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Dynamic capabilities: what are they?

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Abstract

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.

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... This definition (Teeece et al., 1997) is cited by the numerous authors and urged subsequent scholars to refine and add different dimensions. Eisenhardt andMartin (2000, p. 1107) discussed DC in terms of "processes that use, integrate, reconfigure, gain and release resources to match and create changes in the environment". Teece et al. (1997) discussed DC as distinctive , however, Eisenhardt and Martin (2000) contrastingly, argued that DC might be unique but merely in details. ...
... Eisenhardt andMartin (2000, p. 1107) discussed DC in terms of "processes that use, integrate, reconfigure, gain and release resources to match and create changes in the environment". Teece et al. (1997) discussed DC as distinctive , however, Eisenhardt and Martin (2000) contrastingly, argued that DC might be unique but merely in details. Moreover, they argued that DC have many commonalities across the organizations, labeled as "best practices". ...
... Conversely, DC is largely dependent on the firm"s learning processes (Zollo and Winter, 2002), Innovation capability requires constant searching, scanning, exploration and implementation of the new internal and external opportunities (Hii and Neely, 2000), and market/customer demands and preferences (Mintzberg et al., 2003). Moreover, DC aims to identify opportunities by scanning, searching and exploring technological and market changes to match the resources and capabilities with the market changes (Eisenhardt and Martin, 2000;Teece et al. 1997;). Therefore, "Dynamic Capabilities and Innovation Capabilities are capabilities, and capabilities are often firmspecific" (Amit and Schoemaker, 1993, p. 35;Birchall and Tovstiga, 2005). ...
... Two major bodies of literature have evolved to explain why certain leaders have a global mindset while others stay trapped in their home countries, still unable to reap the benefits of globalization. Different theories on how managers of born globals pursue their global presence, regardless of resource constraints, include the entrepreneurship (Schumpeter 1934) and dynamic capabilities view (Eisenhardt and Martin, 2000;Teece et al., 1997;Zollo and Winter, 2002). ...
... Therefore, even if the tangible Impact of Entrepreneurial Orientation on Global Mindset resources are valuable, rare, non-imitable, and non-substitutable (Barney, 1991) and may provide a competitive advantage over rivals, they may not have a major role in new ventures (Knight and Cavusgil, 2004). Therefore, intangible capabilities, which are firms' capacity for "adapting, integrating, and reconfiguring internal and external skills, resources, and functional competencies to match the requirements of a changing environment" (Teece, Pisano and Shuen, 1997;Eisenhardt and Martin, 2000), are considered more important than tangible resources for new ventures (Peng, 2001). ...
... According to Peteraf, Di Stefano and Verona (2013, as cited in Rodrigo-Alarcón, García-Villaverde, Ruiz-Ortega, and Parra-Requena, 2018), the literature on dynamic capability has been contributed by mainly two papers: Teece et al. (1997) and Eisenhardt and Martin (2000). Teece et al. (1997) introduced "dynamic capabilities" as the skills of the firm at integrating, constructing, and reconfiguring both internal and external competences to face dynamic environments. ...
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The purpose of this study is to explain global mindset as a cognitive ability of business leaders based on entrepreneurial orientation and dynamic capabilities. This study attempted to answer the questions: Does entrepreneurial orientation impact the global mindset and do the three dimensions of dynamic capabilities mediate the relationship between entrepreneurial orientation and the global mindset? The data collected from 295 ICT born-global firms in Sri Lanka was analyzed using the structural equation modeling (SEM) analysis technique. The findings suggest that entrepreneurial orientation is a crucial driver of the global mindset. However, the effect of the entrepreneurial orientation is mediated by the seizing and reconfiguring dynamic capabilities. The conceptual framework and the findings of this study are part of the cause of the emerging literature on global mindset by understanding the global mindset through the lenses of entrepreneurial processes and dynamic capabilities. Further, entrepreneurs of born-globals should be aware that their global-mindset is determined not solely by their entrepreneurial processes but rather their entrepreneurial processes along with seizing and reconfiguration capabilities. This study can be regarded as an attempt to study global mindsets in a developing country context, incorporating entrepreneurial orientating and dynamic capabilities from two theories; entrepreneurship and strategic management.
... Researchers have also argued that the value of DCs is context-dependent (Wilden et al., 2013). Firms benefit more from DCs in turbulent environments (Peteraf et al., 2013;Teece et al., 1997), while, in stable environments, reconfigurations are less required (Eisenhardt and Martin, 2000). How DCs contribute to updating marketing and technological capabilities seems to depend on the level of competitive intensity and the combination of DC dimensions (Wilden and Gudergan, 2015). ...
... Competitive intensity is understood as the rate of change in the competitive landscape, including the general degree of competition, the extent of promotion and price wars, firms' ability to match competitive offers and the rate of competitive moves (Wilden and Gudergan, 2015). Some authors argue that DCs exist in both stable and fast-changing markets, taking on different shapes in each (Eisenhardt and Martin, 2000;Peteraf et al., 2013). ...
... In stable environments with predictable and linear paths, DCs are characterized as best practices (i.e. detailed, analytic and stable processes with predictable outcomes) (Eisenhardt and Martin, 2000), where their idiosyncratic details play a relevant role (Peteraf et al., 2013). ...
Article
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Purpose Dynamic capabilities (DCs) upgrade operational capabilities. However, DC dimensions of sensing, seizing and reconfiguring may combine in different configurations that result in alternative outcomes, depending on the firm's lifecycle stage. The purpose of this research is to explore configurations of DC dimensions during different stages of firms' lifecycles that result in operational marketing and technological capabilities. Design/methodology/approach Given the limited understanding of how DC dimensions and operational capabilities interact across a firm's lifecycle, the authors employed a multi-method approach to understand whether different configurations of DC dimensions may lead to operational marketing and technological capabilities and how the firm's lifecycle may condition these configurations. The authors first apply PLS path modelling to assess the validity and reliability of the measures. Then, the authors use fuzzy-set qualitative comparative analysis (fsQCA) to analyse micro, small and medium-sized enterprises (SMEs) in different growth stages operating in the creative industry within highly competitive and fast-changing environments. Findings Results show that several configurations of DC dimensions and competitive intensity influence marketing and technological capabilities. Although several configurations include sensing, seizing and reconfiguring, the findings also point to configurations where not all DC dimensions are present. Practical implications Improving operational capabilities does not necessarily imply a simultaneous presence of all three DC dimensions. Especially in the growth stage, managers that face resources shortage may only focus on sensing and seizing dimensions when developing marketing capabilities. Originality/value This research focuses on configurations of DC dimensions (instead of configurations of different types of DCs) that generate diverse marketing and technological capabilities development paths. The authors provide several equifinal configurations of DC dimensions that lead to operational marketing and technological capabilities. This study contributes to disentangling DCs and their dimensions across different lifecycle stages.
... First, the present study sheds light on how capability reconfigurations help manufacturers to change the focus of their strategic capabilities from products to smart solutions. Second, the study extends the discussion of capability modifications to smart solutions by emphasizing the interplay of realignment modes (building, leveraging, accessing, and releasing assets; see Danneels, 2011;Eisenhardt and Martin, 2000) and their reinforcing mechanisms for capability development to converge products, services, and software successfully. For managers, the present study provides guidelines and benchmarks for managing the processes of capability alterations when transitioning towards the provision of smart solutions. ...
... The almost never-ending debate on routines focuses on routine continuity: When should a firm establish a new routine and when should a new routine can be defined as a routine? Eisenhardt and Martin (2000;Danneels, 2011) suggest that firm-level renewal occurs through different resource realignment modes, namely, 1) creating new capabilities, 2) leveraging the current resource base in the form of new offerings, 3) accessing external resources, and 4) releasing existing resources. In enacting these four modes for exercising dynamic capability, new capabilities are created by accessing the modes of obtaining, acquiring, building, integrating, and developing new resources through new hires, business development programs, personnel training, or restructuring operations (Huikkola et al., 2016). ...
