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Trying to Become a Different Type of Company: Dynamic Capability at Smith Corona
Strategic Management Journal
Abstract
Smith Corona, formerly one of the world's leading manufacturers of typewriters, was challenged to exercise dynamic capability in the face of the dissipation of its main product category. A study of the last two decades of the life of the company shows how Smith Corona tried to alter its resource base by leveraging existing resources, creating new resources, accessing external resources, and releasing resources. Using the extended case method, this study advances dynamic capability theory by confronting it with an empirical case. The Smith Corona case provides rich insights into the resource alteration processes by which dynamic capability operates, and highlights resource cognition as a missing element in dynamic capability theory. Copyright © 2010 John Wiley & Sons, Ltd.
... Another way to foster identity and a mind-set change is the bottom-up approach-that is, developing capabilities that later shape the mind-set and even the entire identity of a firm (Töytäri et al., 2018). Identity change thus calls for managerial cognitive capabilities (Danneels, 2011;Helfat & Peteraf, 2015;Schilke et al., 2018) and the ability to create a shared understanding of the future vision and position among organization members. In the linear economy, incumbent firms typically hold an identity linked with a take-make-sell-dispose, product-oriented approach (Huikkola et al., 2020). ...
... Typically, firms try to maximize their power positions and mitigate competitive forces (Bäck & Kohtamäki, 2015), as the profitability level depends on the bargaining power of clients and suppliers (the lower, the better), the level of existing (direct) competition (the lower, the better), and the threat of new substitutes and rivals (indirect or future competition; the lower, the better) (Porter & Heppelmann, 2014). Hence, organizations must constantly evaluate their capability-enhancing actions (e.g., recruitments, acquisitions, alliances, and divestments; see Danneels, 2011) that facilitate movement toward their desired position. Simultaneously, managers must consider these actions' farreaching consequences (e.g., responses from existing and future clients and competitors, the entire ecosystem's competitive position in turf wars; see Vuori & Tushman, 2024). ...
... A capability change indicates an organization's exercise of its dynamic capabilities (Danneels, 2011;Eisenhardt & Martin, 2000). A capability evolution is supported by managers' ability to observe, screen, and seize new business opportunities, for instance, opportunities created by customer preference, technology development, or legislation changes (Bocken & Konietzko, 2022;Ott & Eisenhardt, 2020;Teece, 2007). ...
This study aims to understand how organizations within modern waste-management ecosystems pursue strategic change from a linear economy to a circular economy logic. This paper draws on complementary firm theory perspectives to examine the interplay of management practices that enable organizations in waste-management ecosystems to become circular by altering their identities, capabilities, power positions, and boundaries. Based on an in-depth study of organizations in one waste-management ecosystem in Finland, this study identifies several management practices associated with identity and capability-building, repositioning, and boundary decision-making that facilitate the green transition. This study enables managers to benchmark systemic transitions in established, conservative, and regulated organizations and ecosystems and highlights that the implications of strategic practices extend beyond focal companies.
... Kaplan and Henderson (2005) assert that these capabilities stem from the concepts and interpretations managers hold regarding their operational processes (Riana et al., 2023). Danneels (2011) highlights that managerial interpretations shape the nature and efficacy of procedures and capabilities over time (Pryor et al., 2015). Managers often resort to traditional search mechanisms when interpreting events as threats, which can inhibit the pursuit of complex and nuanced information (Li et al., 2018). ...
... The confirmed negative relationship between threat-oriented interpretation and innovation capacity indicates that when managers view climate changes as threats, they tend to rely on traditional information search mechanisms rather than seeking novel information (Staw et al., 1981). This limits the organization's ability to effectively utilize its innovation capacity, supporting previous work by Eggers and Kaplan (2013) and Danneels (2011). ...
One of the dire concequences of innovation is rapid reaction to developments and changes in the environment, and this depends on the managers' ability to reflect on the changes in the environment and various aspects of business. The aim of this study is to investigate the effect of threat-oriented interpretation in climate changes on innovation and its dimensions (behavioral innovation, product innovation, process innovation, market innovation, and strategic innovation). Statistical population of this research consists of executives who belong to chemical and petroleum industries listed on the stock exchange. The data was collected using questionnaires from 79 companies. Structured Equation Modeling (SEM) and Partial Least Squares (PLS) methods were employedto analyze the data. The results showed that the threat-oriented interpretation in climate change has no direct effect on innovation. However, it indirectly and negatively affects innovation. The innovation capacity generally mediates this relationship.
... However, radical innovations are often not realized in incumbents (Ansari et al., 2010;Chandy and Tellis, 2000). Common internal reasons for this include a lack of according structure and setup Raisch and Birkinshaw, 2008), innovation processes (Eggers and Park, 2018;Garud et al., 2013), and capabilities (Dosi et al., 2000;Phillips and Pandza, 2023) needed to overcome cognitive inertia of relevant decision makers (Ansari and Krop, 2012;Bettis and Prahalad, 1995;Danneels, 2011;Garud and Munir, 2008;Kammerlander et al., 2018;Tripsas and Gavetti, 2000). The development of radical innovations is difficult, and it is compounded by the ambiguity and uncertainty surrounding the process as it unfolds within the organization (Anderson et al., 2014;Š kerlavaj et al., 2014). ...
... This substantially adds to prior research. Existing studies on radical innovation demonstrate how inertial forces inhibit the development and implementation of radical ideas (Ansari and Krop, 2012;Bettis and Prahalad, 1995;Danneels, 2011;Garud and Munir, 2008;Tripsas and Gavetti, 2000) and suggest strategies to counteract this Eggers and Park, 2018;Garud et al., 2013;Phillips and Pandza, 2023;Raisch and Birkinshaw, 2008). However, in the context of this study, strategic leaders were actually developing ideas for radical innovation in a proactive, rather than inertial, manner; nonetheless, the ideas still eroded. ...
Understanding what impedes and facilitates radical innovation is crucial. This study introduces a process perspective on managerial cognition into the strategic leadership literature to elucidate the dynamics that contribute to idea erosion during the development of radical innovation. Employing a framing perspective and utilizing longitudinal data from a single case, this study presents a process model of strategic leaders' framing-induced idea erosion. At the heart of this process are two dynamics. First is a dynamic consisting of the anticipation of innovation that fails to account for the necessary iterative process, leading to a growing mismatch between expectations and activities. Second is a dynamic consisting of cognitive processes, where strategic leaders frame this mismatch as a failure, this intensifying over time. This study shows that strategic leaders tend to favor incremental over radical innovation, not due to a shortage of ideas but because they frame their activities as failures.
... Cognitive ambidexterity may in fact mitigate cognitive inertia by accelerating the perception of the inadequacy of extant cognitive structures (Todorova & Durisin, 2007). The tendency to assimilate knowledge with inadequate cognitive structures is widely acknowledged as major source of failure, with examples from industries as diverse as analog cameras, newspapers, and typewriters (Danneels, 2011;Gilbert, 2005;Tripsas & Gavetti, 2000). Precisely because of their proved effectiveness, cognitive frames that helped firms to be successful in the past may turn into hindrances (Tripsas, 2009). ...
... The complexity, cost, and path dependence inherent in this bundle of resources and capabilities make imitation difficult, likely resulting in sustainable competitive advantage. Furthermore, cognitively ambidextrous firms are more likely to be resilient to change, as the coordination of AI-relevant and domain-specific knowledge favors not only a constant alignment of AI algorithms to changing conditions, but also an update of human cognitive structures, mitigating cognitive inertia (Danneels, 2011;Gilbert, 2005;Tripsas & Gavetti, 2000;Tripsas, 2009). While being coherent with the status of tech giants like Alphabet and Meta (Jacobides et al., 2021), findings suggest that smaller firms may equally benefit from AI-centric mechanisms of knowledge absorption (e.g. by skillfully using AI to remedy data scarcity). ...
... Building on Danneel's (2007) use of the extended case method (Burawoy, 1991(Burawoy, , 1998, we extend the resource orchestration model to the study of natural resources (see also Danneels, 2002Danneels, , 2003Danneels, , 2011. The extended case method relies on "[i]n-depth, holistic study of single or multiple cases in context to extend or elaborate existing theory" (Lê & Schmid, 2019, p. 124) and guides "the researcher [to] examine the literature relevant to his or her problem area, and employ the empirical data to fill in its gaps, reveal its flaws, elaborate its meaning, and extend its coverage" (Danneels, 2007, p. 514). ...
... The extended case method leads to generalization through the reconstruction of theories (Burawoy, 1991, p. 274). While Danneels mobilizes the method in the context of multiple cases (see Danneels, 2002Danneels, , 2003Danneels, , 2007Danneels, , 2011, the extended case method can also be applied to single cases (e.g., Zander & Zander, 2005). This approach is particularly relevant in the context of resource-based studies (e.g., Bruni & Verona, 2009). ...
Recognizing that management scholarship does not adequately address the preservation of natural resources, an ecological resource orchestration model is introduced in this article. To this end, we build on the case of Poiscaille, a French online platform that offers a distribution model for ultrafresh fish and seafood with a goal of preserving the ocean for future generations. Using the extended case method, this study advances the resource orchestration model through an empirical case. The Poiscaille case provides rich insights into the resource orchestration model by showing how it fosters the sustainable management of natural resources. Thus, this article contributes to natural resource management research and to the resource-based view literature.
