Types Of Dynamic Capabilities Research Articles

Dynamic capabilities of the SMEs for sustainable innovation performance: role of environmental turbulence

PurposeThis study aims to investigate how dynamic capabilities, i.e. sensing, learning, integrating and coordinating trigger sustainable innovation performance. It also examines the direct and moderating role of environmental turbulence towards the sustainable innovation performance of small and medium-sized enterprises (SMEs).Design/methodology/approachThe data were collected through a cross-sectional survey of 169 SMEs in Oman and analysed through structural equation modelling using SmartPLS software.FindingsFindings of this study reveal that the sustainable innovation performance of SMEs is greatly influenced by the synergy of learning, integrating and coordinating capabilities. Notably, among these capabilities, coordinating capability emerges as the most important capability for SMEs with a primary emphasis on fostering both human and organizational well-being. However, this research reveals that building dynamic capabilities alone might not be sufficient to address social, ecological and economic sustainability criteria, and SMEs may need to extend their view beyond internal processes and integrate various environmental contingencies into their approaches while focusing on sustainable innovation performance.Practical implicationsThis research is useful for business managers while allocating resources in their business efficiently and effectively to achieve sustainable innovation performance. It also highlights that SMEs need to integrate various environmental contingencies into their approaches while focusing on sustainable innovation performance.Originality/valueTo the best of the authors’ knowledge, this study is one of the first to contribute to SME scholarship by mainly investigating the effect of specific four types of dynamic capabilities on sustainable innovation performance in a turbulent environment. This study is likely to contribute to the SMEs addressing sustainability innovation performance and develop capabilities to be sustainable in a turbulent environment.

Supply chain resilience and absorptive capacity: crisis mitigation and performance effects during Covid-19

PurposeThe purpose of this paper is to investigate the relationships of supply chain resilience (SCR) and absorptive capacity (ACAP) with firm performance by specifically examining the crisis-mitigating effects under an environmental jolt such as COVID-19.Design/methodology/approachThis paper is based on data from a questionnaire survey among Danish manufacturing and transport and logistics companies with 174 respondents.FindingsWhile the adaptive capabilities associated with both SCR and ACAP are well recognized in extant SCM literature, less is known about their boundary conditions. Examining the functioning of SCR and ACAP amid the COVID-19 crisis, this study finds that both SCR and ACAP related positively to firm performance. However, while the positive relationship between SCR and firm performance was partly mediated by better crisis-mitigation, the results of this study did not find that a similar mechanism was present for ACAP. These results suggest notable refinements of current understandings of SCR and ACAP.Research limitations/implicationsThis study is limited by the cross-sectional design, the focus on Danish companies only, and by examining only two industries. Hence, comparisons to other countries and other industries would be of significant interest.Practical implicationsInvesting in SCR and ACAP to different extents provides for a complementary mix of longer-term opportunity-generating dynamic capabilities and more short-term crisis-mitigating dynamic capabilities. Firms will benefit from both types of dynamic capabilities during a crisis, but the latter will be more important for mitigating specific crisis impacts.Originality/valueThis paper extends current theorizing on ACAP and SCR by adding the distinction between the long-term opportunity generating dynamic capabilities and short-term crisis-mitigating dynamic capabilities. This paper provides novelty by empirically examining this theorizing by investigating the performance- and crisis-mitigating effect of SCR and ACAP in the light of the COVID-19 crisis.

Building Dynamic Capabilities and Organizational Resilience in Tourism Firms During COVID-19: A Staged Approach

Using dynamic capabilities (DCs) and the disaster/crisis management cycle (DMC) as the theoretical lens, this study explores how different types of DCs build and sustain organizational resilience of tourism firms during COVID-19. Taking a processual view, the study advances theorization of the relationship between DCs and organizational resilience in tourism studies. A qualitative study of 30 owners and senior managers of tourism and hospitality firms in Bangladesh reveals that threats and opportunities presented by the COVID-19 pandemic activated 10 different types of DCs (replicating, integrating, reconfiguring, creating, developing, assimilating, renewing, adaptive, innovative, and regenerative) across the pre, response (short-term) and future recovery intentions (long-term) stages. DCs activated different resilience facets (networks and relationships, leadership and culture, and change ready), highlighting the criticality of achieving planned and adaptive resilience for tourism firms during COVID-19. Response and recovery implications for tourism firms during disruptive events are suggested.