... First, we undertook a within-Case analysis of each of the six manufacturers by synthesizing the data into individual case stories to understand how they altered their assets to provide smart solutions. These stories describe the firm's traditional strengths, rationale for smart solutions, capability realignment modes of building, leveraging, accessing, and releasing capabilities (Danneels, 2011;Eisenhardt and Martin, 2000), and future capabilities and modus operandi. A within-case analysis uncovered how the manufacturers had realigned their assets and practices when moving towards the provision of smart solutions. ...
Article
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The present study analyzes how a product manufacturer alters its strategic capabilities to become a smart solution provider by employing its dynamic capabilities. We scrutinize how a manufacturer facilitates strategic change by realigning its strategic capabilities and processes from a focus on technical product-development capabilities to product-service-software development capabilities, reconfiguring organizational routines focused on efficiency to routines focused on customer productivity, and shifting from a product logic to a service logic. By studying six leading manufacturing firms based on 86 manager interviews, the present study finds that strategic capabilities are renewed through dynamic capabilities, which involve a reconfiguration of strategic capabilities and processes. Furthermore, manufacturers need to consider the dynamic interplay between resource realignment modes (building digital capabilities, leveraging existing capabilities, accessing external capabilities, and releasing decaying capabilities), hence stressing their reinforcing mechanism to converge products, services, and software. For managers, our study highlights several strategic renewal practices designed to assist and benchmark how strategic capabilities are altered.
... Dynamic capabilities theory emerged in the 1990s, proposed by Teece et al. (1997) as a necessity as a complement to resource-based theory (Eisenhardt and Martin 2000;Grant 1991;Rivera and Figueroa 2013). This concept is defined as the capability of the organization to integrate, build, and reconfigure internal and external competencies that will enable it to face rapidly changing environments (Teece et al. 1997). ...
... Augier andTeece (2009) andDe Silva et al. (2021) add that having the right business model is a critical factor for success, and this includes adjustments or improvements for continuity. For their part, Eisenhardt and Martin (2000) state that the ability to reconfigure internal resources permits them to be replicated, transferred, and recombined, thus reaching a more strategic level when managers establish networks of collaboration among areas of the company to generate synergies. Reconfiguring encompasses actions such as the geographic transfer of assets, redesign of business models, mergers, acquisitions, investments or abandonment of investments, technology changes, routines of knowledge creation, alliances, and the incorporation of new resources or abandonment of obsolete ones (Eisenhardt and Martin 2000;Teece 2007). ...
... For their part, Eisenhardt and Martin (2000) state that the ability to reconfigure internal resources permits them to be replicated, transferred, and recombined, thus reaching a more strategic level when managers establish networks of collaboration among areas of the company to generate synergies. Reconfiguring encompasses actions such as the geographic transfer of assets, redesign of business models, mergers, acquisitions, investments or abandonment of investments, technology changes, routines of knowledge creation, alliances, and the incorporation of new resources or abandonment of obsolete ones (Eisenhardt and Martin 2000;Teece 2007). In more recent studies, we find the relationship of reconfiguration with proactive environmental strategies and eco-sustainable innovation (Reyes-Santiago et al. 2019). ...
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The purpose of this study is to identify the model that explains the process of creating dynamic capabilities of the sole proprietorships in the music industry. Following the design of the constructivist grounded theory, the cross-sectional study was carried out with 20 sole proprietorships in the music sector, with participants residing in 10 different countries. The study was conducted under inductive and abductive reasoning through the technique of the semi-structured interview. Through the comparative analysis, groups of businesses were identified as either resistant or dynamic, depending on their relationship to the components of dynamic capabilities. It was seen that sole proprietorships having greater interaction with these components were better adapted to the dynamic environment of the industry. Likewise, it was observed that the emotional factors of the owners are relevant for the development of dynamic capabilities in this type of business. This study proposed a substantive theory about the processes of development of dynamic capabilities in sole proprietorships. The contribution of the study is theoretical, practical, and methodological. A theoretical model is presented of the structure of the dynamic capabilities that are proposed as an adequate methodology for the design of grounded theory and the practical application by sole proprietorships. It is concluded that the sole proprietorships that develop the four components of the proposed model are able to develop dynamic capabilities and are distinguished by the actions taken in these processes and by their favorable results.
... Emerging from limitations of the resource-based view (RBV; Barney, 1991;Wernerfelt, 1984), the DCV allows scholars and practitioners to consider how to outperform competitors in a changing environment that can be seen as an opportunity rather than a threat (Eisenhardt and Martin, 2000;Helfat and Peteraf, 2003;Lacerda et al., 2014;Teece et al., 1997). The concept of dynamic capabilities (DCs; Teece et al., 1997) was therefore developed to reflect the dynamic challenges faced by organisations (Winter, 2003) and to highlight the need for appropriate resources and capabilities with which to respond to situation-specific changes (Eisenhardt and Martin, 2000;Teece et al., 1997). ...
... Emerging from limitations of the resource-based view (RBV; Barney, 1991;Wernerfelt, 1984), the DCV allows scholars and practitioners to consider how to outperform competitors in a changing environment that can be seen as an opportunity rather than a threat (Eisenhardt and Martin, 2000;Helfat and Peteraf, 2003;Lacerda et al., 2014;Teece et al., 1997). The concept of dynamic capabilities (DCs; Teece et al., 1997) was therefore developed to reflect the dynamic challenges faced by organisations (Winter, 2003) and to highlight the need for appropriate resources and capabilities with which to respond to situation-specific changes (Eisenhardt and Martin, 2000;Teece et al., 1997). DCs encompass the ability to develop and reshape existing resources, such as human resources, policies and procedures and external support, to enable an appropriate and expedient response to a rapidly changing environment and, thereby, build competitive advantage (Eisenhardt and Martin, 2000;Teece et al., 1997). ...
... The concept of dynamic capabilities (DCs; Teece et al., 1997) was therefore developed to reflect the dynamic challenges faced by organisations (Winter, 2003) and to highlight the need for appropriate resources and capabilities with which to respond to situation-specific changes (Eisenhardt and Martin, 2000;Teece et al., 1997). DCs encompass the ability to develop and reshape existing resources, such as human resources, policies and procedures and external support, to enable an appropriate and expedient response to a rapidly changing environment and, thereby, build competitive advantage (Eisenhardt and Martin, 2000;Teece et al., 1997). In addition, Winter (2003) described DCs as high-level routines that provide firms with multiple production and operational options. ...
Article
In the face of unexpected changes in their dynamic business environment, purchasing and supply chain (SC) managers have been challenged to boost SC resilience while maintaining their sustainability concerns. In this changing environment, this paper aims to explore: (1) how (social) sustainability affects SC resilience and (2) what the role of purchasing is for SC resilience. Through a dynamic capability view as the theoretical lens, we investigate whether and how an inclusive purchasing programme could enhance SC resilience capabilities to cope with the Covid-19 outbreak. We developed a Case study with various SC members of a multinational cosmetics company that, despite suffering from a sudden demand disruption during the outbreak, maintained its sustainability actions. The results show that four operational SC resilience capabilities were amplified: ‘visibility’, ‘adaptability’, ‘collaboration’ and ‘financial strength’. In addition, a new capability entitled ‘empowerment’ was mobilised during this period. These factors helped the inclusive purchasing maintenance and were essential to supporting social sustainability. In addition, our results show that sustainable PSM, which is overlooked in the literature, is key for SC resilience. This article contributes to theory and practice because it demonstrates the role and relevance of (inclusive) purchasing in a company's ability to cope with SC disruptions, such as those resulting from the outbreak.