... (On the importance of alertness to such hunches see Locke, Golden-Biddle, & Feldman, 2008;Saertre & Van de Ven, 2021.) Single case studies can be powerful means for theory development (e.g., Danneels, 2011;Logue & Grimes, 2022). They allow scholars to gain theoretical insights about organizational phenomena (such as BMI) that are complex, dynamic, and not easily observable to outsiders (Ozcan et al., 2017). ...
Research Summary
This study explores why and how founders' values lead them to design novel business models. To address these questions, we conducted a historical case study of Magnum Photos, a photo agency whose novel business model revolutionized magazine photography in the mid‐20th century. Our abductive analysis reveals that personal values can be a principal driving force for business model innovation (BMI). Actors who believe that their personal values are difficult to reconcile with existing business models engage in BMI to retain control over activities that are perceived to be central to their values. Our findings highlight values as an important and hitherto under‐studied antecedent of BMI and of entrepreneurial innovation and strategy more generally.
Managerial Summary
What drives business model innovation in startups? Our study finds that personal values can be a powerful force. Through an in‐depth historical analysis of Magnum Photos, a pioneering photo agency, we reveal how its founders' commitment to creative freedom and integrity led them to reject conventional business models and design an entirely new one. Unlike traditional agencies, Magnum's founders saw certain activities—such as taking, editing, and distributing photographs—as inseparable. This led them to create a cooperative model where photographers retained full control over their work. The new business model not only protected their values but also reshaped the photojournalism industry. This study highlights an overlooked driver of innovation: when personal values clash with existing models, entrepreneurs may be compelled to create new ones.
... Strategic renewal is frequently discussed, yet rarely defined with precision. Research referring to "SR" often serves as a catalyst for presenting examples of strategic change in general, with most examples focusing on the change process, particularly in terms of organizational resources and capabilities (Danneels, 2011). Although some research has directly focused on strategic renewal (such as studies by Huff et al., 1992;Floyd and Lane, 2000), these studies also tend to focus on organizational processes (Agarwal & Helfat, 2009). ...
... Применимость теории подрывных инноваций была проверена на материале различных отраслей (Christensen, Bower, 1996;McKendrick et al., 2000;Danneels, 2011), однако последующий независимый анализ поставил под вопрос исходные выводы (King, Baatartogtokh, 2015). Более тщательное тестирование при помощи серии специальных опросов и экспертных интервью позволило получить детальную картину по всем 77 кейсам, которые Кристенсен приводил в качестве примеров подрывных инноваций (Christensen, 1997). ...
Управленческий консалтинг принадлежит к числу самых динамично растущих секторов современной мировой экономики, отличающихся высокой устойчивостью к колебаниям макроэкономической конъюнктуры. Тем не менее исследователи отмечают подрывные тенденции в глобальном консалтинговом бизнесе, связанные с распространением цифровых технологий, в особенности аналитики больших данных и искусственного интеллекта, и прогнозируют их разрушительные последствия для традиционных лидеров индустрии. В попытке разобраться с обоснованностью подобных оценок автор статьи последовательно анализирует специфику отраслевого ландшафта управленческого консалтинга и его эволюцию, исследует ключевые факторы подрывных изменений, которые несет для индустрии углубление цифровизации, и рассматривает основные механизмы, применяемые глобальными лидерами отрасли для адаптации к стремительно развивающейся среде. Показано, что, несмотря на вызовы цифровой трансформации, ведущие игроки мирового рынка консалтинговых услуг не только продолжают динамичный рост, сохраняя конкурентные позиции, но и ведут активную экспансию в новые рыночные сегменты, порождаемые цифровыми сдвигами.
... Leih and Teece (2016) builds on the above in the study "Campus leadership and the entrepreneurial university: A dynamic capabilities perspective" published in AMP. The authors empirically apply the dynamic capabilities framework to investigate how organizations evolve and maintain evolutionary fitness through astute adaptation, by entrepreneurial top management, to a series of discrete shifts in the external environment (see also Adner & Helfat, 2003;Danneels, 2011;Helfat et al., 2007;O'Reilly & Tushman, 2011;Rosenbloom, 2000). The article provides a practical interpretation of adaptive evolution and examines the dynamic capabilities of nonprofit organizations. ...
In this issue of the Academy of Management Collections, we curate a set of articles on dynamic capabilities from Academy of Management journals that showcase how dynamic capabilities interact with the external environment. Dynamic capabilities were originally conceived as a means by which firms can attain “evolutionary fitness” with their changing business and macro (societal and natural) environments. Despite the importance of environmental change in the original conceptualization of dynamic capabilities, subsequent studies focused on the effects of dynamic capabilities within firms. By analyzing articles in this collection, we develop a typology of approaches to examine the dynamic capabilities–environment nexus that involves (a) the functions that dynamic capabilities perform regarding the environment (adaptation or shaping), and (b) the evolution of the external environment (discrete or continuous change). Scholars have thus far primarily focused on adaptation to discrete changes in the external environment, and we argue for greater attention to the shaping function of dynamic capabilities and to continuous environmental changes. This collection reveals the potentials of an adapting–shaping view of dynamic capabilities and a renewed focus on the dynamic capabilities–environment nexus for improving our understanding of how entrepreneurial managers chart an organization’s path via dynamic capabilities.
... Innovation scholars often use DC theory (Chirumalla, 2021;Demeter et al., 2021;Khan, 1999;Mortati et al., 2023), for example, to study leading firms in particular industries (Subramanian et al., 2011;Enkel and Sagmeister, 2020) or their non-leading counterparts in these industries (Danneels, 2011). However, despite various attempts to decouple the definition and measurement of a DC from those of firm performance (e.g., Eisenhardt and Martin, 2000;Helfat et al., 2007;Zahra et al., 2006), many scholars have criticized DC theory for suffering from a tautology problem (e.g., Michaelis et al., 2021;Wang, 2007;Wheeler, 2002), especially when measurements of DC published in 1969). ...
Dynamic capability (DC) theories are widely used by innovation scholars, but there is little empirical work that applies these theories in ways that can be used by practitioners. Moreover, DC studies tend to suffer from tautological issues when measurements of DC overlap with those of firm performance. To fill this void, this paper explores how scholars can help companies in creating a dynamic capability. We adopt a design science approach in which scholars and practitioners team up to address and resolve a focal firm's (micro-DC) challenge in managing a large number of product development projects that run simultaneously but all depend on the same resource pool. To address this challenge, we design and implement a process technology tool. This study thus demonstrates how one can solve a real-life DC challenge by developing a practically relevant solution, based on design science.
... However, in such cases, it is the study author's responsibility to provide an argument for this position and connect it to the specific qualitative approach being adopted (Bettis et al., 2015). This often entails (1) a strong pitch regarding the lack of knowledge on a specific research question central to the dynamic capabilities framework and (2) a description why the research question calls for a specific qualitative approach, such as a single (Danneels, 2011) vs. multiple case study (Martin, 2011) or a decidedly inductive design (Salvato, 2009) vs. one that emphasizes theory elaboration (Schulze & Brusoni, 2022). This brings us to our next recommendation. ...
The literature on dynamic capabilities has long faced the challenge of empirically investigating a concept that is inherently intangible, complex, and organization-specific. Empirical clarity is crucial because dynamic capabilities are argued to be essential for achieving sustainable competitive advantage in changing environments, and only empirical research can validate this claim. Despite significant advancements, issues related to measurement, methodologies, and the robustness of findings persist. This article addresses these concerns by offering key recommendations for empirical research in this domain. First, we underscore the importance of construct validity and the need for clear definitions and focused dimensions of dynamic capabilities. Second, we recommend empirical designs with time lags between the measurement of dynamic capabilities and their antecedents or outcomes, and sector-specific studies to capture the temporal dynamics and contextual nuances. Third, we encourage leveraging established survey measures, close proxies in archival research, and innovative experiments and qualitative methods. Finally, we highlight the potential of multimethod approaches to triangulate findings and enhance theoretical insight. Our hope is to help future researchers address the unique challenges of studying dynamic capabilities empirically, paving the way for continued progress in this significant field of strategic management.
... Dynamic Capability View Theory involves longitudinal perspective, allowing investigation of the changes and the continuity in the pattern of organizational behavior over time (Danneels, 2010). During the last decades, there has been an intensive quest for the search of dynamic theory of strategy's detailed longitudinal case studies covering long periods of time because they are necessary for studying these phenomena (Porter, 1991). ...
Every organization strives to achieve the best market position, attain a competitive edge, maintain high performance and end up being a market leader. However many firms start on the right foot but as the time progress some fall or failto achieve the same. This study looked at the role of initial condition in attaining competitive advantage as well as the overall performance. The research was a census of the commercial banks sector and the findings revealed that the initial conditions do not influence the performance though contributesgaining competitive advantage.The study looked at the moderating role of dynamic capabilities on the relationship between initial conditions and performance. The findings show initial conditions effect on performance diminisheswith time. However dynamic capabilities are found toplay moderating role in the relationship between initial conditions and performance of commercial banks in Kenya. The study recommends that all banks staff be educated on the various categories of dynamic capabilities to enable the utilize them to improvetheir performance and well as gaining competitive advantage. Keywords: Performance, Initial Conditions, Dynamic Capabilities
... Gambardella and McGahan 2010;Min and Chaiy 2014;, addressing the volatility and unpredictability inherent in high-tech, rapidly evolving sectors (Barney 1991;Christensen 1997). By focusing on the Space Economy, we offer insights into how firms must adapt their entry strategies to accommodate the specific demands of this environment, including the fast pace of technological change (Danneels 2018), high capital requirements and risks (Tushman and Anderson 2019), and stringent regulatory and environmental constraints (Diederen 2017). These findings enhance both academic and practical understanding, providing a nuanced perspective on market entry in sectors that differ markedly from traditional business landscapes. ...