Relationship between CEO’s strategic human capital and dynamic capabilities: a meta-analysis

In this paper we study the association between Chief Executive Officers’ strategic human resource capital, dynamic managerial capabilities, and firms’ dynamic capabilities. This study identifies the Chief Executive Officer (CEO) variables reported in the literature, and estimates the correlation of each CEO variable with the dynamic capabilities. In addition, the moderator effect of the three types of dynamic capabilities is estimated. This paper applies a meta-analysis using structural equation modeling by means of the three-level random-effects model on 446 correlations, which account for 52,767 CEOs around the world. The findings show a positive correlation of CEO education (ρ = .113), CEO personality (ρ = .162), and leadership styles (ρ = .306) with dynamic capabilities. In addition, dynamic managerial capabilities totally mediate the relationship between education and dynamic capabilities and partially the relationship of CEO personality and leadership styles with dynamic capabilities.

Achieving Competitive Advantage Through Dynamic Capabilities: A Study of ICT Industry in Sri Lanka

The current study investigates the impact of dynamic capabilities on competitive advantage of ICT industry in Sri Lanka considering the three categories of dynamic capabilities namely adaptive capabilities, absorptive capabilities and innovative capabilities. Convenient sampling was used to draw the sample and survey data were collected from 167 ICT firms. Structural Equation Modeling (SEM) was used to analyze the relationship between variables. Finding of the study shows that dynamic capabilities have significantly positive impact on competitive advantage. In addition, the empirical evidence verifies that, innovative capabilities are more positively related to competitive advantage than other two types of dynamic capabilities while adaptive and absorptive capabilities also show the positive impact on competitive advantage.

Microfoundations of dynamic design capabilities: An empirical analysis of “excellent” Italian design firms

AbstractThis article investigates how managers of firms awarded for their design excellence build organizational‐level design‐related dynamic capabilities by selecting designers with specific individual capabilities and managing how and the extent to which users of the firms’ products are actively involved in design activities. The following two types of dynamic capabilities were studied: user‐centered design (UCD) and meaning innovation (MI). Data from a survey of managers of 106 Italian firms recognized for their products’ “design excellence” during the 2011–2016 period were analyzed using a structural equation model (PLS‐SEM). The results suggest that managers seeking to build dynamic UCD capabilities prefer designers with holistic thinking capabilities over those with ideation and envisioning capabilities and value user involvement throughout the design process. In contrast, managers seeking to build dynamic MI capabilities search for designers with holistic thinking and envisioning capabilities and avoid ideation capabilities. They also consider the value of involving users in the design process to be limited. This study is among the first to present the results of an empirical investigation of the microfoundations of dynamic design capabilities. Limitations of the research and prospects for future work are discussed. In particular, our findings point to the need for additional studies that further specify the routines and associated competencies that managers responsible for design employ to attract, nurture, integrate and exploit the micro‐level capabilities required for UCD and MI. Given that some of these microfoundations were found to be differentially important, unimportant, or even detrimental to the development of either UCD or MI, an important remaining question is the extent to which, and how, a single firm can accommodate and effectively exploit both of these dynamic design capabilities.

How hotels adjust technology-based strategy to respond to COVID-19 and gain competitive productivity (CP): strategic management process and dynamic capabilities