... DCs, which have been characterized as the firm's ability to sense, seize, and reconfigure organizational resources and capabilities in pursuit of sustainable competitive advantage (Teece, 2007(Teece, , 2014(Teece, , 2007, can also indicate why initial gains of lean management are high but later these outcomes (not only economic outcomes but also social and environmental benefits) are difficult to be maintained. Starting from the central premise that sustainability is a competitive advantage (Kumar et al., 2018;Alves and Alves, 2015), DCs as sources of sustained competitive advantage (Pavlou and El Sawy, 2011;Teece, 2007;Eisenhardt and Martin, 2000) seem to be necessary in high-velocity environments to adjust lean routines and achieve sustainable business performance. Lean management practices can be treated as "ordinary" capabilities or static routines: practices that although they add value to an organization, they only allow a firm to "make a living" in the short-term (Winter 2003). ...
... The reason is that ordinary capabilities are static in nature and seem to be strong only when best practices are achieved (Teece, 2014). Moreover, static practices might be sufficient in munificent environments but in highly dynamic environments, those practices are fragile and fail to result in sustainable outcomes (Eisenhardt and Martin, 2000). We argue that in today's competitive environment characterized by technological development, intense competition, and changes in customer requirements, best practices can only be achieved through persistent development of ordinary capabilities. ...
... However, in today's global markets, most firms have access to the same set of resources and, hence, organizational resources are not rare and valuable anymore and usually are imitable by a firm's potential competitors. Furthermore, a static approach like RBV cannot address sustainable and long-term competitive advantage in the face of turbulent and uncertain environments with rapid changes (Kumar et al., 2018;Eisenhardt and Martin, 2000). Therefore, the theory of dynamic capabilities (DCs) enhances the RBV with the focus on "difficult-to-replicate capabilities" as a consequence of the firm's ability to adapt to uncertainties and dynamically changing environments (Teece, 2007). ...
Article
This study empirically investigates the relationships between lean management practices, dynamic capabilities, and sustainable business performance (including economic, environmental, and social performance). Based on the dynamic capabilities approach, known also as a theory of sustainable competitive advantage, we explain why many adopters of lean management fail to sustain positive outcomes over time. More concretely, first, this study conceptually identifies systematic problem-solving, agile manufacturing (or change proficiency), and continuous improvement as higher-order or “lean-related dynamic capabilities” that seem to be effective for sustainable benefits. Then, a survey questionnaire on a sample of 99 Italian manufacturing firms is carried out and results of partial least square structural equation modelling indeed reveal that “lean-related dynamic capabilities” can serve as mechanisms through which lean management contributes to sustainable business performance. The main findings help to distinguish between “lean adopters” achieving sustainable outcomes and “lean duplicators” obtaining only short-term outcomes and quick wins. For firms to become “lean adopters”, they are required not only to consider lean as a full package but also to constantly establish and develop higher-order or “lean-related dynamic capabilities”. This study is an innovative empirically-informed attempt to conceptualize “lean-related dynamic capabilities” and embed them into a framework through which lean management practices result in sustainable outcomes.
... Digital platforms depart from the notion of value creation as taking place in linear value chains to embrace the notion of value creation through open innovation in value creation systems (VCSs). 23 Although the plea for such a radical departure is not new (Normann 2001), this paradigm shift is yet to take place in the mainstream strategic management literature (Eisenhardt and Martin 2000;Teece 2007;Porter 2008) and is more often mentioned in connection with strategic management approaches that construe strategy as practice (Golsorkhi et al. 2015;Ramírez and Wilkinson 2016). Yet the ongoing platform revolution is changing this situation. ...
... Such frameworks will be of the essence for the strategy of digital platforms going forward, as they will allow them to master the hard balancing act between pursuing market opportunities and exploiting known limitations of market systems, such as monopolistic tendencies, on the one hand, and delivering human, public and common goods in their extended innovation ecosystems and society at large, on the other. We will also work on the development of a strategic management framework based on the concept of metadynamic capabilities that goes beyond the current competing views of dynamic capabilities (Eisenhardt and Martin 2000;Teece 2007Teece , 2014. The aim of this metadynamic capabilities framework will be to better capture the way digital platforms inform, drive and execute business strategy in their extended innovation ecosystems. ...
Article
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In this article, we introduce the global stakeholder capitalism model of digital platforms. We describe the role that big data plays in the formation of the new extended innovation ecosystems of digital platforms and explain how these extended innovation ecosystems give rise to this new model. We discuss the implications of this new model for the strategy of digital platforms from a Schumpeterian perspective and show how digital platforms profit from innovation by capturing a form of rents that differs from standard Schumpeterian rents rooted in innovation economics. We conclude that the sustainability of this model depends on a new form of governance that assumes multi-fiduciary corporate duties in the extended innovation ecosystems of digital platforms.
... There is broad and enduring interest in understanding how firms operating in dynamic environments adapt and change their strategies to sustain superior performance (e.g., Brown & Eisenhardt, 1997;Luciano, Nahrgang, & Shropshire, 2020;Tushman & Anderson, 1986). One particularly influential body of work in the strategic management literature focuses on the evolution of a firm s organizational capabilities in a dynamic environment (Nelson & Winter, 1982), along with the ability to adapt these capabilities for strategic change reliably, so-called dynamic capabilities (Eisenhardt & Martin, 2000;Teece, 2007;Teece, Pisano, & Shuen, 1997). More recently, a research stream on the microfoundations of organizational capabilities has emerged (Helfat & Martin, 2015;Helfat & Peteraf, 2015;Kor & Mesko, 2013;Schilke, Hu, & Helfat, 2018), driven by an interest in the role of managerial decisions. ...
... Our review sheds light on the missing link between senior managers decisions and the organization s capabilities. Strategy scholars generally agree that senior managers must leverage knowledge generated by teams to gain and maintain competitive advantage, but they often mention teams only in passing (e.g., Eisenhardt & Martin, 2000;Helfat & Raubitschek, 2000;Stadler, Helfat, & Verona, 2013;Teece et al., 1997). Connecting levels of analysis helps strengthen the dynamic capabilities framework s contribution to our understanding of how organizations achieve long-term performance, and it emphasizes underexplored dynamic managerial capabilities stemming from team and organizational design. ...
... Even though there are different views on whether DC directly affects the success of firms or whether it is how a firm 'uses' dynamic capabilities, there is wide agreement that improving DC of firms in order better deal with changes coming from both inside and outside a firm, positively influences firm performance (Drnevich and Kriauciunas 2011). Eisenhardt and Martin (2000) discuss that even if firms have appropriate resources, competitive advantage will not be sustainable if firms do not have the processes necessary to identify and reconfigure resources to pursue new opportunities and adapt to shifting environments. From the point of view of DC, these processes comprise three main components: sensing, seizing, and transforming (Teece 2007). ...
... The DC literature recognizes that capabilities related to such processes do not only derive from a firm's own asset base (Eisenhardt and Martin 2000;Augier and Teece 2009), but also from external actors such as clients or stakeholders (Kurtmollaiev 2020). This resonates with concepts from strategic marketing and innovation literature such as crowdsourcing (Schenk and Guittard 2011), service co-creation (e.g., Grönroos and Voima 2013), and open innovation (Chesbrough 2003), that all acknowledge that resources, ideas, and innovation often emerge in the interplay between firm-internal resources and communities of users. ...
Article
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The COVID-19 pandemic has led to many firms reassessing how to deal with their communities. In this study, we focus on a coworking space and examine how the management staff and its coworking community reacted to the pandemic. The uniqueness of coworking spaces is that the community is both the paying customer and it is an integral part of the coworking value proposition. For this paper, a case study in Amsterdam was analyzed and the symbiotic relationship between the coworking space and one of its key resources (the community) was examined. We build on dynamic capabilities theory to identify the processes of how a firm and its community maneuver through the pandemic. We propose that in vibrant times, firms and communities should work in close alignment in order to sense, seize, and transform resources and opportunities.
... The difference between being in a fit with and being adaptive was also conceptualized in strategic management. Teece popularized the concept of dynamic capabilities [27], [28] that has been widely adopted in strategic management literature (e.g., [29]- [32]). Dynamic capabilities enable a 2 We use the term requisite fitness analogously to the concept of requisite variety [74], [75]. ...