... Our data analysis was based on longitudinal qualitative research to study the evolution of single firms and their environments (e.g., Burgelman 1991, Danneels 2011. We studied the ICRC as a complex social system with the objective of building theory through a combination of grounded theorizing and historical methods (Burgelman 2011). ...
Humanitarian organizations assisting victims of armed conflict face fragmented and potentially conflicting temporal demands on strategy making. Annual donor funding requires detailed planning, unpredictable outbreaks of war and violence demand quick and flexible decisions, and long-term societal challenges must be addressed over the next decades. Few studies have examined how organizations can achieve temporal fit in such temporally complex environments without accepting internal fragmentation or decoupling from certain temporal demands. We draw on a longitudinal case study of the International Committee of the Red Cross (ICRC), a humanitarian organization with the mandate to aid victims of armed conflict, to explore this gap. We find that the ICRC has developed a repertoire of multiple distinct strategy processes tailored to the fragmented temporal demands. These processes include emergency responses, strategic planning, and long-term strategizing. Although each strategy process retained its distinctiveness, their loose coupling ensured a sufficient alignment of resource allocation in pursuit of the organization’s humanitarian mandate. Strong shared principles and an episodic activation of strategy processes helped to manage the inherent complexity of loose coupling. Thus, strategy process repertoires may form a capability supporting strategic decision making in temporally complex environments. Our study contributes to strategy process research by introducing loose coupling as a mechanism for integrating multiple strategy processes with different temporalities, complementing previous studies on strategy processes as a tightly coupled structural context. Furthermore, we advance theorizing on ambitemporality by analyzing how the loose coupling of internal temporal structures may help organizations cope with temporal complexity.
... For example, Griffith and Harvey (2001) argue that organizational resources are of paramount importance in shaping firms' dynamic capabilities. Furthermore, Danneels (2011) holds the perspective that unnecessary resources promptly altered can serve as an important element in optimizing dynamic capabilities. Zahra et al. (2006) highlight the importance of organizational learning, which is the pivotal factor in identifying the difference in dynamic capabilities between new entrepreneurs and established businesses. ...
Purpose
The purpose of this study is to examine how family influence affects dynamic capabilities in family firms. This study also aims to analyze whether knowledge scope and knowledge newness serve as moderating factors in this relationship.
Design/methodology/approach
This study examines the dynamic capabilities of family businesses listed in both the Shanghai and Shenzhen Stock Exchanges from 2009 to 2022. This study identifies businesses belonging to family firms based on family influence. In total, the sample covers 2,934 Chinese family firms accounting for 20,324 firm-year observations. Besides, this study identifies family firms by manually searching for annual reports that reveal the kinship of directors and executives, and other financial variables are collected from the China Stock Market Accounting Research Database.
Findings
This study empirically reveals that family influence is negatively associated with dynamic capabilities. Moreover, the effect of family influence on dynamic capabilities is weakened with more knowledge scope and knowledge newness.
Originality/value
The findings contribute to two streams of literature. First, this study extends the theoretical framework of dynamic capabilities from the perspective of socioemotional wealth theory. This study recognizes that family influence is negatively associated with dynamic capabilities. The results offer novel empirical evidence to better understand the dynamic capabilities of family businesses and make it valuable to expand the theoretical framework of dynamic capabilities. Second, this study contributes to the literature in the field of knowledge management. The results provide new findings on the positive moderating role of knowledge management, shedding light on embracing knowledge scope and newness, especially in family businesses with higher level of family engagement.
... Therefore, architectural configurations entail processes of complementing rather than replacing. Whether, and to what extent, the introduction of novel architectures will pose a serious threat to incumbents will critically depend on how easily new and relevant resources can be developed (or acquired), to what extent existing, complementary assets will continue to be relevant, 28 and how easily both can become integrated (in this respect, see, among others, the work of Tripsas (2009), Tripsas and Gavetti (2000), Teece (1986), Van Looy et al. (2005), and Danneels (2007Danneels ( , 2011. A good example are companies that currently offer mobility services using digital platforms (e.g., Uber, Lyft, and Lime). ...
This paper addresses the conceptual ambiguity in the literature on exceptional innovations, labeled “radical,” “disruptive,” “breakthrough,” or “discontinuous.” A bibliometric analysis of 4407 articles shows that different labels are used by papers with shared theoretical foundations and thematic orientation. An in-depth analysis of 60 seminal contributions shows that definitions are (I) not always provided, (II) inconsistent within labels, and (III) not distinctive across labels. This complicates the exploration of the literature and the comparison of results. Definitions, when provided, agree on the existence of two underlying dimensions—novelty and impact—but disagree on how the labels relate to these dimensions. To advance conceptual clarity, we propose a typology of innovation trajectories that treats novelty and impact as distinct concepts and clarifies how and when novelty relates to impact.
... Therefore, architectural configurations entail processes of complementing rather than replacing. Whether, and to what extent, the introduction of novel architectures will pose a serious threat for incumbents will critically depend on how easily new and relevant resources can be developed (or acquired), to what extent existing, complementary assets will continue to be relevant 21 , and how easily both can become integrated (in this respect, see, a.o., the work of Tripsas (2009), Tripsas andGavetti (2000), Teece (1986), Van Looy, Martens, and Debackere (2005), and Danneels (2007Danneels ( , 2011. A good example are companies that currently offer mobility services using digital platforms (e.g., Uber, Lyft, Lime). ...
This paper addresses the conceptual ambiguity in the literature on exceptional innovations, labeled “radical,” “disruptive,” “breakthrough,” or “discontinuous.” A bibliometric analysis of 4407 articles shows that different labels are used by papers with shared theoretical foundations and thematic orientation. An in-depth analysis of 60 seminal contributions shows that definitions are (I) not always provided, (II) inconsistent within labels, and (III) not distinctive across labels. This complicates the exploration of the literature and the comparison of results. Definitions, when provided, agree on the existence of two underlying dimensions—novelty and impact—but disagree on how the labels relate to these dimensions. To advance conceptual clarity, we propose a typology of innovation trajectories that treats novelty and impact as distinct concepts and clarifies how and when novelty relates to impact.
... Micro-foundations (Felin et al. 2012;Teece 2007) complement the macro-level by focusing on the cognitive abilities of key individuals in the organization, mainly managers and top executives (Danneels 2011;Funke, Wilden, and Gudergan 2023;Helfat and Peteraf 2015). However, Nonaka, Hirose, and Takeda (2016) highlight that individuals alone, even at top positions, cannot perform all the sensing, seizing, and transforming. ...
With the rise of digitalization, retailing and services organizations are increasingly shifting towards omnichannel strategies, seeking to offer seamless service experiences across multiple channels. While extant research highlights that organizations adopting omnichannel strategies must undergo deep transformation, there is a dearth of research on omnichannel reconfiguration in franchising. However, omnichannel reconfiguration could be more complex in decentralized networks such as franchised ones, marked by franchisee autonomy and a subtle balance that ensures collaborative entrepreneurship while avoiding intra‐brand competition. This research addresses this gap by adopting a dynamic capabilities perspective and investigating the meso‐foundations of omnichannel reconfiguration. Seven case studies with French franchise networks reveal three classes of meso‐level reconfiguration capabilities, related to learning, change management, and governance capabilities. The case studies also uncover how the foundations and role of the three classes of capabilities vary in terms of how franchise networks sense omnichannel opportunities, seize them, and transform to leverage them.
... We integrate these empirical findings into a larger stream of research that has examined the performance effects of different activities related to resource reconfiguration and reorganization (for an overview see Karim & Capron, 2016) and has found these activities to be important drivers for firm profitability, growth, and innovation (e.g., Brickley & Van Drunen, 1990;Vidal & Mitchell, 2015;Helfat & Eisenhardt, 2004;Karim & Kaul, 2015). However, the literature presents mixed results regarding the performance implications of resource reconfigurations, with some studies indicating neutral or even (partially) detrimental performance effects (e.g., Barkema & Schijven, 2008;Danneels, 2011;Karim, 2009). The inconclusive findings of extant research regarding the performance implications of resource reconfigurations may lead us to believe that the mere act of reconfiguring resources does not automatically implicate superior outcomes, since not all changes to the resource base are necessarily valuable (Helfat & Martin, 2015). ...
... The mechanisms and conditions under which these relationships occur to achieve SCA have yet to be fully understood (Rikhardsson & Yigitbasioglu, 2018;Olabode et al., 2022). A firm's DC are its ability "to renew itself in the face of a changing environment by changing its set of resources" (Danneels, 2011). Thus, including SMA and BA in this study contributes to our understanding of the effect of BA and SMA on DC and SCA in contemporary business environments. ...
This paper investigates the effect of Strategic Management Accounting (SMA) and Business Analytics (BA) on Sustainable Competitive Advantage (SCA). Moreover, it examines the mediating effect of Dynamic Capabilities (DY) and the moderating effect of Competition Intensity (CI) on direct relationships. The study used the survey method to collect data from listed companies in the Amman Stock Exchange, and the hypotheses were tested using Partial-Least Squares-Structural Equation Modelling. Based on the findings, DC mediates the relationship between SMA and SCA as well as BA and SCA. CI moderate only the relationships between SMA and SCA. The study findings can be used as directions by management, policymakers and researchers to comprehend the positive influence of SMA, BA and DC on SCA.
