From resource base to dynamic capabilities : an investigation of new firms

Despite the numerous observations that dynamic capabilities lie at the source of competitive advantage, we still have limited knowledge as to how access to firm-based resources and changes to these affect the development of dynamic capabilities. In this paper, we examine founder human capital, access to employee human capital, access to technological expertise, access to other specific expertise, and access to two types of tangible resources in a sample of new firms in Sweden. We empirically measure four dynamic capabilities and find that the nature and effect of resources employed in the development of these capabilities vary greatly. For the most part, there are positive effects stemming from access to particular resources. However, for some resources, such as access to employee human capital and access to financial capital, unexpected negative effects also appear. This study therefore provides statistical evidence as to the varying role of resources in capability development. Importantly, we also find that changes in resource bases have more influential roles in the development of dynamic capabilities than the resource stock variables that were measured at an earlier stage of firm development. This provides empirical support for the notion of treating the firm as a dynamic flow of resources as opposed to a static stock. This finding also highlights the importance of longitudinal designs in studies of dynamic capability development. Further recommendations for future empirical studies of dynamic capabilities are presented.

Dynamic capabilities and innovation in supply chains

Supply chain relationships between firms are increasingly important in terms of both competitiveness and developing dynamic capability to respond to rapid changes in the market. Innovation capacity both in firms and in supply chains is also integral to responding to dynamic markets and customer needs. This explorative research examines a sample of firms active in supply chain relationships in Australia, as a pilot study, to examine any linkages between firm dynamic capabilities and supply chains developing innovative capacity to meet competitive and market changes. Initial findings indicate that although firms focus on developing capabilities, particularly dynamic capabilities to innovate individually, these preliminary findings indicate little reliance on developing their supply chain innovation capacity. This study is the initial stage of more extensive research on this topic.

Towards a model of dynamic capabilities in innovation-based competitive strategy : insights from project-oriented service firms

With the growing significance of services in most developed economies, there is an increased interest in the role of service innovation in service firm competitive strategy. Despite growing literature on service innovation, it remains fragmented reflecting the need for a model that captures key antecedents driving the service innovation-based competitive advantage process. Building on extant literature and using thirteen in-depth interviews with CEOs of project-oriented service firms, this paper presents a model of innovation-based competitive advantage. The emergent model suggests that entrepreneurial service firms pursuing innovation carefully select and use dynamic capabilities that enable them to achieve greater innovation and sustained competitive advantage. Our findings indicate that firms purposefully use create, extend and modify processes to build and nurture key dynamic capabilities. The paper presents a set of theoretical propositions to guide future research. Implications for theory and practice are discussed. Finally, directions for future research are outlined.

Internet-enabled international entrepreneurship : a conceptual exploration of the link between a firm’s resource base, dynamic capabilities and international market performance

It has been suggested that the accumulation of valuable resources and capabilities, such as Internet application, is not enough to support a firm’s sustainable competitive advantage, especially for high technology-mediated firms; which often operate in fast changing dynamic environments. While the idea of ‘Internet-enabled resources and capabilities’ has been recognised by RBV theorists, the notion has largely been ignored in conceptual and empirical studies. Given this finding, a conceptual framework is constructed and research issues are then developed in order to focus attention on the relationship between, the Internet and a firm’s resource base, dynamic capabilities and international market performance. We postulate that successful Internet-enabled market performance arises from those international entrepreneurial-oriented firms which encompass: international vision, international business experience, Internet-international marketing capabilities and international networking capabilities. Recommendations for future theory development are presented, along with the implications for international entrepreneurial managers in Australian small and medium sized firms

Strategic Management Practices in the Construction Industry : a Dynamic Capabilities View

This book is an empirical study of strategic management practices in the construction industry. It examines the dynamic capabilities paradigm within the context of the Indonesian construction industry. The characteristics of asset-capability combinations were found to be significant determinants of the competitive advantage of the Indonesian construction enterprises, and that such advantage sequentially contributes to organizational performance. In doing so, this study fills an important gap in the empirical literature and reinforces the dynamic capabilities framework’s recognition as a rigorous theory of strategic management. As the dynamic capabilities framework can work in the context of Indonesia, it suggests that the framework has potential applicability in other emerging and developing countries