Conference Paper
Researchers struggle to understand the nature of digital transformation and approach the conceptualization from various research perspectives. Concurringly, digital transformation is seen as an evolutionary change process with an increasing digitalization at its heart. Although a process requires a target state, a target state for digital transformation has not been discussed satisfactorily so far. Consequently, it is difficult for managers to steer with an eye on the goals in this change process. To provide guidance in this change endeavor for managers, researchers have developed different digital transformation maturity models. These models typically suggest a linear development for organizations but neglect idiosyncratic development paths for digital transformation. They combine aspects of matching current stakeholder demands with being prepared for future demands regarding digitalization. However, they typically design an end state or a best stage, which seems to be contradicting as digital transformation as an evolution has no target or end. To address this challenge of evolutionary change, a concept of digital fitness is introduced in this contribution, which reflects the ability of organizations to cope with current and future expectations of external stakeholders. A digital fitness model is presented that claims to conceptualize how a responsible management-focusing on the Chief Digital Officer and the Chief Information Officer-can decide for an appropriate level of digital fitness according to present and future external expectations. Building on that, a digital fitness matrix with implications for management strategies is presented.
... Dynamic capability concept originally defined as the "firm's ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments" [49].Competency reflects the managerial and organizational process or patter of practices and learnings. Eisenhardt [50] also subsequently defined dynamic capabilities as "the firm's process that uses resources to match and create market change". The authors also outlined examples of dynamic process such as product development routines, resource allocation routines, knowledge transfer routines. ...
Chapter
Sustainable performance demands to show a sustained competitive advantage that lasts a long period. “Industrial Parks” is now the gateway to sustainable development, especially in the least developing countries like Ethiopia, for example. The industrial parks are highly attracting foreign direct investment and working for the inclusive development of the country. Though this is a good start, the capability is at an initial stage and needs support in terms of their performance towards creating a sustainable operation. Based on the evidence of both theoretical and empirical literature findings, this study paper conducted a review and identified the sustainability measures and practices from which it tries to filter the key capability measures and practices for the Ethiopian industrial parks. For integrating the identified practices and measures, as a methodological approach, the theory of dynamic capability process is considered, encompassing sensing, learning, and transforming the cyclic loop. Practices and measures are incorporated in each process of dynamic capability pillars. A conceptual model was developed as the final output showing the holistic map of the integrated sustainability measures and practices. The measures and practices identified will fully support the sustainable growth and decision process of the industrial park operation. It also adds value to the body of knowledge in industrial sustainability in special economic zones.
... Being essentially a dynamic capability (Teece and Pisano 1994), the strength of a firm's ability to sense customer needs depends on whether it has structured (but not necessarily formalized) routines in place for staying aware of its customers' needs. Although firms can differ in how they fulfil these routines, as indicated by the notion of micro-foundations, there is general agreement that higher-order capabilities can be compared across firms (Eisenhardt and Martin 2000;Teece 2007). Such a comparison can point to different capability levels or strengths. ...
Article
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Sensing customer needs capabilities generally help firms to utilize customer feedback. Yet, as research linking micro-economics to industrial dynamics has shown, a strong focus on such feedback may prevent an adequate response to more promising market developments. We analyse this tension for firms providing customized services, whose innovativeness heavily depends on customer input. By drawing upon an NK search model, we simulate various interactive search strategies. Our simulations result in hypotheses concerning the strategies’ relation to innovation-based turnover. We use survey data from 292 firms to substantiate our expectations empirically. Both our simulation and regression results point to a positive influence on turnover of sensing customer needs and of customer feedback. While the interaction effect is positive for non-customizing service providers, it is negative for their customizing counterparts. The latter group may fail to exploit their inventiveness, as they concentrate on tuning new services to the specific needs of existing customers rather than turning them into more widely marketable innovations.
... The ability of an organization to create a defensible and distinct position compared to its rivals is called CA (32)(33)(34). The resources which provide a CA for a firm should be valuable, scarce, unique, and irreplaceable (35,36). ...
Article
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The pharmaceutical industry's performance in the global economy has been affected by the growing competition associated with globalization, economic liberalization, and the trade-related aspect of the intellectual property rights (TRIPS) agreement. To maintain performance, organizations need to consider strategic foresight (SF) and organizational resilience (OR) to anticipate future trends and survive crises. By proposing a conceptual framework, this study examines the relationship between organizational resilience, strategic foresight, competitive advantage (CA), and firm performance (FP). A conceptual framework was developed to assess the hypotheses in the pharmaceutical industry. Then, partial least squares structural equation modeling (PLS-SEM) was applied to investigate the relationships quantitatively. The results of structural equation modeling (SEM) based on the data generated from 202 completed questionnaires by the pharmaceutical companies in Iran demonstrate that OR, SF, and CA have significant positive impacts on FP. Moreover, CA partially mediates the relationship between OR and FP and also between SF and FP. The findings of this study enrich the existing literature by demonstrating that early detection of environmental change and resilient manner assist Iranian pharmaceutical firms to survive if joining the WTO. This is the first study that examines the direct and indirect effect of OR and SF on the FP, considering the mediating impact of CA. This investigation attempts to address the mechanisms through which OR and SF affect organizational performance, especially in the pharmaceutical industry.
... For sustaining profit margins and competitiveness, firms must constantly improve its productivity (Samardzija & Fadic, 2009).Currently, business excellence initiatives (BEIs) is arising like substantial criteria to enhance consumer contentment and efficacy of businesses (Ittner & Larcker, 1998).The notion of BE is grounded on the beliefs and frameworks of total quality management (Adebanjo, 2001).BE utilizes philosophies and tools of TQM with intent to enhance performance outcomes (Drescher et al., 2011).BE initiatives are internationally proven instrument to enhance performance (Samardzija & Fadic, 2009).Researches show a number of models to inspect BE driven performance for instance Malcolm Baldrige model, European Foundation for Quality Management Model and Deming Prize Model (Vartiak & Jankalova, 2017).Furthermore, the business process capabilities are also observed as an influential way to maintain business performance outcomes (Eisenhardt & Martin, 2000). ...
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Presently, business excellence initiatives (BEIs) is functioning like a substantial criteria to increase efficiency of businesses to remain competitive. In this concern, the purpose of this study involves inspecting the effect of BEIs on performance of pharmaceutical sector of Pakistan by way of utilizing the role of business process capability mediating mechanism. An intermediating framework is proposed and data is assembled via a modified instrument (questionnaire) from 514 top and middle level managers. CFA is utilized for estimating the postulated framework's fitness. The estimates of CFA models depicts that the proposed framework is fit. The outcomes of path coefficient (standardized) validate the significant contribution of BEIs on performance of pharmaceutical sector. The outcomes of study show that each of the postulated hypothesis is significant statistically (p<0.001) and furthermore indicating that business process capability (mediatory variable) is also associated with excellence initiatives of business and performance predictors. Moreover, study's outcomes depict that business process capability shows partial mediation in BE focused performance and significantly contributes in value formation. This study proposes valuable insights for practitioners as well as future researchers thus suggesting that managers need to build an effective BEIs system to make business processes more influential for boosting performance of pharmaceutical sector of Pakistan. Firms must dedicate all of its potential in recognition and execution of BEIs as well as in enhancement of business process capabilities to attain improved BE focused performance.
... Davies et al. (2016) assert that the dynamic capabilities theory is the combination of the resource-based view (Teece et al., 1997), contingency theory (Donaldson, 2001). Eisenhardt and Martin (2000) emphasized that the dynamic capabilities are the forerunner organizational and strategic routines where existing capabilities modified, integrated, recombined to generate new value to the organizations. Although components of EMC can be discussed with other theories, dynamic capability theoretical lenses are more suitable to understand for EMC itself. ...