... Through equitable employment practices, integration of differences, and inclusion in decision making, organizations can capitalize on unique perspectives, insights, and network connections of different employees for collective sensemaking, which facilitates organizational learning and adaptation. In addition, to act promptly during crises, organizations need to alter their resource base by leveraging existing resources, creating new resources, accessing external resources, and releasing resources (Danneels 2011). Involving employees in important organizational processes through inclusion management practices (e.g., inclusion in decision making and integration of differences) facilitates this resource alteration process by reducing groupthink and mental shortcuts, eliciting decentralized exploration activities, and facilitating collective problem solving (Brinckmann et al. 2019;Dobrajska et al. 2015;Nishii 2013;Siggelkow and Levinthal 2003). ...
Organizations inevitably face various forms of disruptive events (e.g., external crises), and sustaining long‐term prosperity requires them to stay resilient when encountering unexpected adversity. Prior crisis management research predominantly relied on qualitative case studies to examine efforts after a crisis had occurred, treating the crisis as a “given” rather than a variable. The exceptionality of crisis situations and the ad hoc nature of crisis countermeasures largely limit current knowledge about how organizations may manage employees to remain in a preparative stance for disruptive events. Integrating the inclusion literature, crisis management research, and event system theory, we propose inclusion management practices as a viable pathway for organizations to develop resilience resources and capabilities prior to a crisis, allowing them to exhibit greater robustness and agility when a crisis arises. Such robustness and agility, in turn, enhance organizational performance thereafter. We further pinpoint the strength of a crisis event as an important contingency shaping the effects of pre‐crisis inclusion management practices on organizations’ resilient responses and thereby performance. We tested our hypotheses in the context of the COVID‐19 pandemic crisis using longitudinal manager‐report survey data (N = 884 workplaces). We found that workplaces that implemented more inclusion management practices before COVID‐19 were more robust and agile in response to the pandemic crisis. Agility (but not robustness), in turn, was positively related to organizational performance. In addition, the effect of inclusion management practices on agility was stronger for workplaces with greater COVID‐19 event strength.
... Los investigadores suponen que la capacidad de manejar con éxito tales diferencias tiene un impacto positivo en el desempeño y la supervivencia de la empresa (Danneels, 2010;Gibson y Birkinshaw, 2004;He y Wong, 2004;Hsu, Lien y Chen, 2013). De tal manera que, la capacidad de implementar innovaciones exploratorias y de explotación simultáneamente permite a las empresas enfrentar los desafíos de sus entornos y mercados. ...
Investigaciones previas definen los beneficios, mecanismos y procesos que una organización ambidiestra posee. Esta investigación busca identificar y analizar qué elementos del comportamiento organizacional hacen posible que la ambidestreza organizacional, se desarrolle en una empresa. En los últimos treinta años, muchos estudios cuantitativos y cualitativos han explorado una gran variedad de aspectos de la ambidestreza organizacional, mostrando que la ambidestreza aumenta el desempeño de la empresa, especialmente cuando las empresas están experimentando incertidumbre ambiental, de ahí la importancia que esta sea adoptada por las empresas que buscan sobrevivir y prosperar en entornos económicos competitivos. Ser verdaderamente ambidiestro en la práctica permite un desarrollo continuo y exitoso, pero lograrlo es difícil e inevitablemente conduce a varias tensiones y paradojas en diferentes niveles organizacionales.
... These activities involved utilizing existing resources, creating new ones, obtaining external resources, and converting these into monetary value. The impact mechanism in question was subsequently delineated by Danneels (2011) through the utilization of a longitudinal case study. Lin et al. (2016) found four common components from multiple interpretations, including 1) perceptual capacity, 2) absorptive ability, 3) relational ability, and 4) integrative ability. ...
Competitiveness and digitalization are important topics for businesses, as in the rapidly changing environment, they determine the ability to survive and thrive. This study examines the impact of information technology (IT) investments on firms’ competitiveness. The study adopts the dynamic capability approach to examine how IT investments enable firms to adapt to digital transformation and generate value. This study employs causal econometrics methods to test the hypothesis that supplementary IT investments enhance the growth, efficiency, and capital accumulation of firms, which are key indicators of ex-ante competitiveness. The hypotheses are tested on a dataset of 65536 Hungarian firms from 1999 to 2014. Empirical evidence was found to support these hypotheses and confirm the positive relationship between IT investments and firm-level growth, efficiency, and capital accumulation. The findings indicate that a small IT investment does not improve efficiency, while an excessive investment is likely to include irrational investments as well.
... Based on the definition of the Global Entrepreneurship Monitor (Bosma et al., 2020), the new ventures in this study are not more than 42 months old. Higher-order capabilities in young and smaller entrepreneurial firms differ from higherorder capabilities developed in large and established firms for a number of reasons (Danneels, 2011;Winter, 2003). First, new ventures lack prior experience, and these firms are often forced to improvise in order to create or generate solutions (Delmar & Shane, 2003). ...
Article type: Research Article Resource limitation has always been an issue discussed in different fields of science. By using dynamic capabilities, companies can respond to environmental fluctuations despite their limited resources. This study aims to understand the development of dynamic capabilities in new ventures. The methodology is a qualitative multiple-case study analysis. It draws on in-depth interviews with 15 new ventures in the field of IT selected using purposive sampling. The results identified four critical factors for the development of dynamic capabilities in new ventures, which are the antecedents of dynamic capability development: characteristics of the management team, resources, and capabilities of the firm, strategic orientations, and the environment. These improve the performance of the firm through radicalness. The results provide valuable insights for managers and researchers on creating and developing dynamic capabilities in new ventures.
... If one part of the business offers things which people don't want, or the product gets old, the other parts are still bringing money in. Being flexible just means you are quick to adjust to changes when your customers want something new or when the market changes (Danneels, 2010). ...
Entrepreneurship is a fundamental part of growth and development opportunities for all countries. No matter how wealthy a country is materially, it cannot develop if its resources are not used productively. To this end, vibrant entrepreneurs who can make a significant contribution to the prosperity of the country are required. The only way out is to encourage and grow entrepreneurship, since it tries to turn a person into a job supplier rather than a job seeker. The COVID-19 pandemic has had a significant impact on the economic activity of several nations, regardless of their position. Economists have classified these effects as recessions and depressions. Regardless of the business, COVID-19 has impacted a lot of entrepreneurs, but some have been more severely impacted than others. The primary difficulties faced by business owners in the hospitality industry are examined in this essay. A cash flow deficit, a lack of raw materials, a labor scarcity, a decline in demand, the possibility of a contract breach, and logistical obstacles are the primary issues that entrepreneurs deal with in the hospitality sector. In conclusion, the effects on small and medium-sized businesses in the hospitality industry are highlighted, along with the theoretical and practical implications. Primary sources with a set of questionnaire was used to gather data from the industry. Entrepreneurs in the hospitality sector are the chosen study group. After collection, the data were tabulated and then interpreted.
... Following an established research tradition for studying how firms respond to technological and market changes (Cattani et al., 2017;Chai, 2017;Danneels, 2011;David et al., 2013;Hargadon & Douglas, 2001), we adopted a historical approach to examine how the interplay between firm-level inventive efforts and contextual factors shaped the process of resource reallocation. This method is well-suited to analyzing rare events that, like the introduction of systemic innovations (Helfat & Campo-Rembado, 2016), usually display complex dynamics and 5 By analogy, the functional modules of a technological artifact correspond to what evolutionary biologists call "a discrete entity whose function is separable from those of other modules" (Hartwell et al., 1999, C47-C48). ...
Research Summary
Despite the importance of resource reallocation in shaping a variety of strategic outcomes, strategy scholars have paid only limited attention to the processes by which firms reallocate their resources across successive systemic innovations . To explore these processes, we conducted an in‐depth historical case study on Rolls‐Royce 's role in three distinct systemic innovations that marked the transition from piston engines to jet engines in the civil aviation industry: the turbojet, the turboprop, and the turbofan. The analysis helps explain how and why Rolls‐Royce's central role stemmed from its ability to reallocate existing non‐scale free organizational and technical resources. A key finding of this study is the identification of the horizontal transfer of functional modules as a critical process, especially during the incipient phase of a systemic innovation. The analysis also highlights the role that specific organizational arrangements, particularly a firm's integrative capabilities , have in shaping the effectiveness with which resources are reallocated.
Managerial Summary
Focusing on resource reallocation is important to understand why some firms effectively reallocate their resources through successive systemic innovations while others cannot, even if they have similar resources and face the same environmental conditions. By delving into the technological aspects of aeroengine development and exploring why Rolls‐Royce had the capabilities to successfully integrate key functional modules across various modular levels, we clarify the relationship between technology and organization that underlies resource reallocation—a topic that has received only scant attention in the strategy literature.
... Experience in a specific context may help a firm to orchestrate resources better; however, it may create problems when the new resources are not aligned with the established mental model which was built on past experience (Danneels, 2010). A manager's dominant logic refers to a firm's logic as created by the firm's founders, therefore the development of the firm's cognitive capability (represented by its managers) can be considered as a set of processes. ...
