using survey data from firms in China, the authors find that both vertical and horizontal relationship can facilitate the development of DMCs. Moreover, the impact of vertical relationship is stronger than that of horizontal relationships for domestic firms but weaker for foreign firms, because foreign and domestic firms have different levels of resource dependence on their partners. Furthermore, entrepreneurial orientation influences firms' willingness and ability to leverage the benefits from relationships, thus strengthening the impact of vertical relationships but weakening that of horizontal relationships. The study extends DMCs research into the area of international business by suggesting different approaches for firms to develop DMCs in domestic versus overseas markets.

On micro-foundations of dynamic capabilities: A multi-level perspective based on CEO personality and knowledge-based capital

In recent years, researchers have asked why some firms are better than others at developing dynamic capabilities. The existing literature assesses micro-foundations separately, either on the managerial or on the organizational level. This study aims to provide a more holistic picture on the antecedents of dynamic capabilities by integrating managerial and organizational micro-foundations. Specifically, we posit that the personality of Chief Executive Officers (CEOs), manifested through their core self-evaluation (CSE), represents an individual-level micro-foundation which influences three types of a firm's knowledge-based capital—human, social, and organizational capital. We also argue that these three, in turn, are organization-level micro-foundations that ultimately enable the development of a firm's dynamic capabilities. We test our multi-level framework using data from 307 German CEOs, and confirm that CEO CSE is positively related with all three forms of knowledge-based capital. We further find that human capital and organizational capital mediate the relationship between a CEO's CSE and a firm's dynamic capabilities. Our research contributes by extending a central framework of the micro-foundations project (the bathtub model) that integrates the upper echelons perspective into a multi-level analysis. We empirically validate this model and advance the understanding of how firm leaders indirectly influence firm dynamic capabilities by shaping individual learning conditions.