Dynamic Capabilities Of Firm Research Articles

Eco-Innovation and Firm Efficiency: Empirical Evidence from Slovenia

Eco-innovation plays an increasingly important role for the competitiveness of companies. They open up new market opportunities due to the growing demand for eco-friendly products and can increase business efficiency. Using a dynamic capabilities lens, this article analyzes the relationships between various types of eco-innovation (product, process and organizational) and firm efficiency in the context of less innovative and more innovative companies. We use data from an online survey of Slovenian companies that have implemented eco-innovations as part of their operations. Statistical tests include an analysis of variance and a linear regression analysis.We find that organizational eco-innovation positively affects firm efficiency at all companies independent of their innovation potential, while process eco-innovation is positively associated with firm efficiency only among more innovative companies. In addition, at less innovative companies, firm age positively affects firm efficiency, suggesting that older and less innovative companies may enjoy learning curve benefits derived from experience. However, firm size has a positive effect on firm efficiency at more innovative companies, suggesting that more innovative companies may benefit from economies of scale. In general, more innovative companies are more likely to engage in eco-innovation and more likely to derive cost benefits (efficiency) from different types of eco-innovation.The main limitations of our analysis are the subjective data on the level of firms’ innovation and efficiency, the cross-sectional study design, and the single-country setting. Further in-depth longitudinal studies could better model the direction of causality between the implementation of eco-innovation and business efficiency, obtain objective data on business innovation, and ensure a more detailed and nuanced exploration of dynamic firm capabilities.

How biotechnology start-up firms transform human capital resources into dynamic capabilities

The dynamic capabilities of firms and its underlying human capital resources are thought to underlie the competitive advantage of firms. In this study we examine empirically the process whereby human capital is amassed, and combined with other resources to manifest operational, then dynamic capabilities. Our research question asks, how do new ventures amass and configure the human capital of their firms? We utilize an inductive longitudinal, multi-case study approach to reveal the micro-processes through which biotechnology start-up firms amassed and configured their human capital resources for viability and competitive advantage. Our findings reveal two important overlapping micro-processes: gathering and hunting, and potentiating. These two micro-processes converge to form organizational capabilities and outcomes for the firm. We discuss the implications of the findings in extending the literature on human capital emergence and dynamic capabilities.

Learning to use the future: developing foresight capabilities through scenario processes

Organizational learning is one type of value created by scenarios and strategic foresight within companies. However, relatively little attention has been devoted to what and how individuals – such as managers and strategists – learn from participation within strategic scenario processes. The paper focuses on the learning effects of scenario processes on participants, using the Futures Literacy Hybrid Strategic Scenario (FL HSS) method. It presents an evaluative framework for capturing the learning and cognitive effects of using the imaginary future, and the learning benefits derived by participants in intensive scenario processes. The paper outlines how scenario activities change the capabilities of the individuals and organizational systems to understand the nature and role of the future for what they perceive and what they do. Cognition is the domain of the individual rather than the organization and, as a result, the micro processes through which individuals learn and challenge mental models appear to be antecedent resources to collective mental model changes within organizations. This suggests that companies should invest in pedagogically rich scenario processes that develop the capability of managers to sense changes. The learning generated by scenario processes can strengthen the ‘sensing’ dynamic capabilities of firms.

Technology and wages: Why firms invest and what happens

This article examines the relationship between technology investment by firms and its outcomes, evaluating broadband diffusion in incumbent local exchange carriers' networks and its impact on the average real wage levels in incumbent firms. The analysis is based on, first, the evaluation of first-order statistical causality between wages and broadband levels, and second, on treatments effects modeling which considers the broadband deployment decision to be endogenous to the firm. Broadband is a general purpose technology, enhancing the dynamic capabilities of firms, and its diffusion is expected to positively impact average wages. Conversely, non-adopters, or those firms adopting lesser quantities of broadband, will find their average wages are being compressed. This technology wages impact is examined for United States telecommunications local exchange carriers. Using the extent of fiber adoption within firms as a measure of broadband deployment, broadband diffusion between the firms over time is found to have positively and significantly increased wage levels of firms in the sector. As broadband diffusion increases among the firms, the impact of such technology diffusion on impacting performance in the sector can be profound.

External dynamic capabilities, reconfiguration of cooperation mechanism and new product development: contingent effect of technological resource base

This study examines whether and how reconfiguration of cooperation mechanism affects new product development in emerging economies. By using a sample of 167 Chinese firms, we find that reconfiguration of cooperation mechanism can strengthen new product development of firms. Further, we find both capability to influence government and capability to influence industry as external dynamic capabilities of firms in emerging economies positively affect reconfiguration of cooperation mechanism, and technological resource base of firms can moderate the relationships between external dynamic capabilities and reconfiguration of cooperation mechanism differently.