The increasing importance of capability that drives business model change has triggered many firms to revisit the way they manage their resources. Cognitive levels of firm’s manager have been acknowledged as the basis of capability building for business model change, however the benefit of utilizing firm’s knowledge management effectively for improving cognitive capability is not yet explored especially when the business is knowledge-intensive. This research focuses on literature review of knowledge management, cognitive aspect, resource orchestration, and business model change. Furthermore, with the context of Indonesian oil and gas industry, this research investigates the role of knowledge management to resource orchestration which in turn affects capability to change business model. This research demonstrates the effect is fully mediated by cognitive capability. Finally, this research suggested firms shall develop systematic knowledge management and using manager’s cognitive effectively to orchestrate their resource and be ready to change their business model.
... An organization will have dynamic capabilities throughout its structure, encouraging the most efficient use of its resources and helping facilitate high-quality performance. This is the base of dynamic capability theory (Danneels, 2011). The dynamic capacity theory describes the impact of environmentally friendly resource facilities on organizational behavior and how environmental uncertainty can be reduced (Jiang et al., 2018). ...
Considering climate change challenges, firms face increasing pressure to adopt eco-friendly practices to revive the natural climate. This empirical research uses the green servant leadership phenomenon by combining eco-friendly, socially responsible initiatives with sustainable innovation. Green dynamic capabilities are taken as a moderator between green servant leadership and green innovative performance. The data was collected from 375 workers in the manufacturing industry in Pakistan. Using descriptive and inferential statistics through SPSS and SMART PLS 4, we examined how green servant leadership might improve eco-sustainability and the firm’s societal accountability. It is identified that social responsibility initiatives backed by green initiatives positively impact innovative green performance. Moreover, green dynamic capabilities strengthen the link between Environment-focused CSR and green servant leadership. The findings highlighted the need for GDC regulation between environment-focused CSR, green Servant leadership, and green creative performance.
... Results of research by Hsu & Sabherwal (2012) show that dynamic capabilities have a positive effect on innovation. Danneels (2010) analyzed how a company's inability to change its resource base prevents it from offering competitive and viable new products. Makkonen et al. (2014) found a statistically significant indirect effect between dynamic capabilities and product innovation performance. ...
This study aims to investigate the relationship between the dimensions of knowledge-based dynamic capabilities in innovation performance, operationalized by organizational innovation measures, in organic food production units. The research was carried out using a seven-point Likert questionnaire that measures the relationship between dynamic knowledge-based capabilities (Zheng et al., 2011) and organizational innovation (Camisón & Villar-López, 2010) in a sample of 154 organic food production units collected at ecological fairs in the metropolitan region of Porto Alegre, state of Rio Grande do Sul, Brazil. For data analysis, structural equation modeling was used. The results indicated that knowledge acquisition, generation and combination skills are important positive determinants for organizational innovation. The approach is groundbreaking in the literature as it addresses and broadens knowledge about the process of building knowledge resources and organizational innovation and adds an analysis model for studies in the interdisciplinary field of dynamic capabilities based on resource knowledge and organizational innovations. It contributes to the theory by reporting on empirical quantitative data through a measurement scale adapted and validated based on the proposal of Zheng et al. (2011).
Purpose
This paper aims to investigate how competition intensity and global institutional diversity influence the decisions of multinational enterprises (MNEs) to invest in dynamic green capabilities (DGCs) for green transformation. It aims to understand why some MNEs systematically embrace green transformation through DGCs while others resist, focusing on the role of these two factors.
Design/methodology/approach
This study takes a conceptual approach, conducting a critical analysis of existing literature to explore the effect of competition intensity and global institutional diversity on MNEs’ investments in DGCs.
Findings
The paper proposes that competition intensity and global institutional diversity magnify the economic benefits of deploying DGCs. MNEs that navigate decision-making challenges – such as myopia, heightened perceived risks and loss aversion – are better positioned to invest in DGCs.
Originality/value
The novelty of this paper lies in its comprehensive approach. While prior research has explored aspects of DGCs, stakeholder pressures and MNE green transformation, the influence of global stakeholders on MNEs’ investments in DGCs remains underexplored. Previous studies have either examined DGCs in isolation or focused on stakeholder roles in environmental strategies without linking them to DGCs and MNEs. This study addresses this gap by investigating how global stakeholders drive MNEs’ decision-making on DGC investments, emphasizing two key factors: competition intensity and global institutional diversity.
This study reveals how incumbent actors leverage physical place as a source of differentiation in response to the threat of digital commoditization. Through a longitudinal, qualitative analysis of the U.S. independent bookselling industry from 1995 to 2019, we outline how dispersed organizational actors responded to the rise of Amazon.com, an online retailer that threatened to displace brick-and-mortar retail. While many analysts predicted that Amazon’s emergence would incite a retail apocalypse, independent bookstores proved to be far more resilient than expected. We identify organizational emplacement—a process by which actors infuse meaning into physical spaces , thereby transforming them into valuable places —as a novel mechanism of value creation. Several practices are associated with this mechanism, including architecting the physical environment, anchoring to the local community, and sanctifying the meaning of place. This study offers a counterbalance to narratives of digital displacement and shows how physical place can be converted from a liability into an asset in the digital era.
We contribute to the dynamic capabilities perspective by proposing a conceptual model that explains how strategic orientation and environmental sensing co-evolve in a recursive process of establishing and reestablishing strategic fit. Organizations engage in environmental sensing to identify sources of environmental change and, if required to respond, make decisions that align with their strategic orientation. We introduce the concept of strategic-orientation adjustment, linked to the receding and resurfacing of an organization’s founding imprint, to explain how organizations respond to environmental pressures and adapt their strategic orientation. Our model offers novel insight into the dynamics underpinning the interplay between environmental sensing and the evolution of strategic orientation. Building on the literatures on organizational history and the microfoundations of dynamic capabilities, our paper offers an alternative perspective to the configurational view of dynamic capabilities, strategic orientation, and strategic fit. We illustrate our theory using the cases of pioneering electric guitar-making companies Gibson and Fender.
Research Summary
Framing is critical for leaders who must build support for strategic renewal. While research has concentrated on renewal that replaces one set of capabilities with another, we explore a distinctive challenge: how leaders persuade stakeholders to endorse the reprioritization of resources toward a capability set that must coexist with an existing one. Moreover, while research has focused on how leaders build employee support for renewal, we examine how to persuade those overseeing resource allocation. Our study analyzes Director Robert Mueller's 12‐year effort at the FBI—after the 9/11 terrorist attacks—to build up counterterrorism capabilities while maintaining existing law enforcement capabilities. We offer a novel distinction between outcome frames and process frames and discuss how each frame, sequenced properly, is relevant to strategic renewal.
Managerial Summary
This study examines how leaders can build support for strategic renewal when an organization must develop new capabilities while maintaining existing ones. We analyze how FBI Director Robert Mueller, in the wake of 9/11, used strategic communication—or framing—to persuade members of Congress overseeing the FBI's budget to support the development of new counterterrorism capabilities alongside its traditional law enforcement mandate. We highlight two types of frames: outcome frames (focused on what the organization seeks to achieve) and process frames (emphasizing how the organization operates). Our findings reveal that sequencing these types of frames is essential. By using outcome frames to address immediate concerns and shifting to process frames to resolve longer‐term tensions, leaders can build stakeholder support for complex resource reprioritization efforts.
Every organization strives to achieve the best market position, attain a competitive edge, maintain high performance and end up being a market leader. However many firms start on the right foot but as the time progress some fall or fail to achieve the same. This study looked at the role of initial condition in attaining competitive advantage as well as the overall performance. The research was a census of the commercial banks sector and the findings revealed that the initial conditions do not influence the performance though contributes gaining competitive advantage. The study looked at the moderating role of dynamic capabilities on the relationship between initial conditions and performance. The findings show initial conditions effect on performance diminishes with time. However dynamic capabilities are found to play moderating role in the relationship between initial conditions and performance of commercial banks in Kenya. The study recommends that all banks staff be educated on the various categories of dynamic capabilities to enable the utilize them to improve their performance and well as gaining competitive advantage.Keywords: Performance, Initial Conditions, Dynamic Capabilities
In today’s rapidly changing and complex business environment, firms of almost all sizes are facing increasing challenges adapting to new market conditions and consumer demands. Through the answer to the research question, this study explores how managers implement and cope with strategic change when faced with an unexpected crisis in an emerging market. The study specifically evaluates how managers of three small and medium-sized firms adapt to strategic change in India, characterized by diverse cultures and practices. This study contributes to strategic change and management literature. Moreover, there has been a significant rise in firms in emerging markets, where most existing scholars have focused on how strategic changes are useful for survival factors in the firms. This study adopts a qualitative research approach using multiple case studies, focuses on three Indian firms that recently underwent a reversal of strategic change and encountered challenges in the process. The study emphasizes the need to pay attention to techniques employed by managers for maintaining the firm in a competitive situation. This dissertation develops a detailed understanding of how and when the method can be used as a substitute approach for business survival in uncertain times (such as the recent COVID-19 pandemic). The theoretical framework of the dissertation explains the challenges and importance of employing change reversal when a firm is in a complex situation. This dissertation thus discovers that some employees reframe the meaning of reversal of strategic change as an old style and that leads to negative implications. As a result, this dissertation concludes by discussing the managerial challenges for interpreting change and practical implications for responding to reversal of strategic change efforts in the firms. The results of this research further highlight the importance of the relationship between managers and employees for decision-making as a unity rather than an individual’s responsibility for the change.
