Dynamic Capabilities Perspective Research Articles

Social media and sustainable innovation in manufacturing firms: a dynamic capability perspective

PurposeWith social media usage growing rapidly in business sustainability in manufacturing sectors, the means through which manufacturing firms can incorporate it into the pursuit of environmental sustainability are largely under-researched by academics. Drawing upon the dynamic capability view, this study examines the indirect relationship between social media usage and sustainable innovation in manufacturing sectors.Design/methodology/approachThe study was based on analyzing data collected through a questionnaire survey on Chinese manufacturing firms. Partial least squares structural equation modeling was applied to test the hypotheses.FindingsThe results show that social media usage has a positive effect on sustainable innovation in the manufacturing sectors. Firms' sustainable dynamic capability mediates the relationship between social media usage and sustainable innovation. In addition, the effects of social media usage on firms' sustainable dynamic capability are stronger when stakeholder pressure is stronger and top management team commitment is higher.Originality/valueThis study highlights social media application as an important, yet underexplored, factor in sustainable innovation of manufacturing firms. The findings also untangle the mechanism of sustainable dynamic capability by which social media usage improves sustainable innovation for manufacturing firms.

Old and new: a dynamic capabilities perspective of learning and unlearning

ABSTRACT In this study, we explore innovation processes of innovation-efficient and innovation-inefficient firms. In particular, we investigate how learning and unlearning unfold from the perspective of dynamic capabilities. We employ a case study research approach to analyse learning and unlearning patterns in 24 firms, divided into innovation-efficient and innovation-inefficient firms. We find two different sets of patterns that distinguish innovation-efficient from innovation-inefficient firms. Our results reveal that innovation-efficient companies can quickly shift between learning and unlearning to dynamically orchestrate resources to deal with changes in the environment. In this sense, learning and unlearning are sources of dynamic capabilities, while their interplay is what makes capabilities actually dynamic. Furthermore, we provide implications for practitioners on how to navigate through innovation projects and design innovation management concepts more efficiently.

Moderating effect of dynamic capabilities on the relationship between lean practices and operational performance

Purpose The view that dynamic capabilities theory can help explain how lean organizations improve has been put forward by scholars. However, there is still a lack of research on the matching relationship between the application of lean practice and the internal elements of enterprise organization from the perspective of dynamic capabilities. The purpose of this study is to validate the moderating effect of dynamic capabilities on the relationship between lean practices and operational performance. Design/methodology/approach This study used the method of survey and empirical research to collect sample data from 263 enterprises in China. Through literature review, this study put forward the moderating hypotheses around dynamic capabilities, lean practices and operation performance and used the method of regression analysis to validate these hypotheses. Findings The results showed that dynamic capabilities have a partially moderating effect on the application of lean practices. Specifically, dynamic capabilities have a significant moderating effect on the relationship between just-in-time, total quality management, total preventive maintenance and operational performance, while dynamic capabilities have no significant moderating effect on the relationship between human resource management and operational performance. Originality/value The research conclusion complements and enriches the lean practices literature from the perspective of dynamic capabilities. Existing studies mainly focus on the moderating role of external environmental factors, while there is a lack of empirical research on the role of dynamic capabilities in lean practices literature. The research results will help enterprises further understand the matching relationship between lean practices and dynamic capabilities and then improve the success of lean practices application.

The interplay of institutional pressures, digitalization capability, environmental, social, and governance strategy, and triple bottom line performance: A moderated mediation model

AbstractThis study seeks to elucidate the mediating role of environmental, social, and governance strategy (ESGS) in bridging the nexus between institutional pressures—specifically regulatory and stakeholder influences—and triple bottom line performance (TBLP), which encompasses economic, social, and environmental facets. Concurrently, this study examines the extent to which digitalization capability influences these dynamics. Utilizing a dataset from subsidiaries within China's retail and transportation sectors, we employed structural equation modeling alongside regression analysis to validate our hypotheses. The findings corroborate a partial mediating effect of ESGS on the TBLP in response to institutional pressures while highlighting digitalization capabilities' moderated mediation role in strengthening the relationship between institutional pressures and TBL through ESGS implementation. By weaving together institutional theory and dynamic capability perspectives, this study advances the understanding of strategic avenues that influence TBLP through ESGS and offers managerial insights for effectively leveraging ESG strategies.