Conference Paper
This paper appraises the existing studies, addresses possible knowledge gaps and highlights the future research for the Collaboration in developing Complex Products and Systems (CoPS). A well-defined systematic literature review was undertaken to identify research themes, trends and patterns, theoretic lenses used and key issues that emerge. Our findings reveal the weakness of the given capability definitions in relation to CoPS collaboration and suggest an integrated framework for forwarding CoPS research.
... Through developing such distinctive competencies and offering unique positive experiences, competitive advantage is achieved. Building on the resource-based view, scholars have proposed the dynamic capabilities view to better explain how competitive advantage can be developed and sustained (Eisenhardt & Martin, 2000; Helfat & Peteraf, 2003; Teece, Pisano, & Shuen, 1997). Teece et al. (1997, p. 516) referred to dynamic capabilities as an " ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. ...
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This article analyzes tourism plans and policies related to cultural tourism in Turkey. Past and current tourism plans and policy documents, as well as discourses of government officials, were content analyzed. The research findings indicate that Turkey has been positioned as more a sun, sea, and sand destination than a cultural destination. According to the State Planning Organization’s Five-Year Development Plans, as well as past and current tourism plans for Turkey such as Tourism Vision 2023, cultural tourism is seen more as an alternative and secondary type of tourism for Turkey. One can claim that this is perhaps a missed opportunity for Turkey given its rich and unique cultural resources, since Turkey can offer unique, positive, and memorable cultural experiences for culture-core and culture-peripheral tourists. In order to achieve this, it is essential to symbolize and rejuvenate unique cultural resources so that innovative cultural capabilities (experiences) can be offered. In return, such original and vibrant experiences can better differentiate Turkey as a destination from its competitors. The article provides theoretical and practical implications and suggests areas for future research.
... In the dynamic-capabilities framework, the learning of the routines needs to take place at both the individual and organizational level and is driven by a steady demand for adaptation to the task environment. Naturally, having learned the appropriate patterns of activity substantially increases task performance [38,112]. This means that individuals and organizations need to reconfigure their capabilities (e.g., knowledge, skills, abilities) to meet the requirements for solving the tasks they face efficiently and successfully. ...
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Previous research on organizations often focuses on either the individual, team, or organizational level. There is a lack of multidimensional research on emergent phenomena and interactions between the mechanisms at different levels. This paper takes a multifaceted perspective on individual learning and autonomous group formation and adaptation. To analyze interactions between the two levels, we introduce an agent-based model that captures an organization with a population of heterogeneous agents who learn and are limited in their rationality. To solve a task, agents form a group that can be adapted from time to time. We explore organizations that promote learning and group adaptation either simultaneously or sequentially and analyze the interactions between the activities and the effects on performance. We observe underproportional interactions when tasks are interdependent and show that pushing learning and group adaptation too far might backfire and decrease performance significantly.
... The Dynamic Capabilities View (DCV) is an extension of the traditional Resource Based View (RBV) of organisations (Eisenhardt & Martin, 2000;Teece et al., 1997;Teece & Pisano, 1994), which evolves from existing resources and help organisations transition from static to dynamic/uncertain environments (Díaz-Chao et al., 2021). ...
Article
An organisation's sustainability performance is influenced by its capabilities (skills, resources and competences) which in turn affects the performance of its entire supply chain. However, recent research has not sufficiently explored the convergence of dynamic capabilities, circular economy, resilience and Industry 4.0 concepts for manufacturing supply chains. Therefore, this study aims to identify how dynamic capabilities theory can enable circular and resilient supply chains. A qualitative research process was deployed in three stages: literature review, European project and nine expert interviews. Key investigative variables were used to identify capabilities used in manufacturing, and five research propositions were developed to address the gaps found in literature. The empirical data helped reveal challenges to circular economy implementation and validate the literature findings. The main contributions include a dynamic capabilities model, a causal relationship model and five research propositions for circular economy implementation.
... Owing to the dynamic market capabilities, enterprises can be too harsh to respond to new situations with poor adoption and development of old skills (Leonard-Barton 1992). Market's dynamic capabilities refer to the routines and resources with the help of which an enterprise transforms its capabilities to respond to the changing business environment and market ecosystem (Collis 1994;Eisenhardt and Martin 2000;Winter 2003;Zardini et al. 2020). These characteristics are intensely related to firm-level innovation activities (Teece et al. 1997). ...
Article
In the context of globalization, the informal sector enterprises are also exposed to international competition; and therefore, they need to remain productive and competitive. In this regard, innovation is an obvious strategic choice at the firm level. Drawing from the data gathered through an extensive field survey in NCT-Delhi, India, this study observes that innovation activities in the informal enterprises take place mostly through non-research-and-development routes and rely more on interactive learning and learning by doing. The econometric analysis shows that formal interactions through subcontracting and membership in the industrial associations along with informal interactions with other firms, buyer–supplier interactions, and social capital are having positive and significant influence on product, process, and marketing innovation. However, this study reveals that formal interactions play a vital role in introducing marketing innovations. Further, the results show the essential role of in-house training, entrepreneurial expertise, and information communication technology usage at the firm level. Thus, the paper provides empirical evidence reiterating the importance of integrating informal manufacturing enterprises and their learning processes as the key components of the innovation system in India.
... Inability to engage with partners and take advantage of strengths within the system suggests an inability to adapt. However, when a firm is able to integrate, reconfigure, gain and release resources within the organization to achieve success, the firm is said to have the capability to adapt (Eisenhardt & Martin, 2000). Active agents recognize that success requires capability to adapt to remain viable. ...
Article
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Supply chain clusters achieve viability by exploiting geographical concentration to gain efficiencies in matching supply and demand. Although the benefits of operating in these environments are understood, little is known about how supply chain clusters form and adapt. From a systems theory perspective, causal events lead to this formation and adaptation and facilitate sustained operation in modern business settings. This paper extends this understanding by theorizing key antecedents responsible for supply chain cluster formation and adaptation, conceptualizing individual firms as agents. Through a characterization of agents as either passive or active, we construct propositions and a conceptual model. The modelling, supported by causal loop diagrams, details the interactions between agents that lead to cluster formation and adaptations to contextual changes in supply chain clusters. These findings can guide policy design that is more effective in enabling the emergence and sustained existence of supply chain clusters through facilitated causal interactions. K E Y W O R D S agents, cluster, self-organization, supply chain
... Despite the advantages of the approach, there is still little empirically supported understanding of why some CI initiatives succeed and others fail. Dynamic capabilities, which emerged from Schumpeter and Nichol's (1934) concept of innovation-based competition, have been receiving a good deal of attention in the academic and management community in the CI field, because these help to configure/reconfigure companies' operational capabilities and enable them to adapt to turbulent environments (Eisenhardt and Martin 2000;Helfat 1997;Pavlou and El Sawy 2011;Teece et al. 1997). These capabilities are defined as "… the firm's ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments" (Teece et al. 1997, p. 516). ...
Article
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Most continuous improvement (CI) projects fail due to poorly developed hard/soft enablers. Previous studies have considered these enablers mainly at the organizational level. Although the context of each CI project is complex and unique and represents a temporal organization that also determines the project’s success, its internal factors have been under-researched. The paper analyzes the CI project from a dynamic capability (DC) perspective by differentiating between zero/first-order and second-order routines (i.e., the DCs of the CI project). Moreover, it conceptualizes, operationalizes, and validates a measurement model of such DCs. The unit of analysis is the CI project, and the sample consists of 68 projects (one per organization) in Colombia. The empirical validation criteria comprise goodness-of-fit, reliability (Cronbach’s alpha and composite), and validity (convergent and discriminant). The paper provides a reasonable/parsimonious measurement model comprising five DCs (synergy, ideation, absorption, integration, and coordination) at the CI project level. It clarifies the DCs of the CI project and how they can be operationalized. Based on this measurement model, we argue the role of such DCs in facilitating organizational adaption to changes in the environment (a novel conceptual model). These insights will be valuable for decision-making by researchers and managers in quality/project/operational management
... 'transforming' -continued renewal Their efforts over the years had led to DC evolving into a distinct research topic that was based on earlier works such as strategic management (Mintzberg, 1994), patterned behaviour and stored knowledge (Nelson & Winter, 1982), core competency (Prahalad and Hamel, 1993) and the resource-based view (Barney, 1991;Wernerfelt, 1984). Other management scholars have also adapted DC with slightly different viewpoints (e.g., Eisenhardt and Martin, 2000;Helfat and Winter, 2011;Helfat and Peteraf, 2015;Arndt and Pierce, 2018) that emphasises behavioural (e.g., best practices, benchmarking) vs evolutionary (e.g., innovation) theories. ...
