Business leaders’ views on the importance of strategic and dynamic capabilities for successful financial and non-financial business performance

2015 ◽  
Vol 64 (7) ◽  
pp. 908-931 ◽  
Author(s):  
Alan Simon ◽  
Chloe Bartle ◽  
Gary Stockport ◽  
Brett Smith ◽  
Jane E. Klobas ◽  
...  
Keyword(s):  
Business Performance ◽  
Dynamic Capabilities ◽  
Business Success ◽  
Organisational Performance ◽  
Content Type ◽  
Financial Measures ◽  
Big Picture ◽  
Strategic Capabilities ◽  
And Performance ◽  
The Relationship

Purpose – The purpose of this paper is to report on research that identifies the relationships that senior managers believe exist between capabilities and business success. In doing so, it addresses the need for more empirical research about the role of strategic and dynamic capabilities in organisational performance. It also highlights the critical strategic and dynamic capabilities that are most valuable for practising managers. Design/methodology/approach – A multi-method study was conducted. Eight types of strategic capability and ten types of dynamic capability commonly found in organisations were identified through consecutive literature review, web site content analysis and interviews with senior executives. A questionnaire survey was then used to ask senior officers of publicly listed Australian firms about the importance of each capability and financial and non-financial performance indicators. The relationship between capabilities and performance was measured by regression modelling. Findings – Good leadership with an innovative vision and selection and retention of good staff and developing their skills and capabilities were the stand out strategic capabilities. Strategic thinking about the big picture and the long-term and flexible leaders who can lead and manage adaptation to change were considered to be the most important dynamic capabilities. Strategic capabilities were more often associated with indicators of financial success, and dynamic capabilities were more often associated with non-financial measures of organisational performance. Originality/value – This is the first study to make a distinction between strategic and dynamic capabilities in examining the relationship between capabilities and business success. The results demonstrate that the distinction has both theoretical and practical value.

Dynamic capabilities and competitive advantages as mediator variables between market orientation and business performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ricardo Jorge Correia ◽  
José G. Dias ◽  
Mário Sérgio Teixeira
Keyword(s):  
Market Orientation ◽  
Structural Equation ◽  
Business Performance ◽  
Dynamic Capabilities ◽  
Causal Link ◽  
Equation Model ◽  
Competitive Advantages ◽  
Content Type ◽  
And Performance ◽  
The Relationship

PurposeThis paper aims to explore a new causal link between market orientation and business performance by introducing dynamic capabilities as a mediator of the relationship between market orientation and competitive advantages, which ultimately determine business performance.Design/methodology/approachThe mediating roles of dynamic capabilities and competitive advantages are tested with a sample of 1,190 Portuguese firms using a structural equation model.FindingsThe results confirm the hypotheses regarding the mediating roles of the competitive advantages (differentiation and cost leadership) in the relationship between dynamic capabilities and business performance. Additionally, dynamic capabilities also mediate the relationship between market orientation and competitive advantages.Practical implicationsThis study shows that business performance depends on the capacity of firms to collect the best market information on customers and competitors, to disseminate this information throughout their internal structure and ultimately optimize its use to respond appropriately to market challenges and trends. These will provide firms with a set of capabilities and a competitive advantage.Originality/valueThis study provides empirical evidence on the understanding of the relationship between market orientation and performance, through the mediating effects of both dynamic capabilities and competitive advantages.

scholarly journals The Holy Grail

2015 ◽  
Vol 27 (5) ◽  
pp. 714-738 ◽  
Author(s):  
Jorge Pereira-Moliner ◽  
Xavier Font ◽  
Juan José Tarí ◽  
Jose F. Molina-Azorin ◽  
Maria D. Lopez-Gamero ◽  
...  
Keyword(s):  
Environmental Management ◽  
Business Performance ◽  
Competitive Advantages ◽  
Performance Levels ◽  
Content Type ◽  
Reference Measure ◽  
Environmental Capability ◽  
And Performance ◽  
Hotel Managers ◽  
The Relationship

Purpose – This paper aims to analyse the influence of environmental proactivity on cost and differentiation competitive advantages, and to explore the double relationship between environmental proactivity and business performance. Design/methodology/approach – The population consists of all three- to five-star hotels in Spain. A sample of 350 hotels was classified according to environmental proactivity and performance levels, employing a two-step cluster analysis. Significant differences between groups were examined. Findings – The results show two types of environmental behaviour (reactive and proactive), with proactive hotels developing significantly better on both cost and differentiation competitive advantage and achieving significantly higher performance levels. Hotels which achieve above average business performance levels are significantly more environmentally proactive. Research limitations/implications – The present paper demonstrates that environmental management is related to competitive advantages and business performance. Environmental management systems are more developed in higher category, chain-affiliated and larger hotels. This could be due to having more resources to develop their environmental capability. The environmental proactivity scale employed in this study is presented as a reference measure for hotel managers to benchmark their current practices and implement environmental improvements. Originality/value – First, measuring environmental proactivity using four managerial systems (operative, information, strategic and technical) is innovative and provides a more detailed approach to measuring environmental proactivity. Second, demonstrating a double association between environmental proactivity and performance provides fresh insights into the relationship between these variables.