Organizational performance might indirectly be impacted by the variable of purpose-driven organization (PDO). Mourkogiannis (2014) defines organisational purposes as a set of values and beliefs that defines the organisation, the purpose inspires and motivates the organisation's employees, too. This purpose also becomes a reason for doing or creating things. Muhammadiyah hospitals have determined their purpose as inclusive health services and it is strongly reflected in the message of Muhammadiyah founding father, KH Ahmad Dahlan. When inaugurating the PKO Muhammadiyah Clinic in Yogyakarta in 1923, he said that: "the purpose of PKO is to help everyone in sorrows by using the principles of Islam, not by dividing the nation and religion" (Thohari, 2021). Purpose-orientation means having purposes or concrete objectives for the benefit of all communities by providing wider services, which is beyond its financial performances (Henderson, 2019). This study has the objectives to confirm a few previous study results on Organizational Performance (OP) and the organisation's change capability (OCC) as the mediating variable. This study employs quantitative data analysis using Structural Equation Model (SEM). This study addresses three hypotheses. Hypothesis 1 of the study is proved that improving PDO will lead to an improvement in OCC by 0.945. Hypothesis 2 of the study has confirmed that improvement in OCC improves OP by 0.795. Hypothesis 2 of the study proves that OCC has a positive impact on OP. Meanwhile, hypothesis 3 is proved that there is a structural relationship between PDO and OP in a form of indirect impact to OCC as mediating variable. This study differs from previous studies as the study: 1) determines the objects are Muhammadiyah Hospitals which applies the social entrepreneurship organisation (SEO) ownership model and OCC; 2) the study period is set during the COVID-19 pandemic which significantly impacts the healthcare industry.
This article is based on the study of an engineering organization that is experiencing major difficulties on its first new project in 10 years. It contributes to the literature on organizational forgetting in project-based organizations, examining how this phenomenon can be perceived and assessed. The analysis of the data provides a better understanding of the conditions under which a situation of accidental forgetting can be (mis)identified. The case reveals that, due to five sources of ambiguity linked to the identification process—latency, novelty, multiplicity, complexity, and credibility—the forgetting phenomenon may be underestimated or the subject of contradictory assessments within the organization.
Bu çalışma, Wilden, Gudergan, Nielsen, & Lings (2013) tarafından geliştirilen Dinamik Yetenekler Ölçeği’ nin, Türkçeye uyarlanması kapsamında, güvenilirlik ve geçerlilik değerleri ile ilgili bulguları içermektedir. Çalışma, iki farklı örneklemden (n1=174, n2=227) alınan verilerle yürütülmüştür. Ölçeğin Algılama, Ele Geçirme ve Yeniden Yapılandırma alt boyutlarından oluşan orijinal üç faktörlü yapılanmasının Türkçe uyarlamasında yapılan analizler sonucunda, iki faktörlü bir yapı gösterdiği belirlenmiştir. Bu iki boyut “Algılama Ele Geçirme” ve “Yeniden Yapılandırma” olarak adlandırılmıştır. Orijinal ölçekte bulunan 8. Madde binişik madde olduğu için ölçekten çıkarılmıştır. Ölçeğin Güvenilirlik analizleri sonucunda Dinamik Yetenekler ölçeğinin tümü için Cronbach Alfa katsayısı ,90; “Algılama Ele Geçirme” alt boyutu için ,87 ve “Yeniden Yapılandırma” alt boyutu için ,83 olarak hesaplanmıştır. AVE değeri 0,66 ve CR değeri 0,84 olarak tespit edilmiştir. Elde edilen sonuçlar, uyarlaması yapılan ölçeğin, Türkiye’deki iş yaşamı için dinamik yeteneklerin ölçülmesinde geçerli ve güvenilir olarak kullanılabilecek bir ölçüm aracı olduğunu ifade etmektedir.
The business landscape is changing in a fast way. This change necessitates gaining a competitive advantage in order to continuously innovate. One way to sustain the key advantages of successful new product development is to use collaboratively or independently the resource-based view (RBV) and the dynamic capabilities-based theory (DCBT). Both frameworks will be examined in the following literature. The introduction will highlight the objectives of the review. Adding to that, it will examine the significant role that NPD plays in organizational prosperity. Moreover, after identifying each concept and framework, a specific section will be responsible for identifying possible synergies between RBV and DCBT. Finally, the last part will include suggestions for more research made in the review's conclusion. Adding to the suggestions and in line with the further exploration within RBV and DCBT in NPD, potential avenues for gathering the two frameworks may be included in these recommendations.
This paper explores the use of dynamic capabilities in evolving strategic factor markets (SFMs), with an emphasis on the role of resource rarity. We investigate how the three dimensions of dynamic capabilities—sensing, seizing, and reconfiguring—interact with resource rarity to influence the economic value of resource acquisition. Our framework introduces the concept of a “resource rarity lifecycle,” which tracks the trajectory of resources within SFMs, shaped by the pace of change in market conditions. In slow‐paced SFMs, rare resources remain rare for longer, justifying investments in sensing and seizing capabilities. In contrast, in fast‐paced SFMs, rare resources quickly become common, making investments in reconfiguring capabilities more economically viable. We conclude with a discussion of theoretical implications and suggest potential avenues for future research.
The article presents the main stages of concept development in strategic management, emphasizing the importance of structuring the strategic decision-making process through a strategic management model. From combining strategic management approaches as a model and plan, the companies’ focus on capitalizing on their own resources or mastering environmental influence, to globalization, digitalization, innovation and the pursuit of sustainable competitive advantage, all are essential to understanding paradigm shifts in strategic management. Against the inevitable background of technological and digital transformations, the trends identified in the modeling of strategic management processes, in the context of new challenges, are transposed into an innovative strategic management model, a conceptual model proposed for research and development.
A dinamikus képességek irodalma az üzleti tudományok egyik kiemelkedő jelentőségű kutatási területének tekinthető. E képességek támogatják a szervezeteket abban, hogy stratégiai szintű változásokat tudjanak eszközölni, amelyekkel képessé válnak arra, hogy reagáljanak a környezeti kihívásokra. Bár a terület irodalma széleskörű, a képesség kialakítása még kevesebb figyelmet kapott. Mind a dinamikus képességek, mind azok kialakulása útfüggő, abban számos egyedi jellemző figyelhető meg, ugyanakkor azokban hasonlóságok azonosíthatóak. A dinamikus képességek kialakulása szervezetektől függetlenül három fő szakaszban valósul meg. Az első szakasz az egyéni szint, a megalakulás időszaka, amikor összeállnak azok az egyének, amelyek a kialakítást végezni fogják. A második az emberközi, interakciós szakasz, ahol a képességet létrehozó egyének egymással interakcióba állnak. A harmadik és utolsó szakasz az érettség szakasza; ekkorra már nem csak egyéni és egyénközi, de szervezeti szinten is értelmezhető dinamikus képességet tudott az adott szervezet előállítani.
People tend to hold overly favorable views of their abilities in many social and intellectual domains. The authors suggest that this overestimation occurs, in part, because people who are unskilled in these domains suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it. Across 4 studies, the authors found that participants scoring in the bottom quartile on tests of humor, grammar, and logic grossly overestimated their test performance and ability. Although their test scores put them in the 12th percentile, they estimated themselves to be in the 62nd. Several analyses linked this miscalibration to deficits in metacognitive skill, or the capacity to distinguish accuracy from error. Paradoxically, improving the skills of participants, and thus increasing their metacognitive competence, helped them recognize the limitations of their abilities.
Strategy has been defined as “the match an ovganization makes between its internal resources and skills … and the opportunities and risks created by its external environment.” 1 During the 1980s, the principal developments in strategy analysis focussed upon the link between strategy and the external environment. Prominent examples of this focus are Michael Porter's analysis of industry structure and competitive positioning and the empirical studies undertaken by the PIMS project. 2 By contrast, the link between strategy and the firm's resources and skills has suffered comparative neglect. Most research into the strategic implications of the firm's internal environment has been concerned with issues of strategy implementation and analysis of the organizational processes through which strategies emerge. 3
We challenge the premise that the CEO's job is to keep the corporation alive and thriving at all costs and under all circumstances. We briefly review the differing normative views of strategic management theorists and organizational theorists about organizational inertia. We then develop an economic model of incumbent behavior in the face of challenger competition that accommodates complementary assets. The model predicts and describes conditions under which organizational inertia, as subsequent organizational failure, is optimal. We then extend the logic and propose that the failure of entrepreneurial firms does not necessarily imply the failure of entrepreneurs. We conclude with a call to study "exit" as a viable strategic option.
Strategic renewal consists of three subprocesses (competence definition deployment, and modification). Within each subprocess. the roles of top-, middle- and operating-level managers differ in their time horizon, information requirements, and core values. Dissensus in managers' perceptions about the need for change creates strategic role conflicts within individual managers and between managerial roles. In this article we explain when and where strategic role conflict occurs and how organizational controls may be used to alleviate it.
Constructs an analytical framework for a resource-based approach to strategy formulation. There are five stages in this framework: analyze resources, appraise capabilities, analyze competitive advantage, select strategy, and identify resource gaps. The concepts of this framework are illustrated by reference to existing U.S. firms such as IBM, Xerox, Harley-Davidson, and 3M. This framework uses resources and capabilities as the foundation for a firm's long-term strategy because they provide direction for firm strategy and serve as the primary source of firm profit. Resources are defined as the inputs into the production process and include items of capital equipment and skills of individual employees. Capabilities are defined as the capacity for a team of resources to perform some task or activity. When analyzing the competitive advantage of a firm, durability, transparency, transferability, and replicability are considered important factors. To be successful, firms must develop strategies which utilize their unique characteristics. (SRD)
As a potential theory, the elemental resource-based view (RBV) is not currently a theoretical structure. Moreover, RBV proponents have assumed stability in product markets and eschewed determining resources' values. As a perspective for strategic management, imprecise definitions hinder prescription and static approaches relegate causality to a "black box." We outline conceptual challenges for improving this situation, including rigorously formalizing the RBV, answering the causal "how" questions, incorporating the temporal component, and integrating the RBV with demand heterogeneity models.