Dynamic capabilities and new product development performance: Korean SMEs

This study analyses the dynamic capabilities and new product development performance for high-tech small and medium enterprises (SMEs) in Korea. This study reveals the resources and activities that underlie dynamic capabilities. We apply the concept of dynamic capabilities (sensing, seizing and managing threats/transforming capabilities) based primarily on the model of Teece. Based upon a literature review, resources and activities (such as organizational slack, knowledge reconstruction, and exploration) were identified as contributing to reinforce the dynamic capabilities of firms. Data were obtained from survey results collected from 241 Korean SMEs. Empirical results show that knowledge reconstruction activities that discard existing and established technological assets influence dynamic capabilities; however, organizational slack exhibits no significant relationship with dynamic capabilities. Exploration activities such as building network, exploration of external information, and academic activities show a negative influence on dynamic capabilities. Sensing capability, opportunity seizing capability and transforming capability that underlie dynamic capabilities show a positive effect on new product development performance on a collective and aggregate level versus an individual basis.

Responsible downsizing strategy as a panacea to firm performance: the role of dynamic capabilities

Purpose– A subject of continuous debate in the field of organizational change research and management practices is on whether downsizing strategies result in improved firm performance. The purpose of this paper is to propose and empirically examine dynamic firm capabilities as a major missing mechanism of firm performance.Design/methodology/approach– This study uses the data of 154 Taiwanese firms that employed an organizational downsizing strategy as the sample for testing the research question.Findings– The results indicate that a responsible downsizing strategy can result in greater firm performance for the development and enhancement of dynamic firm capabilities.Originality value– This research introduces dynamic capabilities into the downsizing context, and the empirical results provide new theoretical insight into downsizing and dynamic capabilities research, suggesting that downsizing should be regarded by management as resource management rather than a cost-cutting action.

Importance of managing intangible assets in enhancing dynamic capabilities of firms: cases from Sweden and Germany

This article reviews a social entrepreneurial initiative to set up a solar-powered incubator in Bubulo, Uganda, initiated by a group of Sweden-based entrepreneurship students. Using an Actor-Network Theoryinformed approach, it addresses the question of how the original aims of the initiative shifted as it moved from Sweden to Uganda, securing new allies and resources. In the tracing of this movement from northern Europe to central Africa, concepts from Actor-Network Theory, such as ‘translation’ and ‘drift’, are drawn upon. Thus, the text deals with spatial aspects of social entrepreneurial projects, heeding the call from Steyaert and Dey, who list ‘spatializing’ as one of ‘nine verbs that can keep the social entrepreneurship research agenda ‘‘dangerous’’ ’. The text thus engages in the debate on the merits of business incubation in low-income countries - a topic currently high on the international development policy agenda. The study, it is argued, prompts scholars and policy-makers to shift perspectives when evaluating what this type of initiatives achieve. Rather than ‘creating’ entrepreneurship, projects like the Lighthouse are better seen as efforts to ‘mobilize’ existing activities. Moreover, the article also raises the issue of whether the classic incubator-as-we-know-it is a suitable model for the generation of economic activity in low-income countries. Keywords: social entrepreneurship; entrepreneurship development; nascent entrepreneurship; business incubation; solar power; actor-network theory; translation; spatiality (Published: 9 Februry 2012) Citation: Annals of Innovation & Entrepreneurship 2012, 3 : 15762 - DOI: 10.3402/aie.v3i0.15762

Experimentation with strategy and the evolution of dynamic capability in the Indian pharmaceutical sector

This article demonstrates that radical regulatory changes can be tantamount to technological revolutions by studying Indian pharmaceutical firms. It shows that radical regulatory changes such as the Indian Patent Act of 1970, the New Industrial Policy of 1991 and the signing of TRIPS (Trade Related Intellectual Property Rights System) in 1995 served to open up new economic opportunities and constraints in the wake of which the winners and losers were selected as a function of the dynamic firm capabilities most appropriate for the new market environment.

The Role of Strategic Alliances in Gaining Sustainable Competitive Advantage for Firms

The management revue is a peer-reviewed interdisciplinary European journal publishing both qualitative and quantitative work as well as purely theoretical papers that advance the study of management, organisation and industrial relations.

Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm‐level alliance success

AbstractIn recent years, academics and managers have been very interested in understanding how firms develop alliance capability and have greater alliance success. In this paper, we show that an alliance learning process that involves articulation, codification, sharing, and internalization of alliance management know‐how is positively related to a firm's overall alliance success. Prior research has found that firms with a dedicated alliance function, which oversees and coordinates a firm's overall alliance activity, have greater alliance success. In this paper we suggest that such an alliance function is also positively related to a firm's alliance learning process, and that process partly mediates the relationship between the alliance function and alliance success observed in prior work. This implies that the alliance learning process acts as one of the main mechanisms through which the alliance function leads to greater alliance success. Our paper extends prior alliance research by taking a first step in opening up the ‘black box’ between the alliance function and a firm's alliance success. We use survey data from a large sample of U.S.‐based firms and their alliances to test our theoretical arguments. Although we only examine the alliance learning process and its relationship with firm‐level alliance success, we also make an important contribution to research on the knowledge‐based view of the firm and dynamic capabilities of firms in general by conceptualizing this learning process and its key aspects, and by empirically validating its impact on performance. Copyright © 2007 John Wiley & Sons, Ltd.

Start-Up Commercialisation Strategy and Innovative Dynamics

This paper endogenises a start-up's choice between competitive and cooperative commercialisation in a dynamic environment. It is demonstrated that, depending upon firms' dynamic capabilities, there may or may not be gains to trade between incumbents and start-ups in a cumulative innovation environment; that is, start-ups may not be adequately compensated for losses in future innovative potential. Because of this, there is no clear relationship between observed inter-industry innovation and commercialisation choice unless dynamic capabilities of firms are taken into account. In addition, the analysis demonstrates subtle and novel insights into the relationship between dynamic capabilities and rates of innovation.

Corporate Social Responsability and the Capabilities Based View ? a Case Study of a Multinational Enterprise (mne)

Today, many industries are coined by fundamental and sustainable environmental changes. Firms have to adapt their strategies, organizational structures and processes continuously to the new environmental conditions. In this context, several studies depict that so called dynamic capabilities of firms may become a source of competitive advantage. This contribution shows that social responsible actions by firms can be turned into dynamic capabilities. Hence, the orientation on social responsible issues in the change management may lead to competitive advantages. These statements will be validated by a case study and an encompassing review of CSR and capability based view literature.

Distinctions that matter: a classification of resources and discussion of implications for dynamic capabilities of firms

The present paper pursues two main objectives: 1) it highlights different classifications of resources, and 2) it discusses some relevant implications of such classifications for managers to consider when triggering the dynamism of resources in order to transform such resources into new sources of competitive advantage and achieve dynamic capabilities. This research is the result of a broad discussion held amongst researchers and practitioners at the forum organised by Centro de Investigacion sobre la Sociedad del Conocimiento (Knowledge Society Research Centre) at the Universidad Autonoma de Madrid and coordinated by Professor Eduardo Bueno, where well-known firms such as Bankinter, Banco de Bilbao Vizcaya Argentaria (BBVA), Caja Madrid, PSA Peugeot Citroen, Repsol YPF, Grupo Santander, Siemens and Union Fenosa had the opportunity to give their opinions on the subjects mentioned above. The forum carried out different activities, such as round-table talks and meetings. It also contributed to developing a necessary joint frame of references and valuable contributions to the topic herein discussed.

Missing Variables in Theories of Strategic Human Resource Management: Time, Cause, and Individuals