The impact of ICT capabilities on supply chain fraud and sustainability – a dynamic capability perspective

PurposeThis study aims to investigate the influence of information and communication technology (ICT) capabilities on supply chain fraud and sustainability within the context of Ghana’s small and medium-sized enterprises (SMEs). Additionally, the research explores the mediating role of supply chain fraud in the relationship between ICT capabilities and supply chain sustainability.Design/methodology/approachData were collected from 102 respondents within Ghana’s SME sector, and the research employed the dynamic capability theory as the conceptual framework. The study utilized partial least squares-structural equation modeling (PLS-SEM) to develop and analyze the proposed model.FindingsThe results of the study reveal a significant reduction in supply chain fraud attributable to enhanced ICT capabilities within Ghanaian SMEs. Moreover, ICT capabilities exert a significant positive influence on supply chain sustainability. Importantly, supply chain fraud emerges as a mediator, elucidating its role at the nexus of supply chain sustainability and ICT capabilities.Originality/valueThis research contributes to the limited body of evidence on the interconnectedness of ICT capabilities, supply chain fraud and supply chain sustainability, particularly within the context of Ghanaian SMEs. Notably, this study pioneers an examination of the mediating impact of supply chain fraud on the relationship between ICT capabilities and supply chain sustainability.

Can government subsidies facilitate TFP growth? From the perspective of dynamic capability

Can government subsidies facilitate TFP growth? From the perspective of dynamic capability

Green supplier development and sustainable supply chain management

AbstractThe rapid rise in demand for sustainably produced goods over the last decade has made integrating environmental sustainability practices into the supply chain a strategic capability for many businesses. Despite the rapid growth of green supply chain management research, scholars have not fully examined supplier development in the context of the adoption of environmentally sustainable practices. Our study aimed to investigate the relationship between green supplier development strategies and supplier adoption of natural resource‐based view (NRBV) strategies, as well as their impact on green supply chain management (GSCM) practices. We make a significant contribution in this field by integrating a natural‐resource‐based view and a dynamic capabilities perspective to investigate how firms in developing economies overcome the environmental sustainability capability deficiencies of small and medium‐sized enterprises and are able to develop and implement environmentally sustainable practices. Based on a survey of 167 manufacturing companies in Kenya, the findings reveal that focal firms' indirect environmental sustainability supplier development strategies significantly impact environmental sustainability practices among suppliers and that the focal firm‐supplier dyadic relational capabilities significantly affected suppliers' implementation of environmental sustainability practices. Furthermore, focal firms' resource investment (financial and capital) in environmentally sustainable supply chain management programs to develop suppliers has a significant impact on suppliers' implementation of environmental sustainability practices.

Unpacking the effects of performance feedback on strategic change: the moderating role of industry conditions

Purpose This paper aims to integrate insights from the behavioral theory of the firm and the dynamic capabilities perspective to explain how the historical and social attainment discrepancies motivate firms to change. Specifically, this paper proposes that a negative historical attainment discrepancy encourages the firm to engage in strategic change to solve its performance problems. In contrast, this paper advanced that a positive social attainment discrepancy motivates strategic change as a mechanism to bolster the firm’s position within the industry. Further, this paper integrated the moderating effects of industry dynamism and industry munificence. Design/methodology/approach This paper tests hypotheses using panel data on 2,435 US public firms over the years from 1996 to 2018. This paper uses a fixed-effects regression model to empirically test these hypotheses. Findings This paper finds empirical support for the effects of both the negative historical attainment discrepancy and the positive social attainment discrepancy on the firm’s tendency to engage in strategic change. As for the hypothesized moderating effects, this paper finds that industry munificence accentuated the effects of both attainment discrepancies on the firm’s tendency to engage in strategic change. However, the results do not support the hypothesized moderating effect of industry dynamism on either of these attainment discrepancies. Originality/value This paper contributes to the research on the separate effects of historical and social comparisons within the context of strategic change. Further, the paper bolsters our understanding of how performance feedback increases the firm’s tendency to change. Finally, the paper integrates theoretical views from the behavioral theory of the firm and the dynamic capabilities perspective on how socially high-performing firms may build and sustain their competitive advantage through organizational change.