Purpose The purpose of this study is to explore how hotels evolve their dynamic capabilities to adjust their technology-based strategy to improve performance and to gain competitive productivity (CP) during the COVID-19 pandemic and in the aftermath. Design/methodology/approach In-depth interviews with hoteliers were conducted to unveil their dynamic capabilities amid the pandemic as regard adjustments and performance of self-service technology (SST)-based strategies. Thematic analysis was used to analyze the data. Findings Data analysis revealed four types of dynamic capabilities (i.e. sensing, learning, integrating and coordinating capabilities). Equipped with these capabilities, hotels made minor adjustments to their SST strategies. In general, during an economic downturn, hotels refrained from introducing new SSTs. SSTs introduced before the pandemic were used more frequently and received enhanced customer feedback. The findings further revealed that the factors influencing hotels’ application of SSTs before and after the outbreak of COVID-19 remained similar. Originality/value This is the first research integrating CP, dynamic capabilities and strategic management process to explain how hotels adjust technological strategies to recover in a suddenly changed environment. Such a framework enables scholars and practitioners from content-oriented and process-oriented perspectives to make quick but sound strategic management decisions in adapting to turbulent environments. This timely study enriches the expertise of using technology as a recovery strategy and contributes to future research on the practical application of SSTs and crisis management.

Organizational Search, Dynamic Capability, and Business Model Innovation

This paper explores how to promote business model innovation through intraindustry search and extraindustry search with the assistance of fit dynamic capabilities (internal coordination capability and stakeholder engagement capability). Based on evolutional learning and business model literatures, six hypotheses are proposed and examined with data from 204 firms in China. The results show that intraindustry search has an inverted U-shaped effect on business model innovation, whereas extraindustry search has a positive effect. Internal coordination capability strengthens the effect of intraindustry search but weakens that of extraindustry search. Stakeholder engagement capability strengthens the effect of extraindustry search but weakens that of intraindustry search. Our findings enrich the business model literature by identifying different roles of intraindustry search and extraindustry search as the antecedents of business model innovation and their fitness with different types of dynamic capabilities.

Dealing with surprise attacks: decomposing ERM as a dynamic capability to handle crises

PurposeTurbulent hypercompetitive market conditions make small and medium enterprises (SMEs) vulnerable to abrupt crises caused by unexpected competitor moves. In these situations, enterprise risk management (ERM) can serve as a dynamic capability (DC) to overcome the impending crisis and improve SMEs' survival rates. To explore this capacity, which has only been vaguely addressed in prior research, we conduct an exploratory, abductive study to update the extant (ERM and DC) literature with empirical evidence from expert interviews.Design/methodology/approachWe conduct an exploratory, abductive study using empirical evidence from expert interviews.FindingsOur findings reveal ERM as a second-order DC in the micro-foundational components of competitive intelligence gathering, alliance building and integrative capabilities. We find that competitive intensity and government policy moderate the effects of these foundational capabilities. Finally, our study proposes a survivability model that provides new valuable knowledge of ERM as a DC for SMEs to deal with competition-driven crises.Originality/valueThis research survivability model shows how ERM as DC can facilitate the survivability of SMEs against competitive surprises. Although restricted to crises arising out of competitive surprises, this study provides valuable knowledge to the literature on what type of DCs are useful for specific situations. The study findings not only extended Teece's (2007) DCs framework to competitive crises but also placed it within a hierarchy of capabilities. The research findings indicate that an ERM culture in SMEs promote the growth and development of sensing, seizing and reconfiguring capabilities, vital for tiding competitive crises.

SMEs’ dynamic capabilities and value creation: the mediating role of competitive strategy

PurposeThe purpose of this research is to explicate the role of dynamic capabilities in the ability of small- and medium-sized enterprises (SMEs) to create value and also investigate the relationship among different dynamic capabilities, competitive strategy and SMEs’ value sources.Design/methodology/approachEmpirical evidence based on a survey conducted on a sample of 441 UK-based SMEs was used to test the research hypotheses.FindingsThe findings illustrate that sensing, learning, integrating and coordinating capabilities play a significant role in SMEs’ value creation, and competitive strategy mediates the impact of dynamic capabilities on value creation.Research limitations/implicationsThis study demonstrates the benefits of understanding the relationship among the four types of dynamic capabilities, competitive strategy and value creation. Moreover, this study contributes to the notion of the contingency nature of dynamic capabilities.Practical implicationsIt offers managers insight into the aspects on which to focus their efforts to enhance their firm’s capacity of value creation.Originality/valueWhile much of the prior studies have conceptually/qualitatively investigated the financial return of uni-dimensional dynamic capabilities of large firms in the manufacturing sector, this study made a significant effort to quantitatively examine the non-financial value potential of SMEs in service sector through four processes of dynamic capabilities.

