Firm-level Capabilities Research Articles

Firm-level capabilities towards big data value creation

Big data has played an increasingly important role in using data to improve business value. In response to several big data challenges, the purpose of this study is to identify firm-level capabilities required to create value from big data. The adjacent theories of business process management and IT business value underpinned the study, together with an in-depth case study that led to the identification of twenty-four types of capabilities related to IT, process, performance, human, strategic, and organizational practices. The findings confirmed the application of practices and capabilities of adjacent theories, as well as certain practices and attributes that were both changed and reinforced at the intersection of big data. As an outstanding additional support to the extant big data studies, this work empirically confirms and portrays hitherto unexplored capabilities of big data and set their roles, thus providing a holistic overview of firm-level capabilities that are required for big data value creation.

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.

Corporate Foresight: A New Frontier for Strategy and Management

This article introduces the construct of corporate foresight to a strategy and management scholars audience. Corporate foresight is a dynamic, firm level capability that allows firms to evaluate an...

The impact of alliance justice capability on the performance of strategic alliances in the Indian IT sector: the mediating role of inter-firm commitment

This paper conceptualizes and operationalizes alliance justice capability (AJC) as a second order firm-level capability consisting of three distinct yet related first-order firm level skills which ...

How Firm Boundary Choices Alter Over Time: Building a Dynamic Model for the UK Pension Industry

Theoretical explanations for the positioning of firm boundaries have developed from a range of literatures including transaction cost economics, firm-level capabilities, organizational theory and t...

When the Dynamized Become the Dynamizing

We offer new theory on the consequences of dynamic capabilities to change in the firm’s environment. We leverage opportunity creation theory to hypothesize that firm-level dynamic capabilities can ...

TACIT KNOWLEDGE AND FIRM PERFORMANCE RELATIONSHIP. THE ROLE OF PRODUCT INNOVATION AND THE FIRM LEVEL CAPABILITIES

Based on knowledge-based theory of organizational capabilities and dynamic capabilities theory, this paper tries to establish the linkages between tacit knowledge resources, its integration into firm level capabilities, product innovation and firm performance. In this way, the paper analyses the relationships between some of the most relevant variables to the organizations in order to remain competitive. The conceptual model is tested using a sample of organizations in the industrial sector, using SEM and hierarchical regression analysis. Results show a positive relationship between tacit knowledge and firm performance, tacit knowledge and product innovation, and product innovation and firm performance. A partial mediating effect of product innovation on the tacit knowledge firm performance relationship is established. Also, technical capabilities have a moderator effect on tacit knowledge firm performance relationship. At the end of the paper managerial implications are commented, as well directions for future studies.

Estratégias de marketing internacional adotadas no processo de internacionalização de franquias: um estudo de caso múltiplo no setor de vestuário

Objetivo: Este estudo investiga os antecedentes do processo de internacionalizao de franquias brasileiras, relacionando-os com a estratgia de marketing internacional, com base na adaptao ou padronizao do composto de marketing.Mtodo: A partir da reviso terica, um modelo proposto, englobando os antecedentes da internacionalizao internos e externos empresa, a estratgia de marketing internacional e o grau de internacionalizao da empresa. A investigao emprica baseou-se em estudo de caso mltiplo com trs grandes empresas do setor de vesturio.Relevncia: Ressalta-se a importncia da gesto internacional da marca como ativo que pode ajudar o processo de internacionalizao, bem como o papel dos parceiros/franqueados na construo e gesto da imagem da marca no exterior.Resultados: Os resultados mostram que os antecedentes mais importantes no processo de internacionalizao das franquias pesquisadas pertencem ao nvel da empresa (tamanho, recursos e capacitaes, marca forte, orientao e experincia internacional), com destaque para a marca como importante ativo. As estratgias de marketing internacional empregadas buscam manter o posicionamento da marca padronizado, com adaptao de alguns elementos do composto de marketing s caractersticas e necessidades dos mercados-destino e centralizar as decises estratgicas para manter uma imagem de marca consistente, o que se designa como estratgia de marketing semiglobal.Contribuies tericas: Este estudo contribui para o conhecimento sobre os fatores que influenciam a deciso de internacionalizar e as estratgias de marketing internacional utilizadas por redes de franquias brasileiras no exterior, contemplando tambm recomendaes para redes que desejam se internacionalizar.