Linking the top management team transactive memory system, strategic flexibility and digital business model innovation: a dynamic capabilities perspective

ABSTRACT This study applies the dynamic capabilities perspective to explore how the top management team transactive memory system affects digital business model innovation through strategic flexibility. It proposes hypotheses regarding the relationships between the top management team transactive memory system, strategic flexibility, and digital business model innovation. Furthermore, it tests these hypotheses using the Structural Equation Model and the Bootstrapping method for the data collected from 205 Chinese firms. The results show that the top management team transactive memory system has a significant positive impact on strategic flexibility and digital business model innovation; the top management team transactive memory system can influence digital business model innovation through strategic flexibility. These findings provide a new dynamic capabilities framework for digital business model innovation from the perspective of top management team cognition and contribute to the literature on digital business model innovation from a dynamic capabilities perspective. They also provide insight into how firms can build dynamic capabilities to promote digital business model innovation.

Microfoundations of dynamic new venture partnering capabilities

AbstractManaging relationships with new venture suppliers require the adaptation of supplier management practices and routines. This research builds upon the dynamic capabilities perspective to explicate the ability to partner effectively with new venture suppliers as a dynamic capability. We argue that new venture partnering capability (NVPC) encompasses sensing, seizing, and transforming capabilities. Firms with sensing capabilities can interpret new ventures' value propositions and then match them to the needs of their business units. Seizing capabilities allow firms to coordinate and develop the relationship with a new venture supplier to capture value. Transforming capabilities enable firms to adapt resources and reconfigure their sensing and seizing capabilities. Our findings suggest that firms accelerate the transformation and strengthen dynamic NVPCs by applying entrepreneurial behavior through high‐quality and regular interactions with new venture suppliers and embedding a dedicated new venture function. We also find that dynamic NVPCs can reside at different levels and that entrepreneurial managers can stimulate the development of organizational NVPCs. In general, we provide further empirical evidence on how buying firms can more effectively leverage the potential of new venture suppliers.

Influencing factors and improvement strategies of supply chain resilience of prefabricated construction from the perspective of dynamic capabilities: the case of China

PurposeThis study adopts the perspective of dynamic capabilities to investigate influencing factors and proposes improvement strategies of supply chain resilience of prefabricated construction.Design/methodology/approachThe structural equation model (SEM) is used to identify and verify the relationship between factors influencing supply chain resilience of prefabricated construction from the perspective of dynamic capabilities. The system dynamics (SD) model is constructed to dynamically simulate the specific effects of different influencing factors.FindingsResults indicate that: (1) An evaluation index system for supply chain resilience of prefabricated construction containing five first-level indicators and 36 second-level indicators is constructed; (2) Ability to anticipate, ability to respond, ability to adapt, ability to recover and ability to learn are positively correlated with the supply chain resilience of prefabricated construction and (3) ANT3 (information system), RES1 (quick response), ADA3 (buffer stock) and LEA4 (trust) are the most leading factors influencing supply chain resilience of prefabricated construction over time.Originality/valueThis study fulfills the need for an in-depth exploration of the various influencing factors on supply chain resilience of prefabricated construction from the perspective of dynamic capabilities. Furthermore, this study provides improvement strategies to enhance supply chain resilience of prefabricated construction in China.

Strategic utilization of software patents to counteract rival penetration in the IT industry

Software patents have been shown to have a positive effect on the patenting firm’s market value. Although there is anecdotal evidence that software patents of a focal firm can adversely affect its rival firms, there is a paucity of empirical research on such competitive impacts of software patents. In order to advance our understanding of the competitive impact of software patents, we investigate the impact of a firm’s software patents on rivals’ market value using data from the US IT industries. Importantly, we consider heterogeneity across firms, in terms of their ability to successfully commercialize their patented invention, which has not been studied. Drawing upon resource-based view (RBV) and dynamic capability perspective, we examine how rival firm’s R&D capabilities might moderate such a competitive relationship. Furthermore, we theorize that firms must have supportive marketing and operations capabilities if they are to commercialize software patents and generate significant value. Specifically, our analysis of a large unique panel dataset of 563 IT firms in the United States during the period 2003–2012 indicates evidence of negative impacts of a focal firm’s software patent stock on its rivals’ market value. However, if rivals have sufficient R&D capabilities, they can mitigate the negative impacts of the focal firm’s software patents. Moreover, we find that marketing and operations capabilities indeed ensure that software patent stock has strong positive impacts on the forcal firm’s market value. Implications for research and practice are discussed.

