Organizational Dynamic Capabilities Research Articles

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

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

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

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

ORGANIZATIONAL RESILIENCE AND EMPLOYEE PERFORMANCE IN CRISIS ECONOMY

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

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

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

Strategic Organizational Learning Capability and Sustainable Competitive Advantage of Seed Companies in Kenya

The strategic capabilities and the sustainable competitive advantage have remained a central locus of academic discourse, though their comprehensive examination within the developing world, particularly in Kenya, in the area of seed industry has been noticeably limited. The objective of this study was to look into the influence of strategic organizational learning capability on the sustainable competitive advantage of seed companies in Kenya. The theories that supported the study were: organizational learning theory and dynamic capability theory. The research adopted a positivist approach because the role of the researcher was limited to data collection and interpretation in a manner which was observable and verifiable. The research used cross-sectional and descriptive designs where qualitative data was collected through reviewing of company manuals. A questionnaire was used to collect quantitative data from 76 private seed firms in Kenya, using stratified sampling technique, with 280 respondents from top management, finance, operations, and information communication technology departments. Data acquired through the administration of questionnaires was analyzed utilizing multiple regression analysis, and a rigorous assessment of hypotheses. The investigation yielded an array of insightful findings, notably, strategic organizational learning capability emerged as a pivotal determinant, displaying a robust and statistically significant positive relationship. The study concluded that strategic organizational learning capability indeed had a significant influence on the sustainable competitive advantage of seed companies in Kenya. The study stresses the importance of investing in and strengthening strategic organizational learning capability. Seed companies should therefore foster a culture of continuous learning, measure and assess learning outcomes, and promote sustainable competitive advantage.

Resource integration and firm performance through organizational capabilities for digital transformation

PurposeDigital transformation is a foundational change in how firms operate and deliver value to customers by using digital technologies to create new business opportunities. The purpose of this study is to offer a conceptual framework by reorganizing the elements of digital transformation, including resources, technology, capabilities and performance, into a workable process and investigating how firms integrate these resources, build new capabilities and transform them into enhanced performance.Design/methodology/approachThis framework builds three blocks: resource integration, organizational capabilities and outcomes, exploring the impact of resource integration on outcomes through organizational capabilities. For resource integration, this study adopts a resource-based view (RBV) and service-dominant logic (SDL) to integrate organizational resources, including information technology (IT)-based resources, which play a role in moderating the effect of resource integration. Moreover, the author argues that firms’ capabilities have two levels: higher-order capabilities and lower-order capabilities, which will convert these resources through the capabilities into organizational performance.FindingsThis framework is built to understand the process of digital transformation and its antecedents for firms’ performance in business environments. Drawing on RBV, it provides a more holistic perspective that has been linked to resource integration, organizational capabilities and outcomes at the firm level. In this way, the theoretical basis for diminishing implicitness associated with the current perspective of digital transformation can be strengthened.Originality/valueThis paper offers a coherent discussion of digital transformation and explains the process of digital transformation, thus advancing prior work. The major contribution is connecting the process of digital transformation through which firms integrate resources, i.e. digital technologies and valuable, rare, inimitable and nonsubstitutable (VRIN) and nonVRIN resources as well, to build organizational dynamic capabilities based on RBV and SDL.

Linking Digital Orientation and Data-Driven Innovations: A SAP–LAP Linkage Framework and Research Propositions

Data-driven technologies can have a broad impact on innovation management. In the present digital era, it has become a complex and debatable topic that requires refinement from a research perspective. Along this line, this study aims to understand how digital orientation facilitates the adoption of digital technologies to improve innovation performance. Using organizational learning theory and dynamic capability theory within a situation–actor–process and learning–action–performance framework, the study systematically captures and analyses the complexities and interactions among the factors affecting data-driven innovation in a case organization. It also highlights contingent variables that influence the relationship between data-driven insights produced by digital technologies and innovation performance. After case analysis, the study develops propositions and offers a conceptual model. Practitioners can use findings to develop a digital orientation for facilitating technology adoption and innovation management.