Cluster Externalities, Firm Capabilities, and the Recessionary Shock: How the Macro-to-Micro-Transition Shapes Firm Performance During Stable Times and Times of Crisis

In this paper, we examine the macro-to-micro-transition of cluster externalities to firms and how it is affected by the macroeconomic instability caused by the recessionary shock of 2008/2009. Using data from 16,166 manufacturing and business services firms nested in 390 German regions, we employ within-firm regression techniques to estimate the impact of cross level interactions between firm- and cluster-level determinants on phase-related differences in firm performance between a pre-crisis (2004-2007) and a crisis period (2009-2011). The empirical results validate the existence of a macro-to-micro-transition that evolves best in the case of broad firm-level capabilities and variety-driven externalities. Furthermore, the results indicate that the transition strongly depends on the macroeconomic cycle. While the transition particularly benefits from a stable macroeconomic environment (2004-2007), its mechanisms are interrupted when being exposed to economic turmoil (2009-2011). Yet, the crisis induced interruption of the transition is mainly restricted to the national recession in 2009. As soon as the macroeconomic pressure diminishes (2010-2011), we observe a reversion of the transmission mechanisms to the pre-crisis level. Our study contributes to the existing literature by corroborating previous findings that the economic performance of firms depends on a working macro-to-micro transition of external resources, which presupposes sufficient cluster externalities and adequate firm-level combinative capabilities. In contrast to previous studies on this topic, the transition mechanism is not modeled as time-invariant. Instead, it is coupled to the prevailing macroeconomic regime.

Why and how to compete through sustainability: a review and outline of trends influencing firm and network-level transformation

This article reviews and discusses how to compete with sustainability by reviewing the literature about sustainability, business models, innovation, and networks. It is an introduction to the special issue on “innovative inter-organizational networks and sustainable economy: current trends and future opportunities” and a call for more research where we examine and outline ideas for how the new and rapidly spreading trends of digitalization, the circular economy, and servitization are force firms to develop new types of competitive advantages. We elaborate upon the transformation needs at firm-level capabilities and business models, as well as network-level changes through the formation of new ecosystems and new ways of engaging in co-creation with partners. These firm and network level transformation discussions are complimented with specific list potential areas for future academic research.

Viewing Global Strategy Through a Microfoundations Lens

Academic Abstract The emerging microfoundations literature asserts that macro concepts and macro-outcomes, such as firm-level capabilities, performance and strategies, need to be understood in terms of the underlying actions, interactions and characteristics of micro-level entities, such as individual actors and managers. This literature has specific implications for the understanding of cross-level explanatory mechanisms; notably, it asserts that all relations between macro variables are mechanisms that involve micro variables. While the microfoundations literature has been influential in the general strategy literature, global strategy has been less impacted by it. This is paradoxical because the research challenges pointed to by the literature are often magnified in the multinational corporation and in a global strategy context. We characterize microfoundations, discuss their relevance to the global strategy, and show how the papers in this special issue fill important microfoundational gaps in the global strategy literature. For example, Google’s strategic decision in 2018 to reenter the Chinese market (macro-level analysis) is best understood through the thinking of decision-makers in the company, as well as opposition to the move from over one thousand of its employees. Managerial Summary For too long, studies of corporate strategies have focused on the firm as a unit of analysis, as if the firm could decide or think on its own, neglecting the fact that it is managers who think. The underlying motivations, interactions and characteristics of individual managers of companies have often been missing in explanations of global strategy formulation. This can especially be a lacuna in closely-held companies in emerging countries where decision-making is more concentrated in the minds of owners, top managers and family members. The microfoundations literature specifically tries to connect the thinking and backgrounds of individual managers with strategic decisions their firm makes. While the microfoundations literature has made some headway in the general strategy literature, the analysis of global strategy has been less impacted by it. This is paradoxical because the research challenges pointed to by the literature are often magnified in the multinational corporation and in a global strategy context. This introductory paper first refines and enunciates microfoundations theory, in its application to global business. It then also shows how the papers in this special issue fill important microfoundational gaps in the global strategy literature.