Conference Paper
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A built environment can be considered as a complex system with multiple layers and networked organisations, institutions, and users that collectively create value for all parties involved. The rapid transformational advances in technologies, increasing demands from stakeholders, and significant disruptions caused by natural disasters present many challenges for managers responsible for ensuring sustainable capabilities and capacities for their organisations are maintained to optimise value for all stakeholders. In this study, we look at three perspectives that have emerged in response to such challenges in the strategic asset management literature: (i) the dynamic capabilities paradigm, (ii) a holistic systems approach, and (iii) the business model concept. With few exceptions, these multidisciplinary viewpoints have often been treated separately, leading to several limitations for their application in practice. While complex systems are fundamentally deterministic, successful organisations have created complex adaptive systems that exhibit flexibility and resilience in challenging situations. This article will explore the linkages of these perspectives and suggest a business model design that presents effective enablement of different tangible and intangible resources owned or controlled by an organisation and those in the wider networked environment. This enablement will lead to creating and extending the organisation's capability and capacity using its resource base. This article contributes to asset management literature by using established theories to study a distinctly overlapping body of knowledge that applies to asset management in the built environment that is often absent. It is based on a systematic literature review for AM publications between 2014-2021, including a snowballing technique that led to relevant articles prior to the study period. The findings of this study will form part of an ongoing larger research study on optimising value through enhanced asset management capability for the New Zealand built environment.
... 3 Eisenhardt and Martin argue that dynamic capabilities 'are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing' . 4 Building his analysis of Smith Corona on Eisenhardt and Martin's conceptualisation of dynamic capabilities, Danneels assesses them as 'changes in the firm's set of resources can be achieved by various modes such as leveraging, accessing, and releasing' . 5 Teece, Peteraf and Leih noted that dynamic capabilities govern the speed and agility with which an organisation can respond effectively to emergent environmental threats or identify and seise opportunities before competitors, 6 whereas Helfat and Peteraf introduced an important temporal dimension to the debate and concept with their 'capabilities lifecycle' approach to capture 'a general pattern and set of paths that characterize the evolution of an organizational capability' . ...
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In this article we examine the development of the Scotch whisky industry since 1945 through the lens of dynamic capabilities. We explain how sui generis acts—novel initiatives outwith the established repertoire of practices of a firm or industry—by external actors joining the industry helped unlock dynamic capabilities at the firm level in the industry which in turn drove change across the sector after a series of takeovers. We detail the key structural changes in the Scotch whisky industry and demonstrate how important external actors can be in effecting sector level change by extending and connecting our analysis to existing debates in business history and strategy research.
... Strategic mistakes can occur due to inaccurate evaluations of the business environment or due to persisting with the same strategy despite sensing environmental uncertainty . It is a type of dynamic capability that makes organizations compete in dynamic markets (Eisenhardt and Martin, 2000). Strategic flexibility is the key component to break organizational inertia (Talapatra et al., 2019a, b;Talapatra and Uddin, 2019). ...
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Purpose Industry 4.0 (I 4.0) consists of numerous digital technologies applied in organizations strategically to add value to the customer. Different organizations have varying degrees of technological capability and strategic flexibility. This paper aims to explore the relationship between technological capability and strategic flexibility on successful implementation of I 4.0. Design/methodology/approach A qualitative study using a grounded theory approach is conducted on 34 senior managers from Europe and North America who have implemented I 4.0 participated in this study through a theoretical sampling frame. Findings This study finds that technological capability and strategic flexibility have an impact on the successful implementation of I 4.0. The study also finds that different dimensions of technological capability also impact I 4.0. The interactive effect of strategic flexibility and technological capability is also noted. The study also develops a framework for successful implementation of I 4.0. Practical implications This study can be used by managers while implementing I 4.0 to devise a strategic roadmap for acquiring technological capability with I 4.0 technologies. Besides, it will help the managers to consider the bidirectional relationship between technological capability and strategic flexibility while formulating I 4.0 strategy for successful implementation of I 4.0 in their organizations. Originality/value Previous studies have examined the importance of I 4.0 technologies. However, this study extends the previous works by suggesting how technological capability and strategic flexibility can help in the successful implementation of I 4.0.
... Examples of functional capabilities include operational capability, marketing and sales capability, and human resource capability (Grant, 1996). Dynamic capabilities are higher-order capabilities that reconfigure and renew lower-order functional capabilities; examples include learning capability and effective product development capability (Eisenhardt & Martin, 2000;Teece et al., 1997). Organizational capabilities consist of routines and processes that have repeatable patterns of activities and typically involve and integrate multiple actors and assets within the firm (Becker, 2004;Felin & Foss, 2009). ...
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Extant studies suggest that cybersecurity is critical and among the IT spending priorities of organizations. In response, the literature draws attention to the cybersecurity critical success factors (CSFs) that enable organizations to focus their scarce resources accordingly. Following a systematic literature review method, we analyze and synthesize extant CSF studies on cybersecurity implementation and management for organizations. Then, drawing on the synthesized CSFs and blending them with IT capability theory, we present an overarching cybersecurity CSF framework building upon 79 cybersecurity elements grouped into 11 CSFs under five dimensions of cybersecurity capability: organizational, infrastructural, strategic, process, and external. In addition, the descriptive analysis of the search results reveals the importance of the various factors and capabilities, the trend of the cybersecurity capability dimensions, the frequency and types of research methods, and the contextual impact of the factors. This research makes an important contribution to the literature on cybersecurity management. The CSF framework serves as the foundation for future researchers interested in measuring organizational cybersecurity success. In addition, practitioners can employ the synthesized CSFs and associated elements to guide their cybersecurity management.
... Resilience also can level up the firm's current operations. Resilience is termed as a dynamic capability and dynamic capability that can enhance the performance by enabling the firm to change and respond to the forthcoming environmental changes (Eisenhardt and Martin 2000). When a firm suffers from disruptions and damages in supply chains, this will also negatively affect the SC performance, leading to lost sales and loss of goodwill (Mandal and Sarathy 2018). ...
Article
The purpose of the study lies in explaining and measuring Supply Chain relationships and their effect on supply chain resilience and supply chain performance in retail/service organizations. The study is also empirically explaining relationships while employing commitment–trust theory. The empirical research uses 144 responses, which were collected through the use of survey methods from retail firms. The questionnaire was adapted from various published sources. Purposive sampling was used as the technique for data collection. Hypotheses were analyzed by using structural equation modeling. The findings indicate that supply chain relationships significantly influence supply chain performance. SC agility was found as the significant enabler for Resilience. Cooperation plays a vital role in enhancing agility, resilience, and SC performance. Resilience shows the insignificant impact on the performance of supply chain and integration share insignificant effect on cooperation. Retail supply chain managers need to create a transparent atmosphere where all the supply chain partners can exchange formal and informal messages and provide opportunities through such platforms that enable them to share risk management-related expertise and strengthen their productive relationships. Organizations should promote relationships for the long-lasting continuity of their operations. The research is unique for its findings and its contribution toward the supply chain resilience as well as risk management domain and also for contributing in the retail sector as it is one of the first empirical studies to evaluate the relational exchanges and risk management from the perspective of retailers in a developing nation. The study also tries to meet meaningful gaps in existent literature.