Bibliometric Insights into Organizational Agility and Dynamic Capabilities: Analyzing SCOPUS Database

Bibliometric Insights into Organizational Agility and Dynamic Capabilities: Analyzing SCOPUS Database

Blazing the trail: The role of digital and green servitization on technological innovation

This paper explores the effect of digital and green servitization on firms' technological innovation performances. Drawing on the Organisational Learning Capabilities (OLC) and Dynamic Capabilities theories, we conjecture that digital and green servitization represent a crucial learning mechanism for firms that translates into an ampler set of dynamic capabilities, including the ability to produce technological innovation. To test these hypotheses, we employ a Propensity Score Matching (PSM) approach and compare the innovation intensity between firms that engage in Digital, Green or both (digital and green) servitization and those that do not provide these services. Our evidence uncovers a positive relationship between digital servitization and firms' innovative performances. On the contrary, our results reveal that firms that offer green services are less likely to be highly innovative compared to those that do not provide this type of service and suggest the existence of positive complementarities between Digital and Green services in shaping firms' innovative performances. Additionally, we find that public innovation investments foster the effect of digital and green servitization on firms' ability to be highly innovative These results have significant implications for managers' and policymakers' ability to boost firms’ innovativeness during the transition toward a circular economy.

디지털 트랜스포메이션 리더십이 조직구성원의 혁신행동에 미치는 영향

This study demonstrates the leadership and capabilities that corporate leaders must possess for the sustainable growth of the organization amidst unprecedented changes in the business environment, such as the 4th Industrial Revolution and digital transformation, which have recently emerged as corporate management issues. To this end, this study targeted 350 employees of domestic IT companies to demonstrate the impact of a leader's digital transformation leadership on employees' innovation behavior, and to determine whether the organization's dynamic capabilities and managers' coaching behavior influence the innovation behavior of organizational members in the digital era. The research results showed that the leader's digital transformation leadership had a positive effect on the innovation behavior of organizational members. In addition, the dynamic capability of the organization had a mediating effect on the leader's digital transformation leadership and the innovation behavior of organizational members, and the leader's managerial coaching behavior had a moderating effect. In particular, the organization's dynamic capabilities and the leader's managerial coaching behavior suggest a new direction of leadership to corporate leaders and managers who must create organizational performance through digital innovation. The significance of this study is that it has been demonstrated that in the future, leaders of organizations in the digital era will need distributed leadership that emphasizes the capabilities of each member of the organization and is based on agile-centered dynamic capabilities, rather than focused leadership that is exercised based on individual characteristics or capabilities.

Exploring the impact of partner match on business model innovation: the mediating role of interfirm dynamic capabilities-based on ecosystem orchestration perspective

PurposeWithin the context of an open innovation business environment, the frequent interaction and coordination activities among heterogeneous partners have a significant impact on enterprises' business model. Nevertheless, fewer empirical research has been made to explore how to match external partners and update organizational dynamic capabilities at an ecosystem level. Therefore, this paper attempts not only to investigate the direct impact of partner match on different business model innovation (BMI) themes (efficiency-centered BMI and novelty-centered BMI) but only to shed light on the pivotal mediating role of interfirm dynamic capabilities.Design/methodology/approachThis paper utilized the methodology of Partial Least Squares Structural Equation Modeling (PLS-SEM) to investigate the impact of diverse partner selection criteria and interfirm dynamic capabilities on two distinctive themes of BMI. More than 20 industry clusters with multiple industries were selected as representatives of the creative ecosystem, predominantly from the Yangtze River Delta region. Valid data were collected from 254 managers by both online questionnaires and offline interviews.FindingsThe findings of the study show that different partner match criteria have distinct direct impacts on BMI themes. Partner complementary and partner synergy, deriving from the “task-related criteria”, are significantly correlated with both EBMI and NBMI. Conversely, partner compatibility, deriving from “Partnering-related Criteria”, shows a positive correlation with EBMI but not NBMI. Furthermore, compare the indirect effect on EBMI, the paper’ results demonstrate interfirm dynamic capabilities as mediator can more maximize external benefits to promote NBMI.Practical implicationsThe study findings effectively help enterprises implement different BMI themes. From a management perspective, whether pursuing EBMI or NBMI, enterprises should consciously seek partners who can provide complementary support or share mutual goals across diverse industries. This strategic approach can significantly enhance the opportunities for sustainable and innovative business development. Furthermore, to successfully accomplish NBMI, enterprises must cultivate interfirm dynamic capabilities encompassing a comprehensive range of cross-organizational innovation capacities, such as bolstering organizational learning capability, establishing interactive network platforms to enhance coordination capabilities and engaging in integrative activities to foster a collective mindset.Originality/valueThis paper contributes to the match theory by introducing three critical matching criteria, enabling enterprises to discern partners based on diverse organizational characteristics. Additionally, this paper broadens the scope of the dynamic capability literature by adopting a network perspective to strengthen interaction and relationship mechanisms. The authors primarily elucidate the concept of interfirm dynamic capabilities as a formative higher-order model formed by three sub-capabilities (absorptive capacity, coordination capability and collective mind). Finally, this paper combines matching theory with dynamic capacity theory to the field of BMI, which adds depth and complexity to the existing ecosystem innovation research.