The impact of manufacturing digital supply chain on supply chain disruption risks under uncertain environment—Based on dynamic capability perspective

In recent years, the uncertain environment such as international political turmoil and frequent public health emergencies have made the global supply chain network threatened by disruption risks. A digital supply chain provides effective ideas for firms to reallocate resources and promote high-quality development. Based on dynamic capability theory, this study explored how digital supply chain influences supply chain disruption risks through a survey of Chinese manufacturing firms, and evaluated the impact of supply chain dynamic capability and uncertain environment on the above relationships. The empirical results show that the digital supply chain can reduce supply, manufacturing, demand, and circulation disruption risks either directly or through supply chain dynamic capability. Meanwhile, the direct effects of digital supply chain on supply chain disruption risks are enhanced under a high degree of uncertain environment. The results of the study confirm the superiority of digital supply chain and provide global manufacturing firms with new strategic options in supply chain risk management.

A comprehensive mixed-methods study on cross-border e-commerce SMEs, digital transformation and dynamic managerial capabilities

The development of the digital trade ecosystem heavily relies on the expansion of cross-border e-commerce (CBEC) platforms. CBEC companies are actively involved in digital transformation (DT) initiatives to bolster their core competencies and market share. E-commerce has experienced rapid growth in recent years, particularly since the global market faced significant disruptions due to the COVID-19 pandemic in 2020. As the market continues to globalize, more Chinese entrepreneurs are shifting their focus towards the international arena. They aim to increase investments in high-tech productivity within their organizations while also concentrating on enhancing their dynamic managerial capabilities to drive transformation within cross-border e-commerce companies. Therefore, the current study examines how organizational DT impacts the management capabilities of Chinese cross-border e-commerce managers from the perspective of dynamic managerial capabilities. The research employed a mixed-method approach. Firstly, a bibliometric analysis was conducted using VOS Viewer and R studio. Data was collected from two databases, Web of Science and Scopus, to analyze publication trends across countries and identify journals with the highest number of publications and citations. This analysis aimed to provide a comprehensive understanding of the context of the subject. Secondly, seven in-depth interviews were conducted using purposive and chain-referral sampling techniques, drawing insights from CEOs based on their real-life experiences with organizational DT. The results of the study revealed that technology has led to the decentralization and flattening of organizational structures. Managers are increasingly using social platforms to connect with experts and potential collaborators. Furthermore, the study highlights the role of psychological support in bolstering dynamic managerial capabilities.

Toward a dynamic capability perspective of digital transformation in SMEs: A study of the mobility sector

Digital Transformation (DT) has been considered a critical structural change for SMEs to be responsive and agile in today's dynamic and turbulent business environments. This significance is more evident in mobility and transport systems in which the sector is undergoing radical technological changes in the context of smart cities. However, SMEs must possess some capabilities to successfully leverage DT toward better performance and gain a competitive advantage. The current research is a step forward toward achieving this goal. Using a multiple case study of mobility sector SMEs in Australia, the authors explore the nature of Dynamic Capabilities (DC) in SMEs and discover digital transformation's enablers, barriers, and performance outcomes.

The roles of history in accomplishing digital transformation: a dynamic capabilities perspective

ABSTRACT Strategy research on the uses of history in organisations have mushroomed in the recent years. While one of the main uses of history is to accommodate strategic change, little is known about the historical dynamics underpinning this process. In this study, we used the dynamic capabilities theoretical perspective to argue that the managerial ability to strategically use history is a factor related to successful strategic change. A case study of the digital transformation of a multinational ICT company was carried out to explore the strategic use of history. The company's history portrays a series of critical events which served as a basis to theorise the narrative of these past events in accomplishing digital transformation. We provided in-depth discussion of the organisation behaviours that preceded this strategic change. We contribute to literature by discussing the role of specific history-oriented practices in accomplishing digital transformation and their relationship with two emerging history-based managerial abilities.