... However, sustainability is doubted. The assumption that resources are static is critiqued in most of the relevant literature [21]. The approach contains some limits for highly dynamic environments. ...
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Industry 4.0 technologies and technological concepts can be considered as a starting point to strengthen the long-term competitiveness of modern enterprises. In this context, only a handful of recent studies consider the importance of professional Industry 4.0-driven servitization and, therefore, investigate the causal relationship between servitization and company performance. This paper aims to preliminary scrutinize a set of influencing factors that are required to build organizational competence in servitization. Based on the theories of market-based view (MBV), the resource-based view (RBV), and theories on dynamic capabilities (DC), the authors introduce the constructs of digitization and ICT and networks and relationships as success factors for the company´s competence in servitization. Moreover, the proposed conceptual model serves as a foundation for further multivariate analyses in the empirical environment of the plant engineering business.
Thesis
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The present thesis aims at studding the articulation between the competitive intelligence and the agility within an Algerian company. Even though competitive intelligence and agility share many factors such as foundations, goals, informational resources, and deal with the same competitive environment, few of researches and scientific studies addressed the relation between the two concepts. . Hence, the present research tries to answer the following question: How does competitive intelligence contribute to the enterprise agility? Our research is interpretivist and exploratory. Therefore, the qualitative approach has been adopted through a longitudinal study of a single case (Alliance Assurances). Data analysis has been conducted first using the (Dumez, 2011) template, then through the conceptualizing categories of (Paillé et Mucchielli, 2016). The concluded results confirmed the existence of a kind of cycle between competitive intelligence practices within thecompany and its agility as a posture; thereafter we proposed a theoretical model grouping together the different conceptualizing categories, describing the articulation between the various competitive intelligence practices and their articulation with the agility of the company. While the single case limits the external validity of the research, the present thesis proposes an adapted conceptual entities to the Algerian economic and competitive context that mangers can use to achieve the agility through competitive intelligence practices. Key words: competitive intelligence, enterprise agility, articulation, conceptualizing categories, template.
Article
Hospitals are under tremendous pressure to improve multiple performance dimensions that may be at odds, including cost containment, clinical quality, and patient satisfaction. The need to improve performance on multiple fronts is compounded by sources of uncertainty that include upstream diversity of supply chain (SC) partners, internal diversity of clinical specialties provided, and downstream diversity of patient conditions. Information processing theory (IPT) suggests two strategies for dealing with uncertainty: reduce the amount of information elevated to higher levels for processing and accommodate the amount of information by increasing information processing at other levels. We apply IPT to investigate (i) the relationship between the two information processing strategies in a hospital's SC and its cost containment, clinical quality, and patient satisfaction performance, and (ii) how these relationships may be moderated by diversity in the hospital's SC partners, clinical specialties, and patients, the common sources of uncertainty in hospital SCs. These questions were examined using regression analysis of primary data from acute care hospitals matched with secondary data from the Centers for Medicare and Medicaid Services, American Hospital Association and the Agency for Healthcare Research and Quality measuring hospital operating characteristics and performance. The analysis yielded several important findings: (i) while a slack resources strategy (uncertainty reduction) is effective for improving patient satisfaction performance, it is ineffective for reducing cost, (ii) a lateral relations strategy (uncertainty accommodation) is effective in improving all three performance dimensions, and (iii) these relationships are moderated differentially by the three diversity dimensions only for lateral relations. These findings offer important managerial insights about hospitals’ efforts to improve potentially conflicting performance outcomes and suggest interesting opportunities for future research applying IPT to this important topic.
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The Nigerian foods and beverages manufacturing industry is a major driver of the economy and dynamic capabilities are Tma jor resources that contain competition. However, the high level of competition, constant changes in customer taste and preferences, and brand consciousness of consumers have endangered the survival and growth of many of the firms in the industry. The study thus evaluated the relationship between dynamic capabilities and firm performance of selected quoted foods and beverages manufacturing companies in Lagos State, Nigeria. The study adopted a survey research design. The population was 692 middle and top level managers of the quoted firms. Total enumeration method was adopted. A questionnaire was adapted and validated for the study. The Cronbach's Alpha coefficients for the constructs ranged between 0.81 and 0.96. The response rate was 92.9% out of 692 copies of the questionnaire administered. The data were analyzed using descriptive and inferential (Pearson Product Moment correlation) statistics. Findings revealed that there is a significant relationship between product innovation capability and sales growth (r = 0.790; p<0.05) and a significant relationship exist between strategic flexibility and competitive advantage (r = 0.769; p<0.05). The study concluded that dynamic capabilities had a strong positive relationship with the performance of the food and beverages manufacturing companies in Lagos State, Nigeria. The adoption of dynamic capabilities is critical for the manufacturing companies. It sustains and enables them survive and grow consistently in the midst of intense competition. The study recommended that manufacturing firms need to monitor closely the level of competition in their industry in order to maintain their market share. For firms to consistently sustain their competitive advantage, they need to adopt the identified components of dynamic capabilities.
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The food and beverages manufacturing industry is one of the major drivers of the Nigerian economy and technological capability is an indispensable strategic resource that propels competition. However, volatile competition, shorter product life cycles of technology, rapidly changing customer preference, and technological advancement have threatened the efficiency of the majority of firms in the industry. The study thus evaluated the effect of technological capability on the firm efficiency of selected quoted food and beverages manufacturing companies in Lagos State, Nigeria. The study adopted a survey research design. The population was 692 middle and top level managers of the quoted firms. Total enumeration method was adopted. A questionnaire was adapted and validated for the study. The Cronbach's alpha coefficient for the construct is between 0.815 and 0.968. The response rate was 92.9% out of 692 copies of the questionnaire administered. The data was analyzed using linear regression analysis Findings revealed technological capability had significant effect on firm 2 efficiency (= 0.708; F = 239.537; r = .522; R = 0.272; p <0.05). The (1, 640) study concluded that technological capability had a significant effect on firm efficiency of the selected quoted food and beverages manufacturing companies in Lagos State, Nigeria. The adoption of technological capability is critical for the efficiency of manufacturing companies. Establishment and adequate investment in research and development activities and adequate use of experts will help in constantly outperforming competitors. The study recommended that manufacturing firms need to monitor closely the level of competition in their industry in order to build a framework that will enable them survive in the constantly changing environment.
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This study aims to examine the commonalities of dynamic capabilities (DCs) across firms and identify their idiosyncratic practices within firms – an under‐researched area within the strategic management and related innovation management literature. Although the existing research has attempted to identify commonalities of DCs across firms, there is hardly any research on specific practices within firms identified under those commonalities. We address this critical research problem to understand how firms can develop and deploy idiosyncratic practices of DCs but also align such firm‐specific practices with common best practices of DCs across firms. Based on a mixed methods study, we first conceptualize and empirically examine the commonalities of DCs across firms using quantitative survey data from 113 UK high‐tech SMEs. This is followed by identifying specificities of developing and applying DCs within firms based on qualitative interview data from 20 UK high‐tech SMEs. Our findings reveal that the commonalities of DCs are manifested in two components: absorptive capability and transformative capability, and that these two capabilities are embedded in specific practices within firms. Therefore, this study contributes to the understanding of how DCs are developed and deployed in the specific context of firms but also aligned with ‘best practices’ of DCs across firms.
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This article examines the drivers and process of change in carbon controls within a New Zealand electricity utility, using a meta‐triangulation approach that employs three theoretical perspectives (transactional cost economics, the resource‐based view and new institutional sociology). Results suggest three main objectives motivate carbon controls: cost control, competitiveness and legitimacy. Multiple environmental demands and expectations were met by focusing controls on a particular stakeholder group or objective. Further, the research identifies the conditions under which carbon controls are integrated and institutionalised within an organisational management control system. The theoretical interplay provides insight into inter‐relationships between institutional environments, organisational resources and carbon transactional characteristics.