Impact of customization and innovation on hospitality firms’ performance

ABSTRACTThis study examines how process innovation and customization, both individually and in combination, improve hospitality firms’ financial and non-financial performance. The paper investigates both process innovation and customization as important firm-level capabilities that have the capacity to improve the performance of hospitality firms due to the nature of their operations. This paper uses data from hospitality firms operating in Ghana. The study finds that hospitality firms’ customization capability allows hospitality firms to benefit from using the customer as a key resource and as a production partner to provide the desired value for customer satisfaction. This study further finds that process innovation and customization produce higher levels of firm performance when they are deployed together as they have complementary properties. This study, therefore, offers that customization capability should target at improving innovation capability in order to achieve higher overall firm performance for hospitality firms.

Enhancing service firm performance through customer involvement capability and innovativeness

PurposeBecause of the paucity of empirical research on firm-level capabilities of firms for effective customer involvement, the purpose of this study is to evaluate service firms’ capacity to coopt customers to enhance the innovativeness and firm performance relationship. This study conceptualizes involvement capabilities of service firms as a strategic driver that exploits their internal firm assets, which in turn facilitates the positive relationship between innovativeness and firm performance.Design/methodology/approachData were collected from 344 managers of service firms across different sub-sectors in an emerging economy. The study first confirmed the constructs through confirmatory factor analysis before analyzing hypothesized relationships. Regression models were specified with robust standard errors to test the hypothesized relationships.FindingsThe study found that involvement capability of service firms helps them to exploit their relational assets and create and manage strong customer participation. Additionally, it was found that involvement capabilities enable service firms to capitalize on the competencies of customers, which in turn improves the outcomes of their innovativeness. The results showed that the interaction between involvement capability and innovativeness enhances firm performance significantly.Practical implicationsService firms can enhance customer participation in the value creation process by increasing their involvement capabilities. The increase in such capabilities will enhance the innovativeness of service firms, thereby improving their financial and non-financial performance.Originality/valueThis study offers guidance on how a firm’s innovativeness and customer involvement work together within the service operation to enhance firm performance.

Firm-Level Strategy, Capabilities and Performance of Food and Beverage Manufacturing Companies in Kenya

Firm-Level Strategy, Capabilities and Performance of Food and Beverage Manufacturing Companies in Kenya

The microfoundations of firms’ explorative innovation capabilities within the triple helix framework

In this paper we show how the triple helix model provides an organising regime within which participant firms can extend their capabilities for explorative innovation through funded collaborations with academia. In so doing, we adopt Felin et al.’s multi-level framework to examine the microfoundations of participant firms’ capabilities for explorative innovation in university partnerships. In our qualitative case study of a set of research projects that comprise a national research programme, we decomposed the microfoundations of the processes, interactions and the structures that facilitated the extension of member firms’ explorative innovation capabilities nurtured within each university-industry partnership. We explain the attitudinal and behavioural modifications of the firms’ individuals involved in the research project collaborations with university partners that aggregated into firm-level capabilities. Ultimately, we show that using a microfoundational lens allows for a deeper understanding of how triple helix programmes can influence the capabilities of firms for explorative innovation.

Chinese foreign acquisitions aimed for strategic asset-creation and innovation upgrading: The case of Geely and Volvo Cars

The acquisition and integration of Western companies into Chinese business groups, the impact of host country region innovation dynamics, and the consequences for Chinese firms' innovation capabilities represent a void in the existing literature. This study applies an in-depth longitudinal case study of a cross-border M&A and links the strategic asset-augmentation literature and location theories to address the influence of target firm characteristics on the acquiring firm's innovation capabilities. Results show how the acquisition decision is influenced by post-acquisition accessibility to, and leverage of, firm-level capabilities, macro-level conditions, and the ability to draw advantages from host country regional innovation dynamics to leverage global innovation capabilities. The study extends the asset-augmentation literature to include the notion of strategic asset-creation as a motive for M&A and demonstrates the dynamics of strategic asset-creation in the automotive industry. This study makes three contributions. First, it provides a definition of strategic asset-creation in the automotive industry; Second, it provides a more comprehensive explanation of the importance of spatial dynamics in regional attractiveness in strategic asset-creation processes of emerging market MNCs (EMNCs); Third, it demonstrates how EMNCs harness, absorb, and create new strategic assets.