KNOWLEDGE ABSORPTIVE CAPACITY: CONTEMPORARY TRENDS AND NEW CONCEPTUALIZATION IN THE CONTEXT OF FUNDAMENTAL TRANSITION PROJECTS

Knowledge absorptive capacity (ACAP) is a dynamic organizational capability that enables the appropriation of valuable external knowledge to generate superior performance. This article discusses the following questions: Is ACAP still worth new conceptualizations? Moreover, if this is the case, what are the opportunities for additional studies to deepen the theoretical and empirical framework of this topic? To this end, we drew on the discussion of the most influential research papers and a comparative analysis between three young colleges in preparation for the first program accreditation. The theoretical discussion and the empirical results allowed the proposal of an integrative model of the ACAP processes, antecedents, and outcomes suitable for fundamental transition projects. It highlights many issues that have been understudied or ignored in the existing literature, such as the transformative and interactive nature of ACAP, the desired ACAP processes at the interface between potential and realized absorptive capacities, the necessity of a discriminative study of the antecedents and outcomes of ACAP; the ACAP-organizational learning link; the combined effects surrounding ACAP; and the role of ACAP ecosystem, organization maturity, and project maturity. In addition, the model suggests five ACAP key performance indicators: the relevance, depth, exhaustiveness, pervasion, and sustainability of knowledge. Considering these crucial issues, along with the diverse spectrum of organizations, sectors, and countries, paves the way for more in-depth research on ACAP and helps to reduce the ambiguity that still characterizes this domain.

Sustainable by design: An organizational design tool for sustainable business model innovation

When firms want to meet ambitious sustainability targets, they often fail to deliver on more radical innovation at the level of the business model. They often struggle to design and successfully implement new, sustainable business models in practice. While sustainability tools might help bridge the design-implementation gap in business, they often lack a grounding in both theory and practice. In this study, we build on empirical research that recognises the importance of dynamic capabilities to develop sustainable business models, and the barriers and drivers that might exist at the organizational level. We investigate the following research question: How can firms address organizational design issues in order to develop the dynamic capabilities necessary for sustainable business model innovation? The research method consists of four stages derived from the iterative, user-involved method of design science research: 1) identifying the problem and defining objectives for a solution; 2) design and development; 3) demonstration; and 4) evaluation. The work results in the “Sustainable By Design” tool which was used in a workshop setting with two large multinational companies seen as sustainability leaders in their sectors: DSM and IKEA Retail (Ingka Group). The work makes two contributions. First, we contribute the Sustainable By Design tool which practitioners can use to evaluate their current organizational design, identify barriers and drivers for sustainable business model innovation, and develop strategic interventions to engage in organizational transformation. Second, we elucidate the theoretical connections between organizational design, dynamic capabilities, and sustainable business model innovation, and suggest directions for future research.

The consequences of innovation failure: An innovation capabilities and dynamic capabilities perspective

Organizations engage with innovation by leveraging their innovation capabilities and dynamic capabilities. In this study, we examined how organizational innovation capabilities and dynamic capabilities can influence organizational performance, taking into account cases when innovation projects do not yield beneficial outcomes to organizations. Building on the dynamic capability view and the notion of innovation capability, we developed a conceptual model and subsequently validated it by conducting a survey on a sample of organizations across multiple manufacturing and service industries that are based in India. By applying PLS-SEM, we found that different contextual factors including commercial viability and technological feasibility play a critical role towards innovation failure and success. In its turn, innovation failure negatively influences organizational performance.

Organizational Change Capability and Performance A Social Entreprise At Lazismu Cilacap

This research analyses how the Learning and Innovation Capability and Managerial Cognitive Capability affect Organizational Change Capability and how Organizational Change Capability affects Financial Performance at Lazismu Cilacap. Based on the report on the realization of the zakat collection by Lazismu Nasional, which was recorded in 2019 until mid-2020, it was IDR 239.003 billion. Of the total 2020 national zakat potential of IDR 233.84 trillion, only IDR 8 trillion or 3.5 percent has been collected. OCC at Lazismu Cilacap represents a broad and dynamic organizational capability that allows companies to adapt legacy capabilities to new threats and opportunities to create new capabilities. This research uses a quantitative approach using a survey. Data was collected by conducting a questionnaire to 31 amil at Lazismu Cilacap and analyzed by SPSS 26. The results showed that Learning, Innovation Capability and Managerial Cognitive Capabilities significantly affect organizational change capability. Future research is expected to be able to reach a wider social enterprise not only at the Lazismu Cilacap institution but can expand coverage to the province and national level.