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While numerous models examine the linkages between improvisation and innovation, the factors that moderate this relationship at the team level are unknown. Consequently, this study builds on principles and insights from the jazz jam session framework used by jazz musicians and regression analysis to examine the nature of the improvisation process and consider how it affects innovation. By using unbalanced panel data on 2,749 teams containing between two and eight employees in the United Kingdom during 2002–2016, this study demonstrates that the success of the improvisation process relies on both internal and external factors conducive to innovation. Subsequently, the conclusions drawn may help entrepreneurs and team managers think differently about the role improvisation plays in the innovation activity. As a result, important practical implications are drawn for team managers and entrepreneurs intending to cultivate a willingness to improvise in teams and nurture collaborative relationships with external partners for innovation.
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Strategy scholars view innovation through the lens of knowledge recombination, whereas organizational economics scholars view innovation through the lens of effective incentive design. This sets up a tension regarding how firms should structure their Research and Development (R&D) units. Namely, decentralization facilitates the effective use of incentives but comes with the cost of reduced intra‐organizational knowledge flows. In this study, I unpack this tension by examining the novelty of inventions that firms create and develop. I argue that R&D centralization facilitates the creation and development of inventions that are more novel, whereas R&D decentralization facilitates the creation of more inventions of lower average novelty and their progression through development. I find support for these arguments in the pharmaceutical industry between 1995 and 2015. When does the effective use of incentives or a firm’s knowledge have a greater impact on a firm’s innovation? This has important managerial implications as it shapes whether firms are better off centralizing or decentralizing their Research and Development (R&D) units. Centralization enables firms to make better use of their knowledge and decentralization ensures the better use of incentives. More effective use of incentives associated with greater decentralization of R&D is more critical if firms wish to create and develop more inventions that are of lower average novelty. In contrast, more effective use of a firm’s knowledge associated with greater centralization of R&D is more critical if firms want to create and develop a lower quantity of inventions that are of greater average novelty.
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A supply chain (SC) is seen as a source of competitive advantage, and SC innovation has become a critical research topic in business-to-business marketing and production. However, the main obstacle to empirical research on SC innovation is a lack of validated and well-developed scales to measure it. Therefore, developing a measurement scale for the SC innovation construct is necessary. This paper describes the development and validation of a third-order SC innovation scale based on the collection of primary quantitative and qualitative data. SC innovation was then operationalized as a multidimensional construct with three aspects, namely, marketing, technology development, and logistics-oriented innovation activities, resulting in 31 measurement items. The developed SC innovation scale applies to the textile and apparel industry primarily. Business-to-business marketers can apply this empirically validated scale to evaluate their SC innovation efforts and identify areas for improvement.
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The failure rate of fintech platforms is disproportionately high, which may be because (1) there is a lack of published knowledge on the appropriate strategies to adopt and/or (2) the traditional prescriptions for strategy may be less relevant in the context of fintech platforms. To ascertain either or both of these possibilities, we conducted a comprehensive review of the fintech literature and found that not only is there a relative paucity of research on Fintech Strategies, but there are also important limitations associated with the existing works. To address these limitations, we first identified the unique characteristics of fintech platforms and the strategic implications of those characteristics. Next, we adapted a framework made up of six conventional core logics of strategy and juxtaposed the prescriptions of those logics with the unique characteristics identified. Finally, we constructed a research agenda consisting of a number of open questions based on our analysis to provide directions for future research in this area. The agenda suggests that fintech platform strategies have to account for competing institutional logics stemming from the platforms' dual identity and the tensions between conforming for legitimacy and differentiating for competitive advantage. There is also a need to account for an exceptionally dynamic and unpredictable regulatory landscape, as well as the responses and competitive actions of influential market incumbents.
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Small and medium-sized enterprises (SMEs) are crucial for any national economy through their vital contribution to sustainable growth, economic development and employment. The digital revolution, globalization, and the latest impact and pressure caused by the Covid-19 pandemic have posed even greater barriers and challenges for these enterprises. In order for small and medium-sized enterprises to respond to the new challenges, to participate in the market and gain a competitive position, they need to be different, and this can only be accomplished through an innovative way of working. To foster innovation, strategic changes are needed in the operation of the SMEs, with a focus on the people involved, the ways and methods used in the organizational environment, and the desired innovation results. Connecting to the external environment (networking) and/or using an open innovation system are also fundamental to the success of the enterprise innovation process. Innovative capacity of the businesses is a function of the organization’s culture, resources and networks. The main purpose of this paper is to identify certain strategic factors that contribute to creating an innovative organizational environment and fostering innovation, i.e. increasing the innovation capacity of SMEs in Pelagonia region in North Macedonia.
Chapter
Combining Games and Agent-Based Models (ABMs) in a single research design (i.e. GAM design) shows potential for investigating complex past, present, or future social phenomena. Games offer engaging environments that can help generating insights into social dynamics, perceptions, and behaviours, while ABMs support the representation and analysis of complexity. We present here the first attempt to “discipline” the interdisciplinary endeavour of developing a GAM design in which an ABM is transformed into a game, thus the two becoming intertwined in one application. When doing this, we use as a GAM design exemplar the process of developing Quantum Leaper, a proof-of-concept video game made in Unity software and based on the NetLogo implementation of the well known “Artificial Anasazi” ABM. This study aims to consolidate the methodology component of the GAM field by proposing the GAM Reflection Framework, a tool that can be used by GAM practitioners, ABM modellers, or game designers looking for methodological guidance with developing an agent-based model that is a game (i.e. an agent-based game).
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Impact startups are innovative new ventures that diffuse solutions at scale that have a sustainability net benefit. They play an important role in the sustainability transition as actors for the introduction and diffusion of sustainability innovation. While the relevance of new entrants and young ventures has been acknowledged in sustainable entrepreneurship and transition research, it remains unclear how individual startups grow and successfully present their sustainability-oriented market innovations and transform markets towards sustainable development. Referring to this research gap, we concentrate on the subset of growth-oriented impact startups that substitute less sustainable practices through new technologies, products, or services and the factors that influence their growth and sustainability benefits. The paper makes three main contributions. First, we provide a conceptual framework for explaining how impact startups contribute to sustainability transition through growth. Second, we show how factors of startup growth and sustainability net benefits can be organized in a taxonomy. Third, based on a systematic literature review we provide an overview of current knowledge about empirically verified factors and enablers of startup growth and sustainability net benefits. By this we can show that there has been limited empirical research on external enablers for the growth of startups and that there is hardly empirical research that explains the sustainability contribution of startups.
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The growing concerns regarding sustainability and a firm's effects on the environment explain the important role that environmental management may play in corporate reputation. Following the premises of the stakeholder approach and dynamic capability theory, we explore how a comprehensive environmental management (environmental innovation [EI] and cleaner production [CP]) impacts a firm's reputation. By analyzing a panel data of European manufacturing firms, we show that EIs benefit corporate reputation. Results also confirm that the higher effectiveness of CP initiatives, the higher a firm's reputation. Both dynamic capabilities improve the firm's legitimacy and stakeholders' perceptions concerning the firm's commitment to environmental sustainability. We offer relevant insights for the academic community as to how EI and CP represent proactive strategies that enhance reputation and provide practical implications for managers in order to respond to stakeholders' demands.
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This study examines the strategies that firms deploy in developing and scaling up organizational ambidexterity under conditions of environmental uncertainty. Using five emerging market multinational enterprises (EMNEs) in the Nigerian financial sector as case studies the study provides a framework of four main ambidextrous strategies deployed by these firms. Based on the dynamic capabilities' lens, the study found that EMNEs pursue a combination of contextual and structural ambidextrous strategies, including new business models, investment in technology for strategic innovation, developing strategic alliances, and internationalization. These strategies serve as levers of dynamic capabilities for fostering exploration of new business opportunities, while strengthening, enriching, and exploiting their existing capabilities. These findings contribute to enriching the existing literature on ambidexterity by contributing to the ongoing debate about how ambidexterity manifest in EMNEs during periods of environmental uncertainty, particularly from an emerging country context.
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