Much progress has been made with regard to theory building and application in the field of Strategic Human Resource Management (HRM) since Wright and McMahan's (1992) critical review. While researchers have increasingly investigated the impact of HR on economic success within the Resource Based view of the firm, and have developed more middle level theories regarding the processes through which HR impacts firm performance, much work still needs to be done. This paper examines how future theorizing in SHRM should explore the concepts of time, cause, and individuals. Such consideration will drive more longitudinal research, more complex causal models, and consideration of multi-level phenomena. Key words: Human Resource Management, Strategic HRM, Firm Performance of data - whether qualitative or quantitative - is not theory. Categorization characterises much of the work...in the realms of business policy / strategy and human resource strategy. Samuel Bacharach (1989, 497) The fact that a firm's people are becoming central to strategic decision-making seems reasonably unarguable. Strategic Human Resource Management (HRM) researchers have devoted considerable effort toward demonstrating that the ways that people are managed, particularly through HR practices, have strong empirical relationships with organizational performance (Delery/Doty 1996; Huselid 1995; MacDuffie 1995). While this empirical attention continues to increase, many researchers have criticized the theoretical underpinnings of the research and called for more specific theoretical models of the processes through which HR practices impact organizational performance (Becker/Gerhart 1996; Dyer/Reeves 1995; Guest 1997; Wright/Gardner 2003). While some strides have been made in conceptually articulating mediating processes between HR practices and organizational performance (e.g., Truss/Gratton 1994; Becker/Huselid/Pickus/Spratt 1997), this literature still leaves room for improvement. The purpose of this paper is to provide an overview of the current status of theoretical development in the HR-performance relationship, and to propose 3 important variables that are currently missing in theoretical analyses of the relationship between HRM and economic success: time, cause, and individuals. Theory on the Relationship between HRM and Economic Success Theory on the relationship between HRM and economic success has grown significantly over the past 15 years. This theoretical progress can be seen in two different arenas: meta-theories describing broad rationales for why HRM and economic success should be linked, and middle-level process theories describing how this linkage takes place. In the first arena, Wright and McMahan (1992) critically reviewed the state of theory in SHRM research, noting that much research was at best borrowing metatheories from other disciplines, and at worst, almost completely atheoretical. At that time they noted that the existing research in SHRM had predominantly utilized Resource -Based Theory, the Behavioral Approach, Open Systems Theory, and Control Theory with a few authors exploring Population Ecology and Critical Theory. They noted then, that this state of affairs could signal a tremendous obstacle to future research. McMahan, Virick, and Wright (1999) updated the earlier Wright and McMahan (1992) review, and found that the Resource-Based View of the Firm had become almost the universally embraced meta-theory among Strategic HRM researchers, largely because of both its popularity in the broader strategy literature, and its ability to articulate why HRM could be linked to the economic success of firms. For instance, Wright, Dunford, and Snell (2001) provided a comprehensive Resource Based model depicting the relationship between HRM practices and the stock of human capital, the flow of knowledge, and the dynamic capabilities of firms, all of which have been advocated among strategy researchers as important resources for competitive success. …

Dynamic capabilities and the emergence of intraindustry differential firm performance: insights from a simulation study

AbstractThis paper explores how the dynamic capabilities of firms may be linked to differential firm performance within an industry. A formal model is presented in which dynamic capabilities are treated as a set of routines guiding the evolution of a firm's resource configuration. The model centers on the endogenous choice firms make between resource deployment through imitation and experimentation in order to generate alternative resource configurations. Three performance‐relevant attributes of dynamic capabilities are proposed: timing, cost, and learning of resource deployment. Theoretical propositions are developed that suggest how these attributes contribute to the emergence of differential intraindustry firm performance. Simulation analysis offers insights into the trajectories of evolutionary change engendered by dynamic capability, and serves to refine the theoretical propositions. It is found that timing, cost, and learning effects foster the emergence of robust performance differences among firms with strikingly similar dynamic capabilities. Moreover, the results show that even small initial differences among firms can generate significant intraindustry differential firm performance, especially when the effects of timing, cost and learning are combined. Copyright © 2002 John Wiley & Sons, Ltd.

Core competences and company performance in the world-wide computer industry

This paper contributes to the understanding of the importance of dynamic firm capabilities for company performance in isolating the effect of the creation of core competences on the performance of companies in the international computer industry. It discusses and tests the assumed relation between different dimensions of core competences and performance. This is followed by a further study of the relation between the external appropriation of core competences through mergers and acquisitions, as well as through strategic technology alliances. A major conclusion of this study is that a specific set of endogenous technological core capabilities is needed to generate performance differentials. Also, the external appropriation of competences does not seem to be an easy solution through which companies can improve their existing capabilities in the short-run.

The Dynamic Capabilities of Firms: an Introduction

An expanded paradigm is needed to explain how competitive advantage is gained and held. Firms resorting to 'resource-bas ed strategy' attempt to accumulate valuable technology assets and employ an aggressive intellectual property stance. However, winners in the global marketplace have been firms demonstrating timely responsiveness and rapid and flexible product innovation, along with the management capability to effectively coordinate and redeploy internal and external competences. This source of competitive advantage, 'dynamic capabilities', emphasizes two aspects. First, it refers to the shifting character of the environment; second, it emphasizes the key role of strategic management in appropriately adapting, integrating, and re-configuring internal and external organizational skills, resources, and functional competences toward changing environment.3 Only recently have researchers begun to focus on the specifics of developing firm-specific capabilities and the manner in which competences are renewed to respond to shifts in the business environment. The dynamic capabilities approach provides a coherent framework to integrate existing conceptual and empirical ^ knowledge, and facilitate prescription. This paper argues that the competitive advanis tage of firms stems from dynamic capabilities rooted in high performance routines z operating inside the firm, embedded in the firm's processes, and conditioned by its •*> history. It offers dynamic capabilities as an emerging paradigm of the modern business J firm that draws on multiple disciplines and advances, with the help of industry studies > in the USA and elsewhere.