Enterprise Digital Transformation and Compliance in Cross-Regional Development: A Dynamic Capabilities Perspective

The cross-regional development of enterprises has comparative advantages, but it also brings a new challenge to internal control. To address this challenge, this study suggests enterprise digital transformation as a solution and empirically tests the effect of enterprise digital transformation on the violation of nonlocal subsidiaries as a proxy of compliance in cross-regional development. Using the unique data from the internal control survey questionnaire of Chinese listed companies, this study measures the level of enterprise digital transformation. The empirical results reveal a significant negative correlation between the level of enterprise digital transformation and the degree of violation of nonlocal subsidiaries. The findings remain robust after a series of heterogeneity tests. The mechanism test reveals that enterprise digital transformation strengthens the governance over the violation of nonlocal subsidiaries by alleviating information asymmetry and improving internal control quality. The heterogeneity analysis addresses the issues regarding the factors influencing the effect of enterprise digital transformation including strategic focus, technical input-efficiency balance, and the role of organizational culture. And the results of heterogeneity analysis indicate that the governance effect of enterprise digital transformation is more pronounced at the business level rather than the functional level and at the transformation stage where technical investment and efficiency are balanced. Additional analysis indicates that the governance effect of enterprise digital transformation is more pronounced in nonlocal subsidiaries established through autonomous investment. Furthermore, economic benefit analysis reveals that enterprise digital transformation promotes cost reduction and the increase in efficiency in nonlocal subsidiaries. This study enriches the quantification and economic consequences of enterprise digital transformation, and it also offers valuable implications for promoting digital transformation in traditional enterprises and strengthening internal control and compliance in the context of cross-regional development.

Conceptualizing ecosystem management capabilities: Managing the ecosystem-organization interface

Manufacturers are facing increased competitive pressure to strengthen their business ecosystems in order to adapt to ongoing twin transitions toward digitalization and sustainability and their associated trends. Yet, managing such ecosystems in complex inter- and intra-organizational settings requires a profound, yet little understood, shift in the role and capabilities of internal organizational functions. This study aims to investigate the composition of ecosystem management capabilities. We employ an in-depth single case study of a leading global solution provider in the automotive and transport industry, based on 51 interviews across the ecosystem management function, various organizational functions, and ecosystem actors. Our analysis, rooted in the dynamic capabilities perspective, highlights three sets of crucial ecosystem management capabilities: ecosystem foresight, ecosystem integration, and ecosystem governance. We further detail the underlying routines and micro-foundational activities enabling these capabilities. By illuminating the key capabilities, routines, and activities of ecosystem management in a dynamic context, this study makes significant contributions to management and strategy research on ecosystems and ecosystem management in rapidly evolving business landscapes.

The effects of environmental regulations on the sustainable entrepreneurship from the perspective of dynamic capabilities: a study based on Chinese new energy enterprises

Environmental regulations play important roles in enterprises’ sustainable entrepreneurship, and their relationships are affected by enterprises’ dynamic capabilities. This paper analyzed the panel data of China’s new energy industry from 2011 to 2021, aiming to explore the impact of environmental regulations on sustainable entrepreneurship and the mechanism of dynamic capacities between them. The results include: There is an inverted U-shaped relationship between incentive environmental regulation and enterprises’ sustainable entrepreneurial performances, and there is a positive relationship between command environmental regulations and enterprises’ sustainable entrepreneurial performances; Both absorptive capacity and innovative capability of dynamic capacities negatively moderate the inverted U-shaped relationship between incentive environmental regulations and sustainable entrepreneurial performances, and negatively moderate the positive relationship between command environmental regulations and sustainable entrepreneurial performances. The results highlight the importance of dynamic capabilities for new energy enterprises, and provide a certain enlightening effect on the formulation of environmental regulation policies, as well as the application of enterprises’ dynamic capabilities.

The impact of franchisor resources, relational capital, and market responsiveness on franchisee performance: From the dynamic capability perspective

In today’s rapidly changing business environment, franchisees’ market responsiveness is a way to create a sustainable competitive advantage. Drawing on the resource-based view, dynamic capability perspective and relational view, this study examines the relationships between franchisor resources, relational capital, market responsiveness, and franchisee performance. Based on data collected from 152 franchisees in a convenience store chain in Taiwan, the analysis revealed that market responsiveness, franchisor resources and relational capital are all positively related to franchisee performance. Franchisor resources and relational capital positively affect franchisee performance both directly and indirectly through market responsiveness. Furthermore, relational capital has the strongest effect on franchisee performance.