Dynamic capabilities and performance : strategy, structure and environment

Dynamic capabilities are widely considered to incorporate those processes that enable organizations to sustain superior performance over time. In this paper, we argue theoretically and demonstrate empirically that these effects are contingent on organizational structure and the competitive intensity in the market. Results from partial least square structural equation modeling (PLS-SEM) analyses indicate that organic organizational structures facilitate the impact of dynamic capabilities on organizational performance. Furthermore, we find that the performance effects of dynamic capabilities are contingent on the competitive intensity faced by firms. Our findings demonstrate the performance effects of internal alignment between organizational structure and dynamic capabilities, as well as the external fit of dynamic capabilities with competitive intensity. We outline the advantages of PLS-SEM for modeling latent constructs, such as dynamic capabilities, and conclude with managerial implications.

Building project competence : developing dynamic capabilities with knowledge governance mechanisms

This research investigates the development of project competence, and particularly, three related dynamic capabilities (shifting, adapting, leveraging) that contribute to project competence development. In doing so, we make use of the emerging literature on knowledge governance and theorize how knowledge governance mechanisms can move the organization towards desired knowledge-based goals. A multiple-case study comprising 23 cases advances our understanding of the elements that trigger, enable, hamper, and drive shifting, leveraging and adapting. Finally, the paper offers a tentative framework of dynamic capability building promoting project competence development.

The role of the market sub-system and the socio-technical sub-system in innovation and firm performance : a dynamic capabilities approach

Organizational learning has been studied as a key factor in firm performance and internationalization. Moving beyond the past emphasis on market learning, we develop a more complete explanation of learning, its relationship to innovation, and their joint effect on early internationalization. We theorize that, driven by the founders’ international vision, early internationalizing firms employ a dual subsystem of dynamic capabilities: a market subsystem consisting of market-focused learning capability and marketing capability, and a socio-technical subsystem comprised of network learning capability and internally focused learning capability. We argue that innovation mediates the proposed relationship between the dynamic capability structure and early internationalization. We conduct case studies to develop the conceptual framework and test it in a field survey of early internationalizing firms from Australia and the United States. Our findings indicate a complex interplay of capabilities driving innovation and early internationalization. We provide theoretical and practical implications and offer insights for future research.

Dynamic capabilities and performance : an empirical study of audiovisual producers in Europe

This study tests Teece’s conceptualization of dynamic capabilities in the context of small and medium sized firms competing in creative industries, i.e. the European audio-visual production industry. This industry is characterized by immature and evolving markets where firms’ dynamic capabilities are expected to lead to superior innovative performance. Using survey data from audio-visual producers in ten European countries we find that both sensing and seizing capabilities have a positive effect on firms' innovative performance. The effect however, is curvilinear and positive effects appear only when capabilities overcome a threshold level.

Small and medium enterprises sourcing software as a service – a dynamic perspective on IS capabilities

Software as a Service (SaaS) is a promising approach for Small and Medium Enterprises (SMEs) firms, in particular those that are focused on growing fast and leveraging new technology, due to the potential benefits arising from its inherent scalability, reduced total cost of ownership and the ease of access to global innovations. This paper proposes a dynamic perspective on IS capabilities to understand and explain SMEs sourcing and levering SaaS. The model is derived from combining the IS capabilities of Feeny and Willcocks (1998) and the dynamic capabilities of Teece (2007) and contextualizing it for SMEs and SaaS. We conclude that SMEs sourcing and leveraging SaaS require leadership, business systems thinking and informed buying for sensing and seizing SaaS opportunities and require leadership and vendor development for transforming in terms of aligning and realigning specific tangible and intangible assets.

Developing sustainable IT-related capabilities : instrument development and test

Research has established that firms' IT-related capabilities at a point in time explain IT-related performance differences across firms. IT resources, however, are dynamic, and evolve at an exponential rate. This means we need to understand how to sustain firms' existing capabilities to leverage opportunities offered by new IT resources. Wet suggests a higher-level resource that can sustain firms' existing IT-related capabilities. Second, we report on the development of a valid and reliable measurement instrument for measuring this higher-level resource in four stages, which includes expert feedback and a field test. The validated instrument would be useful in extending the IT business value studies to investigate how firms can sustain their IT-related capabilities. This effort will provide a deeper understanding of how firms can secure sustainable IT-related business value from their acquired IT resources.

