Building dynamic capabilities of adaptation and innovation: a study of micro-foundations in a transition economy

What are the microfoundations of dynamic capabilities that sustain competitive advantage in a highly volatile environment, such as a transition economy? We explore the detailed nature of these dynamic capabilities along with their antecedents by tracing the sequence of their development based on a longitudinal case study of an organization subject to an external context of radical transition — the Russian oil company, Yukos. Our rich qualitative data indicate two distinct types of dynamic capabilities that are pivotal for organizational transformation. Adaptation dynamic capabilities relate to routines of resource exploitation and deployment, which are supported by acquisition, internalization and dissemination of extant knowledge, as well as resource reconfiguration, divestment and integration. Innovation dynamic capabilities relate to the creation of completely new capabilities via exploration and path-creation processes, which are supported by search, experimentation and risk taking, as well as project selection, funding and implementation. Second, we find that sequencing the two types of dynamic capabilities, helped the organization both to secure short-term competitive advantage, and to create the basis for long-term competitive advantage. These dynamic capability constructs advance theoretical understanding of what dynamic capabilities are, whilst their sequencing explains how firms create, leverage and enhance them over time.

Changing HRM systems in two Russian oil companies: Western hegemony or Russian spetsifika?

We contrast attempts to introduce what were seen as sophisticated Western-style human resource management (HRM) systems into two Russian oil companies – a joint venture with a Western multinational corporation (TNK-BP) and a wholly Russian-owned company (Yukos). The drivers for Western hegemony within the joint venture, heavily influenced by expatriates and the established HRM processes introduced by the Western parent, were counteracted to a significant degree by the Russian spetsifika – the peculiarly Russian way of thinking and doing things. In contrast, developments were absorbed faster in the more authoritarian Russian-owned company. The research adds to the theoretical debate about international knowledge transfer and provides detailed empirical data to support our understanding of the effect of both organizational and cultural context on the knowledge-transfer mechanisms of local and multinational companies. As the analysis is based on the perspective of senior local nationals, we also address a relatively under-researched area in the international HRM literature which mostly relies on empirical data collected from expatriates and those based solely in multinational headquarters.