In 1980, the conglomerate firm, a firm composed of several unrelated businesses, was perhaps the dominant corporate form in the US. Yet, by 1990 this form had in effect become deinstitutionalized. Using comprehensive time-series data from the 1980s on a population of the largest industrial firms in the US, it is demonstrated that this deinstitutionalization was effected by two processes: First, diversified firms were taken over at a high rate and their unwanted parts were typically sold off, and second, the less diversified firms that survived shunned the strategy of conglomerate growth. The aggregate result was that by 1990 the largest industrial firms in the US became considerably less diversified. It is argued that an unintended consequence of the successful spread of the conglomerate form was to replace the conceptualization of the corporation as a sovereign actor with a reductionist view of the firm as a network without boundaries or a nexus-of-contracts among separate individuals. The implications of this conceptualization for organization theory are discussed. -from Authors
It is common for brands to extend into additional product categories. The most successful extensions involve brands that are associated with benefits that are valued in the extension category. We propose that brand extension success also depends on the accessibility of these benefit associations and that accessibility, in turn, depends on the amount of interference by competing brand associations ( e. g., category associations). One implication of this proposition is that broad brands (i.e., brands offering a portfolio of diverse products) will tend to have more accessible benefit associations than narrow brands (i.e., brands offering a portfolio of similar products) and can therefore engage in more successful brand extensions than narrow brands, even when the narrow brands are more similar to the extension category. However, when benefit associations are equally accessible and diagnostic, the evaluation of brand extensions will instead be dictated by the similarity between brand and extension category associations.
This research examines data collected as part of a 10-year case study of the creation and evolution of organizational control during organizational founding. Past research has taken a cross-sectional approach to examining control use in mature, stable organizations. In contrast, this study examines organizational controls during the founding period and takes a longitudinal perspective on organizational control. By examining how organizational controls are created and evolve through specific phases of the founding period, the research also provides new data and insights about what drives shifts in the use of various types of control. Specifically, this research sheds light on the role of imbalance among formal and informal controls as the key driver of shifts in control configurations, and provides a step toward making organizational control theory more dynamic.
This paper focuses on dynamic capabilities and, more generally, the resource‐based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high‐velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well‐known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high‐velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long‐term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high‐velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.
A laboratory experiment examines factors affecting evaluations of proposed extensions from a core brand that has or has not already been extended into other product categories. Specifically, the perceived quality of the core brand and the number, success, and similarity of intervening brand extensions, by influencing perceptions of company credibility and product fit, are hypothesized to affect evaluations of proposed new extensions, as well as evaluations of the core brand itself. The findings indicate that evaluations of a proposed extension when there were intervening extensions differed from evaluations when there were no intervening extensions only when there was a significant disparity between the perceived quality of the intervening extension (as judged by its success or failure) and the perceived quality of the core brand. A successful intervening extension increased evaluations of a proposed extension only for an average quality core brand; an unsuccessful intervening extension decreased evaluations of a proposed extension only for a high quality core brand. Though a successful intervening extension also increased evaluations of an average quality core brand, an unsuccessful intervening extension did not decrease core brand evaluations regardless of the quality level of the core brand. The relative similarity of intervening extensions had little differential impact, but multiple intervening extensions had some different effects than a single intervening extension.
As the conception of what marketing is has evolved, so must the methods of inquiry also evolve. Marketing now is viewed as a socially constructed enterprise. Thus, what is needed are inputs from the humanistic modes of inquiry developed specifically to address socially constructed phenomena. The author discusses three central aspects of humanistic inquiry, (1) the philosophy and metaphysic of humanism, (2) the methodology of humanistic research, and (3) the criteria appropriate for evaluating studies conducted in the humanistic mode. Humanistic inquiry is compared specifically with the positivist approach currently used by most marketing researchers. Guidelines are provided to assist researchers who may wish to implement the humanistic approach in their own research programs.
Two studies were conducted to obtain insights on how consumers form attitudes toward brand extensions, (i.e., use of an established brand name to enter a new product category). In one study, reactions to 20 brand extension concepts involving six well-known brand names were examined. Attitude toward the extension was higher when (1) there was both a perception of “fit” between the two product classes along one of three dimensions and a perception of high quality for the original brand or (2) the extension was not regarded as too easy to make. A second study examined the effectiveness of different positioning strategies for extensions. The experimental findings show that potentially negative associations can be neutralized more effectively by elaborating on the attributes of the brand extension than by reminding consumers of the positive associations with the original brand.
The traditional product life cycle framework has little to say about the competitive processes that accompany the evolution of a market. The first part of the article identifies the major shortcomings of the product life cycle. This analysis is used to establish the requirements for a more comprehensive model that incorporates both demand- and supply-side factors. The second part shows how concepts from population ecology theory can be adapted to satisfy these requirements. With this dynamic theory, specific propositions can be made about changes in competitive structure and performance as the market evolves.
Each of the articles in this special section makes a distinctive contribution to the long-standing controversy over the managerial value of the product life cycle concept. This overview is designed to put these articles into a broader perspective by analyzing the major issues of identification, forecasting, and strategy formulation encountered in any meaningful application of the product life cycle.
This article extends the scope of investigations into the potential risks of brand and line extension strategies. Here, the authors examine whether extensions can dilute beliefs associated with a strategically important and highly visible product—the flagship product. The results of three experimental investigations indicate that beliefs about flagship products are less vulnerable to dilution than beliefs about the parent brand name in general. The findings suggest that assessments of the impact of brand leveraging strategies should include analysis of the effects on individual products as well as on the family brand name.
The field of strategic management, like other social science disciplines, is organized around a central research question. That question is: "Why do some firms persistently outperform others?" This question does not presume that there will always be persistent performance differences between firms. Rather, it presumes only that it may be the case that, in some situations, persistent performance differences will exist between firms, and that those differences cannot be explained by traditional economic theories of firm performance. These traditional economic theories suggest, in general, that performance differences between firms should be unusual, will almost certainly not be persistent, and if they exist, are most likely a manifestation of anti-competitive collusive or monopolistic actions on the part of firms.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.
- This paper describes the process of inducting theory using case studies from specifying the research questions to reaching closure. Some features of the process, such as problem definition and construct validation, are similar to hypothesis-testing research. Others, such as within-case analysis and replication logic, are unique to the inductive, case-oriented process. Overall, the process described here is highly iterative and tightly linked to data. This research approach is especially appropriate in new topic areas. The resultant theory is often novel, testable, and empirically valid. Finally, framebreaking insights, the tests of good theory (e.g., parsimony, logical coherence), and convincing grounding in the evidence are the key criteria for evaluating this type of research.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed 'best practice'). This suggests that they are more homogeneous, fungible, equifinal and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of REV, we conclude that traditional REV misidentifies the locus of long-term competitive advantage in dynamic markers, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright (C) 2000 John Wiley & Sons, Ltd.
The experiences of Casio, Southwest Airlines, Caterpillar, Canon, Honda, Wal-Mart and others have propelled the resource-based view of the firm to center stage in the arena of general management. These leading companies have gained a sustained competitive advantage by developing and leveraging unique resources and capabilities. Ii would be difficult today to conceive of a planning effort that did not consider an organization's core competencies and capabilities. But despite the compelling logic to base future decisions regarding products and markets on these attributes, few guidelines exist to help managers define their competencies and capabilities. This paper describes the experiences of three management teams, each seeking a shared understanding of the core capabilities at their disposal. The outcomes of their deliberations, the strategic issues informed by such an understanding, and the pitfalls experienced provide guidelines for other teams as they approach similar planning tasks.
Several researchers have advocated historical or longitudinal approaches to study marketing phenomena. Although some have applied this approach, more often it has been overlooked or denigrated. The author argues that historical method is capable of producing scientific knowledge that is currently useful, rather than simply a remembrance of the past. The author presents a complete description of the historical method, so researchers can use this article as a guide when applying this method. The value of the method is illustrated by examining the prevailing finding in the marketing literature that market shares are stable over time. Although this finding is considered an empirical generalization, an analysis of more than 650 brands in 100 categories raises doubts about the longevity of market share stability.
Business strategy is a complex subject and is usefully examined from several perspectives. This paper applies the lenses of governance and competence to the study of strategy. Both the governance and the competence perspectives have had the benefit of distinguished antecedents. They have also had to deal with tautological reputations. I begin with the governance perspective, with emphasis on the six key moves through which it has been operationalized. I then examine the competence perspective in these same six respects. Governance challenges the competence perspective to apply itself more assiduously to operationalization, including the need to choose and give definition to one or more units of analysis (of which the 'routine' is a promising candidate). The research challenges posed by competence to which governance can and should respond include dynamic transaction costs, learning, and the need to push beyond generic governance to address strategy issues faced by particular firms (with their distinctive strengths and disabilities). A lively research future for these two perspectives, individually and in combination, is projected.