Customer involvement capability and service firm performance: The mediating role of innovation

This study contributes to the literature on customer involvement by assessing the influence firm-level customer involvement capability has on service firm performance in two economic contexts. The study further examines innovation as a necessary mediator between customer involvement capability and firm performance. Data collected from service firms operating in two countries, the United Kingdom and Ghana, is analysed and used to validate the article's theoretical and empirical contributions. The results show that customer involvement capability has a positive and direct relationship with service firm performance in Ghana but a negative and direct relationship in the British context. The implication is that the effect of firm-level capability can be context-specific and that its development must therefore be aligned with the context in which a firm operates. On the other hand, it was found that in both contexts, innovation (product and process) mediated the relationship between involvement capability and firm performance.

Supplier Social Engagement and Performance in Supply Chains: An Exploratory Study

This study focusses on investigating organizational determinants of supplier engagement in relation to socially responsible practices. It is proposed that supplier social engagement is a firm-level capability that reflects an organization’s expertise in deploying resources and routines to achieve desired social performance as an outcome. We further argue that supplier social engagement consists of four complementary dimensions: cultural astuteness, operational astuteness, communication capability, and social cognizance. Engaging suppliers to influence their social behavior has rarely been discussed in the operations management literature. This research uses data from a survey and archival sources from a sample of large U.S. firms to empirically validate the proposed research model. Findings indicate that supplier social engagement is a higher-order capability affecting firm social and operations performance. Findings provide important implications for supply chain executives and opportunities for future research are also identified.

Differences between inter- and intra-group dynamics in knowledge transfer processes

PurposeKnowledge transfer (KT) processes are important for building and sustaining competitive advantages and dynamic capabilities. Prior research often treats KT processes as a firm-level capability, assuming knowledge flows uniformly within a firm. The purpose of this paper is to examine whether such a view is too simplistic because it ignores potential differences between inter-group and intra-group KT processes within a firm.Design/methodology/approachThe authors surveyed 137 software development professionals in a large Japanese electronics firm regarding co-workers who acted as critical sources of useful knowledge and the factors that affected KT within and across internal organizational boundaries. Using regression analysis, the authors test the extent to which factors such as the characteristics of the knowledge, the characteristics of the tie, and the characteristics of the network differentially affect KT within internal organizational boundaries vs across them.FindingsThe authors find that factors such as the accessibility of the knowledge source, network density, and collective teaching all help in transferring knowledge, while knowledge tacitness inhibit such transfers, but that the effect of these properties varies significantly depending on whether KT occurs across group boundaries.Originality/valueExisting research on KT within firms tends to treat all such transfers as uniform, with little difference between the dynamics of within-group transfer and between-group transfer. This study establishes key differences in KT between and within organizational groups, demonstrating that managers need to consider internal boundaries when deploying tools and strategies for facilitating knowledge flows.

The role of process innovativeness in the development of environmental innovativeness capability

Previous research suggests that innovation resources (i.e. internal and external Research & Development, acquisition of machinery, hardware, software, patents, and licenses) enhance environmental innovations. However, it is unknown how these resources should be deployed to develop environmental innovativeness capability. This research builds upon the resource management framework and proposes that environmental innovativeness capability is developed, at the firm level, through a two-sequenced bundling process. First, innovation resources are bundled into process innovativeness capability. Then, process innovativeness capability is extended to develop environmental innovativeness capability. The proposed model is tested with data collected through the 2008 Community Innovation Survey in Germany. The results confirm this two-sequenced bundling process. Specifically, results indicate that internal, external, hybrid innovation resources, and knowledge brought through Research & Development cooperation with suppliers are bundled into process innovativeness capability. Then, process innovativeness capability is extended and bundled with the knowledge brought through Research & Development cooperation with public research institutions into environmental innovativeness capability. These results are important because they provide a much-needed understanding on the development of firm level capabilities to undertake environmental innovations. Finally, this paper recommends managers to deploy their innovation resources to build capabilities on innovating processes, which in turn is the base for developing environmental innovativeness.