International entrepreneurship for SME business growth : a resource and dynamic capability view of the firm : an internet context

This research explores the relationship between international business Internet capabilities and international entrepreneurial characteristics. It has been suggested, that the accumulation of a firms Internet capability can assist international operations, especially when operating in fast changing dynamic environments. However, the international entrepreneurial characteristics which are seen as a precursor to leveraging such capabilities are still vague. Given this finding a conceptual framework is constructed and research issues are then developed in order to focus attention on the relationship between the Internet and a firm’s resource base, dynamic capabilities and international market performance.

Towards a Dynamic IS Function

With the growing importance of IS for organizations and the continuous stream of new IT developments, the IS function in organizations becomes more critical but is also more challenged. For example, how should the IS function deal with the consumerization of IT or what is the added value of the IS function when it comes to SaaS and the Cloud? In this paper we argue that IS research is in need of a dynamic perspective on the IS function. The IS function has to become more focused on building and adapting IS capabilities in a changing environment. We discuss that there has been an overreliance on the Resource Based View so far for understanding the IS function and capabilities and introduce Dynamic Capabilities Theory as an additional theoretical perspective, which has only been limitedly addressed in IS literature yet. We present a first conceptualization of the dynamic IS function and discuss IS capabilities frameworks and individual IS capabilities from a dynamic perspective. These initial insights demonstrate the contribution of a dynamic perspective on the IS function itself.

The impact of construction organisations’ learning capabilities on collaborative projects

Dynamic capability theory asserts that the learning capabilities of construction organisations influence the degree to which value-for-money (VfM) is achieved on collaborative projects. However, there has been little study conducted to verify this relationship. The evidence is particularly limited within the empirical context of infrastructure delivery in Australia. Primarily drawing on the theoretical perspectives of the resource-based view of the firm (e.g. Barney 1991), dynamic capabilities (e.g. Helfat et al. 2007), absorptive capacity (e.g. Lane et al. 2006) and knowledge management (e.g. Nonaka 1994), this paper conceptualises learning capability as a knowledge-based dynamic capability. Learning capability builds on the micro-foundations of high-order learning routines, which are deliberately developed by construction organisations for managing collaborative projects. Based on this conceptualisation of learning capability, an exploratory case study was conducted. The study investigated the operational and higher-order learning routines adopted by a project alliance team to successfully achieve VfM. The case study demonstrated that the learning routines of the alliance project were developed and modified by the continual joint learning activities of participant organisations. Project-level learning routines were found to significantly influence the development of organisational-level learning routines. In turn, the learning outcomes generated from the alliance project appeared to significantly influence the development of project management routines and contractual arrangements applied by the participant organisations in subsequent collaborative projects. The case study findings imply that the higher-order learning routines that underpin the learning capability of construction organisations have the potential to influence the VfM achieved on both current and future collaborative projects.

Beyond normal competencies : understanding organisation designs to develop and sustain IT-related capabilities

It is apparent that IT resources are important for organisations. It is also clear that organisations unique competencies, their IT-related capabilities, leverage the IT resources uniquely to create and sustain competitive advantage. However, IT resources are dynamic, and evolve at an exponential rate. This means that organisations will need to sustain their competencies to leverage opportunities offered by new IT resources. Research on ways to sustain IT-related capabilities is limited and a deeper understanding of this situation is important. Amongst other factors, a possible reason for this lack of progress in this area could be due to the lack of validated measurement items of the theoretical constructs to conduct such studies. We suggest an environment in which organisations could build new and sustain their existing IT-related capabilities. We then report on the development of valid and reliable measures for this environment. The validated measures would be useful in extending our understanding on how firms could sustain their IT-related capabilities. This effort will provide a deeper understanding of how firms can secure sustainable IT-related business value from their acquired IT resources.