Dynamic capabilities triggered by cloud sourcing: a stage-based model of business model innovation

Current research offers very limited insights on the process of how the adoption and continued use of cloud sourcing might trigger and push the development of business model innovation and affect the competitive advantage of a firm. Applying an abductive approach, with two longitudinal case studies of cloud sourcing firms, and a theoretical framework based on stage-based models of business model innovation and the dynamic capability view of the firm, we develop a model of stage-based business model innovation related to the adoption and continued use of cloud sourcing. The model identifies three business model innovation stages characterized by specific types of capabilities. In between the three stages, we identify three dynamic junctures that the firm and its managers have to overcome to progress from one stage to another. In the dynamic junctures three types of dynamic capabilities were key; sensing, seizing and transformation capabilities, to pass to the next stage. The model contributes to a better understanding of the evolution of dynamic capabilities as well as the evolution of the cloud sourcing firm and cloud-based business model innovation.

Too Much of a Good Thing? The Nonlinear Effect of Dynamic Capabilities on New Venture Survival

This research conceptualizes and then shows how one type of dynamic capability - network capability - does not always have a positive relationship with the survival of new technology-based ventures...

A Dynamic Capabilities Approach to Middle-Market Firms’ Global Expansion

In this paper, we utilize the dynamic capabilities framework to investigate how firms expand internationally. Using the case study methodology, we analyze four middle-market firms operating in similar industries but making different internationalization choices. Through theoretical and literal replications, our results provide some support to two propositions. First, each type of dynamic capabilities is associated with some (but not all) specific choices (why, when, where, what, and how) for a firm’s internationalization process. Second, the outcomes of a firm’s internationalization process are contingent on the combination of the types of dynamic capabilities mastered by the firm.

Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems

For firms at the center of platform-based ecosystems, Teece (2018) argues that dynamic capabilities can enable the firms to create and capture value by building ecosystems and designing appropriate business models. In line with the original Profiting From Innovation (PFI) framework, Teece (2018) also argues that complementary asset providers may be able to capture substantial value. Here we provide a theoretical analysis that explains the ways in which dynamic capabilities underpin not only value creation but also value capture by platform leaders. We propose that three types of dynamic capabilities at a minimum are critical for platform leaders: innovation capabilities, environmental scanning and sensing capabilities, and integrative capabilities for ecosystem orchestration. We further argue that integrative capabilities play a key role in improving the ability of platform leaders to capture value.

The resilient retail entrepreneur: dynamic capabilities for facing natural disasters

PurposeThe purpose of this paper is to investigate the formative dimensions of organizational resilience – namely dynamic capabilities (DCs) and social capital – displayed by retail entrepreneurs in the face of natural disasters (i.e. the 2012 Emilia earthquake). The paper evaluates social capital and the various types of DCs that support small entrepreneurs’ resilience during three temporal units of analysis: before the earthquake, during the emergency period, and during the recovery process.Design/methodology/approachThe study was performed by applying a qualitative approach based on two focus groups and a double set of semi-structured interviews administered to a sample of eight small retail entrepreneurs hit by the 2012 Emilia earthquake. Content analysis was then applied.FindingsThe findings show that DCs and social capital are instrumental to enhancing organizational resilience; moreover the contribution of each category of DCs (reconfiguration, leveraging, sensing and interpreting, learning and knowledge integration) and social capital to entrepreneurs’ resilience changes according to the temporal phase of the natural disaster under analysis.Research limitations/implicationsThis study will provide small retailer entrepreneurs and public authorities with useful insights on how DCs and social capital can practically support recovery paths at different times in the occurrence of a natural disaster.Originality/valueThis study contributes to the scientific debate on organizational resilience in disaster management, studying it through the lens of DCs and social capital, and analyzing the role of different types of DCs in developing entrepreneurs’ resilience during the various periods of a natural disaster. Moreover, it contributes by applying the concepts of resilience and DCs to a poorly investigated entrepreneurial context such as the retail one.