Organizational resilience, dynamic capability and business innovation: Inputs to continuous development model of tourism SMEs

Organizational resilience, dynamic capability and business innovation: Inputs to continuous development model of tourism SMEs

Dynamic capabilities developed by the interaction of individuals

THE AIMS OF THE PAPER The existence of dynamic capabilities is key for newly created organizations. However, the development of these capabilities is less researched, especially in the case of start-ups. The primary aim of the study is to explore the characteristics of the development of dynamic capabilities through the case study of a domestic start-up, to illustrate the relationship between organizational and individual capabilities, while providing insights into the interaction between individual capabilities that can lead to the development of dynamic organizational capabilities. METHODOLOGY The primary data collection took place at a domestic start-up. The chosen methodology is the case study, in which three data sources were used. The in-depth interview served as the primary data source, personal or online interviews for at least 45 minutes were conducted with all members of the organization. The in-depth interviews were supplemented by document analysis to gather information from other sources. At the end of the study, the results were validated in a management workshop. MOST IMPORTANT RESULTS During the development of dynamic capabilities four types of interactions between individual capabilities could be identified: complementation, merging and extending similarities, searching and selecting alternatives and acceptance. Each type of interaction provides a solution in different situations, but all of them ultimately contribute to the development of dynamic capabilities. RECOMMENDATIONS Development of dynamic organizational capabilities (hence flexibility) is at least partly rooted in individuals and the interactions between them. It is therefore worthwhile for organizations to emphasize the acquisition of employees with good dynamic managerial capabilities and their involvement in interactions.

Organizational structure and dynamic capabilities on business model innovation in project-driven enterprises: evidence from the construction industry

PurposeFlexibility and efficiency are dual attributes of the organizational structure that are crucial for project-driven enterprises to achieve sustainable development in a dynamic environment. However, there is a lack of research on the patterns by which the dual attributes of a project-driven enterprise’s organizational structure affect business model innovation. Employing organizational theory, this study aims to assess the mediating mechanisms and dynamic capabilities through which the dual attributes of the organizational structure influence business model innovation in project-driven enterprises.Design/methodology/approachData were collected from 242 employees from four project-driven companies across 26 cities (e.g. Beijing, Tianjin, Guangzhou and Shenzhen) in China. Structural equation modeling revealed the relationship between organizational structure’s dual attributes and business model innovation.FindingsThe findings show that the dual attributes (flexibility and efficiency) of the organizational structure have positive impacts on business model innovation. Moreover, dynamic capabilities mediate the relationship between the dual attributes and business model innovation in project-driven enterprises.Originality/valueThis study provides contributions to innovation research in the context of project-driven enterprises by revealing the influence of organizational structure on business model innovation through the firms’ dynamic capabilities. Such knowledge can enable managers of project-driven enterprises to develop effective interventions to promote business model innovation.

From Managerial to Organizational Dynamic Capabilities: Enabling Adaptability in Turbulent Times

From Managerial to Organizational Dynamic Capabilities: Enabling Adaptability in Turbulent Times

Organizational resilience as a key property of enterprise risk management in response to novel and severe crisis events

AbstractThe COVID‐19 pandemic represented a novel risk event. Research on similar past crises identified risk culture and leadership as properties of effective enterprise risk management to enable companies to respond “like a rubber ball” to such events. The focus of this paper is on the question of how enterprise risk management (ERM) can develop such resilience. A comprehensive literature review was undertaken to enrich the ERM framework with insights from organizational resilience theory, resource and dynamic capability theory and system psychodynamic thinking, addressing the human dynamics at play when coping with such a crisis. It was complemented by a global empirical study among C‐level executives in insurance on the management of the COVID‐19 pandemic. Some key insights were identified: a learning culture, a strong system permeability, a clear purpose, strong leadership to ensure alignment and autonomy of teams and a culture of trust, where employees feel safe, but also dare to take courageous steps to benefit from the crisis. While the newly developed organizational resilience framework identifies the key themes, the organizational resilience map provides guidance on how to develop organizational resilience. This paper enables researchers and practitioners to identify key themes to render a company more resilient to unforeseen risk events.