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Here I examine each of the major issues raised by Priem and Butler (this issue) about my 1991 article and subsequent resource-based research. While it turns out that Priem and Butler's direct criticisms of the 1991 article are unfounded, they do remind resource-based researchers of some important requirements of this kind of research. I also discuss some important issues not raised by Priem and Butler - the resolutions of which will be necessary if a more complete resource-based theory of strategic advantage is to be developed.
Research on corporate boards and board reform efforts alike have been dominated by a concern for board independence and its effect on the monitoring of the CEO. However, attention to what we call the "usual suspects" - the number of outsiders on boards, director shareholdings, board size, and whether the CEO also holds the Chair position (CEO duality) - does not yield either strong research results or more robust corporate governance in practice. In this article we argue that the "usual suspects," as measured by the classic indicators, do not ensure a truly independent board and that the key to making boards work better rests in an area largely ignored by researchers: board process. Based on structured interviews with members of corporate boards, we open a window to what is really going on inside boardrooms. Our analysis suggests five critical goals for which all boards should strive and presents a detailed checklist of recommendations for directors on how best to realize these goals.
People tend to hold overly favorable views of their abilities in many social and intellectual domains. The authors suggest that this overestimation occurs, in part, because people who are unskilled in these domains suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it. Across 4 studies, the authors found that participants scoring in the bottom quartile on tests of humor, grammar, and logic grossly overestimated their test performance and ability. Although their test scores put them in the 12th percentile, they estimated themselves to be in the 62nd. Several analyses linked this miscalibration to deficits in metacognitive skill, or the capacity to distinguish accuracy from error. Paradoxically, improving the skills of the participants, and thus increasing their metacognitive competence, helped them recognize the limitations of their abilities. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
The process of theory construction in organizational studies is portrayed as imagination disciplined by evolutionary processes analogous to artificial selection. The quality of theory produced is predicted to vary as a function of the accuracy and detail present in the problem statement that triggers theory building, the number of and independence among the conjectures that attempt to solve the problem, and the number and diversity of selection criteria used to test the conjectures. It is argued that interest is a substitute for validation during theory construction, middle range theories are a necessity if the process is to be kept manageable, and representations such as metaphors are inevitable, given the complexity of the subject matter.
This article extends the scope of investigations into the potential risks of brand and line extension strategies. Here, the authors examine whether extensions can dilute beliefs associated with a strategically important and highly visible product-the flagship product. The results of three experimental investigations indicate that beliefs about flagship products are less vulnerable to dilution than beliefs about the parent brand name in general. The findings suggest that assessments of the impact of brand leveraging strategies should include analysis of the effects on individual products as well as on the family brand name.
The resource-based view of the firm has not been systematically applied to strategic alliances. By examining the role of firm resources in strategic alliances, we attempt, in this paper, to put forward a general resource-based theory of strategic alliances, synthesizing the various findings in the literature on alliances from a resource-based view. The proposed theory covers four major aspects of strategic alliances: rationale, formation, structural preferences, and performance. The resource-based view suggests that the rationale for alliances is the value-creation potential of firm resources that are pooled together. We note that certain resource characteristics, such as imperfect mobility, imitability, and substitutability, promise accentuated value-creation, and thus facilitate alliance formation. We discuss how the resource profiles of partner firms would determine their structural preferences in terms of four major categories of alliances: equity joint ventures, minority equity alliances, bilateral contract-based alliances, and unilateral contract-based alliances. As part of the theory, we propose a typology of inter-partner resource alignment based on the two dimensions of resource similarity and resource utilization, yielding four types of alignment: supplementary, surplus, complementary, and wasteful. We also discuss how partner resource alignment directly affects collective strengths and inter-firm conflicts in alliances, which in turn contribute to alliance performance. Finally, we develop a number of propositions to facilitate empirical testing of the theoretical framework, suggest ways to carry out this testing, indicate future research directions, and list some of the more significant managerial implications of the framework.
There has recently been tremendous interest in product innovativeness. However, it seems that we need a better understanding of exactly what product innovativeness means. This article presents a conceptual framework to clarify its meaning. The framework first distinguishes customer and firm perspectives on product innovativeness. From the customer's perspective, innovation attributes, adoption risks, and levels of change in established behavior patterns are regarded as forms of product newness. Within the firm's perspective, environmental familiarity and project-firm fit, and technological and marketing aspects are proposed as dimensions of product innovativeness. Next, the article offers a tentative empirical test of the proposed dimensions of product innovativeness from the firm's perspective. A well-known dataset of 262 industrial new product projects is used to: 1) clarify the product innovativeness construct and examine its underlying dimensions, 2) examine the relation of product innovativeness with the decision to pursue or kill the project, and 3) examine the relationship between product innovativeness and product performance. Five dimensions of product innovativeness are found which have distinct relations with the Go/No Go decision and product performance: market familiarity, technological familiarity, marketing fit, technological fit, and new marketing activities. Most strikingly, measures of fit are related to product performance, whereas measures of familiarity are not. The article concludes that researchers need to be careful about which definitions and measures of product innovativeness they employ, because depending on their choice they may arrive at different findings. New product practitioners are encouraged to evaluate new product opportunities primarily in terms of their fit with their firm's resources and skills rather than the extent to which they are "close to home."
A laboratory experiment examines factors affecting evaluations of proposed extensions from a core brand that has or has not already been extended into other product categories. Specifically, the perceived quality of the core brand and the number, success, and similarity of intervening brand extensions, by influencing perceptions of company credibility and product fit, are hypothesized to affect evaluations of proposed new extensions, as well as evaluations of the core brand itself. The findings indicate that evaluations of a proposed extension when there were intervening extensions differed from evaluations when there were no intervening extensions only when there was a significant disparity between the perceived quality of the intervening extension (as judged by its success or failure) and the perceived quality of the core brand. A successful intervening extension increased evaluations of a proposed extension only for an average quality core brand; An unsuccessful intervening extension decreased evaluations of a proposed extension only for a high quality core brand. Though a successful intervening extension also increased evaluations of an average quality core brand, an unsuccessful intervening extension did not decrease core brand evaluations regardless of the quality level of the core brand. The relative similarity of intervening extensions had little differential impact, but multiple intervening extensions hod some different effects than a single intervening extension.
Two studies were conducted to obtain insights on how consumers form attitudes toward brand extensions, (i. e., use of an established brand name to enter a new product category). In one study, reactions to 20 brand extension concepts involving six well-known brand names were examined. Attitude toward the extension was higher when (1) there was both a perception of "fit" between the two product classes along one of three dimensions and a perception of high quality for the original brand or (2) the extension was not regarded as too easy to make. A second study examined the effectiveness of different positioning strategies for extensions. The experimental findings show that potentially negative associations can be neutralized more effectively by elaborating on the attributes of the brand extension than by reminding consumers of the positive associations with the original brand.
This book discusses the development of a theory on the growth of the firm. It is shown that the resources with which a particular firm is accustomed to working will shape the productive services its management is capable of rendering. The experience of management will affect the productive services that all its other resources are capable of rendering. As management tries to make the best use of the resources available, a ‘dynamic’ interacting process occurs which encourages growth but limits the rate of growth.
The findings of prior research suggest that a brand's extendibility is constrained by the degree of perceived fit between the brand and extension product categories. However, there are many examples of brands that have been extended successfully into "perceptually distant" domains. Drawing on theories of consumer information processing and product adoption, the authors identify three background traits of prior work that may help explain the discrepancy between prior research and marketplace observation: (1) limited extension information, (2) failure to account for consumers' new product adoption tendencies (i.e., earlier versus later), and (3) single exposure to proposed extensions. In this study, the authors find that the effects of fit disappear when attribute information is added to extension stimuli and are applicable only for later product adopters. The authors also find that perceived fit increases with greater exposure to an extension. Beyond implications for brand extension research, this study underscores the need to recognize that certain research design factors related to external validity, which are often assumed irrelevant, can alter what is held to be true.
Organizations learn from other organizations. However, the observations available to them are typically a biased sample. The organizations that can be observed at any point in time are the survivors of a selective process that has eliminated a large fraction of the underlying population. In addition, there is a strong tendency to focus on successful organizations in books and the business press. As a result, the available sample of organizations usually undersamples failure. This paper shows that such undersampling of failure can contribute to a variety of false beliefs about effective management. Simply by observing existing organizations, laymen may get a misleading picture of the determinants of corporate performance. In particular, risky practices, even if they are unrelated to performance in the full population of organizations, may seem to be positively related to performance in a sample of survivors. I argue that this bias frequently implies that the organizational theories of managers and other observers of organizations will be systematically biased. Observations of existing organizations will show that unreliable, uninformed practices and practices that involve concentrated resource allocation are superior to reliable, informed practices or practices that involve diversified resource allocation. I show that this implies that observations of existing organizations will produce compelling but potentially misleading evidence for the significance several common managerial practices.
This paper presents an intraorganizational ecological perspective on strategy making and examines how internal selection may combine with external selection to explain organizational change and survival. The perspective serves to illuminate data from a field study of the evolution of Intel Corporation's corporate strategy. The data, in turn, are used to refine and deepen the conceptual framework. Relationships between induced and autonomous strategic processes and four modes of organizational adaptation are discussed. Apparent paradoxes associated with structural inertia and strategic reorientation arguments are elucidated and several new propositions derived. The paper proposes that consistently successful organizations are characterized by top managements who spend efforts on building the induced and autonomous strategic processes as well as concerning themselves with the content of strategy; that such organizations simultaneously exercise induced and autonomous processes; and that successful reorientations in organizations are likely to have been preceded by internal experimentation and selection processes effected through the autonomous process.