Dynamic and Integrative Capabilities for Profiting From Innovation in Digital Platform-Based Ecosystems

For firms at the center of platform-based ecosystems, Teece (2017a) argues that dynamic capabilities can enable the firms to create and capture value by building ecosystems and designing appropriate business models. In line with the original Profiting From Innovation (PFI) framework, Teece (2017a) also argues that complementary asset providers may be able to capture substantial value. Here we provide a theoretical analysis that explains the ways in which dynamic capabilities underpin not only value creation but also value capture by platform leaders. We propose that three types of dynamic capabilities at a minimum are critical for platform leaders: innovation capabilities, environmental scanning and sensing capabilities, and integrative capabilities for ecosystem orchestration. We further argue that integrative capabilities play a key role in improving the ability of platform leaders to capture value.

THE ROLE OF ONTOLOGICAL LEARNING LEVELS IN DEVELOPING DYNAMIC CAPABILITIES

This paper explores the links between the fields of dynamic capabilities and organisational learning (OL), emphasising the role of the different ontological learning levels. The resource-based view (RBV) is pinpointed as the key origin of the dynamic capabilities view (DCV), in connection with OL and knowledge management. Ontological learning levels are identified as key OL stages. The knowledge-based view (KBV) of the firm is introduced as a key link between OL processes and dynamic capabilities development. Specifically, we propose a novel and integrative framework for understanding the role that the RBV, the DCV, OL, and the KBV, have, in an inter-connected way, have played in achieving a progressively deeper understanding of the key internal sources of competitive advantage. Accordingly, our paper opens interesting opportunities for future inquiry, e.g., studying how different ontological learning levels may distinctively influence the development of particular types of dynamic capabilities (e.g., in design, marketing, etc.).

Organizational Search and Novelty-centered Business Model Design

This study explores how to promote novelty-centered business model design through intra-industry search and extra-industry search with the assistance of combinative capability and stakeholder management capability. Based on organizational learning and business model literature, 6 hypotheses are proposed and examined with data from 204 firms in China. The results show that intra-industry search has an inverted U- shaped effect on novelty-centered business model design, while extra-industry search has a positive effect. Combinative capability strengthens the effect of extra-industry search on novelty-centered business model design. Stakeholder management capability strengthens the effect of extra-industry search while weakening that of intra-industry search. Our findings enrich evolutionary learning stream of business model literature by identifying different roles of intra-industry search and extra- industry search as the antecedents of business model design and their fitness with different types of dynamic capabilities.

Dynamic capabilities and radical innovation performance in established firms: a structural model

ABSTRACTThe paper extends Teece’s model of dynamic capabilities (2007) into four types of capabilities: sensing, coordination, autonomy and reconfiguration capabilities. We further develop a structural model between four types of dynamic capabilities and radical innovation performance (RIP) in established firms. Based on a dataset of top 500 manufacturing established firms in Taiwan, the proposed hypotheses are tested using the structural equation models. The results reveal that four types of dynamic capabilities and RIP are positively correlated in a sequential and structural manner. This paper concludes the systemic development of dynamic capabilities can improve RIP in established firms. Finally, we point out some managerial implications for improving RIP in established firms.

Dynamic Capabilities in Complex Projects: The Case of London Heathrow Terminal 5

Whereas existing approaches and empirical studies of dynamic capabilities focus on the strategic innovation activities of firms (i.e., permanent organizations executing multiple projects and programs), this article identifies how certain types of dynamic capabilities are required to deliver large, complex, and risky projects involving multiple parties. Our longitudinal study of the design and construction of Heathrow Airport Terminal 5 by the British Airports Authority (BAA) makes three main contributions to the literature: (1) It contributes to the project management literature by identifying how specific dynamic capabilities (BAA's “T5 Agreement,” strategic behaviors, and collaborative processes) are developed through a three-phase process (learning, codifying, and mobilizing) to support the strategic management of complex projects. (2) While emphasizing their importance for the successful management of complex projects, our findings also underline the continuing fragility of dynamic capabilities. (3) The case study reveals their fluidity and balancing role with respect to demands for stability and change in complex, uncertain, and volatile project environments.