Lean manufacturing practices and performance: the role of social and technical factors

2019 ◽  
Vol 37 (5) ◽  
pp. 732-754 ◽  
Author(s):  
Saumyaranjan Sahoo
Keyword(s):  
Lean Manufacturing ◽  
Business Performance ◽  
Manufacturing Systems ◽  
Equation Modeling ◽  
Performance Parameters ◽  
Content Type ◽  
Lean Practices ◽  
The Social ◽  
And Performance ◽  
The Relationship

Purpose Modern manufacturing systems require tools and techniques that take cognizance of the social (concerning people and relations) as well as the technical environment. The purpose of this paper is to explore the relationship between the social and technical aspects of lean manufacturing practices and their effects on business performance outcomes. Design/methodology/approach The hypothesized relationships for this study are tested with data collected from 148 Indian manufacturing firms by using SPSS and AMOS statistical software. Findings The analysis of the study was conducted using structural equation modeling (SEM) technique, which indicated that both “soft” and “hard” lean practices are positively related to business performance parameters. The findings also demonstrated that “hard” lean practices fully mediate the relationship between “soft” lean practices and business performance parameters. Research limitations/implications There are some limitations of this study. Although a cross-sectional survey has been applied, the research does not permit us to account for the lag between implementation and performance. It also brings the opinion of a limited number of Indian experts about lean manufacturing systems; hence, the sample size could be increased and the nationality of the respondent could be expanded for future research. Practical implications The paper would be of interest to Lean practitioners, and the results of this study can be used in organizations to put a focus on social-cultural changes while applying lean technical tools when it comes to practices as well as importance. Originality/value This paper extends theoretical contribution in production and operations management literature, highlighting how social and technical practices have to interact to enable a successful lean manufacturing implementation.

Organizational capability for change and performance in artisanal businesses in Mexico

2020 ◽  
Vol 33 (2) ◽  
pp. 415-431
Author(s):  
Patricia S. Sánchez-Medina
Keyword(s):  
Environmental Performance ◽  
Design Methodology ◽  
Dynamic Capabilities ◽  
Organizational Changes ◽  
Organizational Capability ◽  
Content Type ◽  
Face To Face ◽  
And Performance ◽  
Performance Results ◽  
The Relationship

PurposeBusinesses in Mexico, particularly small and mid-sized companies, are faced with numerous challenges: a lack of competition, difficulty in positioning and maintaining oneself in the market, irrational use of natural resources, and poverty in the environment in which they develop. In spite of these problems, many are able to succeed; however, there is limited knowledge about how these businesses could implement organizational changes that would positively impact their results.Design/methodology/approachUsing dynamic capabilities theory and survey data obtained from pottery businesses in several artisan communities in Mexico through the application of face-to-face interviews, this paper analyzes the relationship between organizational capability for change (OCC) and economic and environmental performance.FindingsThis research proves that OCC positively and significantly impacts economic and environmental performance. Results contribute to the existing literature on OCC in the context of poverty.Originality/valueThis study offers empirical research that illustrates the relationship between OCC and the environmental and economic performance of pottery businesses. Additionally it contributes to a field of knowledge in progress; that is, OCC in contexts of subsistence where poverty is a constant issue. Artisans living in this context can also develop business capabilities that contribute to the permanence of their business in the market.

Intellectual capital and firm performance in the global agribusiness industry

2016 ◽  
Vol 17 (3) ◽  
pp. 530-552 ◽  
Author(s):  
Vincenzo Scafarto ◽  
Federica Ricci ◽  
Francesco Scafarto
Keyword(s):  
Intellectual Capital ◽  
Business Performance ◽  
Performance Metrics ◽  
Positive Impact ◽  
Content Type ◽  
Performance Counter ◽  
Knowledge Intensive ◽  
And Performance ◽  
Performance Results ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the relationship between intellectual capital (IC), categorized in terms of four sub-constructs – namely, human capital (HC), relational capital (RC), innovation capital (InnC) and process capital (PrC) – and business performance in the agribusiness industry. Design/methodology/approach – Based on a sample of international agribusiness companies observed over a five-year period, this paper uses correlation and multiple regression analysis to test for the existence of a positive relationship between each IC component and conventional business performance metrics. Findings – The empirical results support the hypotheses that RC and PrC have a positive impact on corporate performance. Counter to the expectations, InnC by itself is negatively associated with performance. Results also failed to confirm the hypothesis that HC directly and positively affects performance. However HC positively moderates the relation between InnC and performance, which suggests that firms that heavily invest in HC are better placed to gain returns from their research and development (R & D) investments. Originality/value – This study expands the existing research on the link between IC and performance by adding fresh evidence from a highly knowledge-intensive sector which has been under-researched thus far. It may also contribute to the specific literature on R & D and performance as it uncovers that the value-generating effect associated with R & D investments is contingent on the levels of HC.

scholarly journals TQM and business success

2016 ◽  
Vol 33 (3) ◽  
pp. 361-379 ◽  
Author(s):  
Francisco J. Carmona-Márquez ◽  
Antonio G. Leal-Millán ◽  
Adolfo E. Vázquez-Sánchez ◽  
Antonio L. Leal-Rodríguez ◽  
Stephen Eldridge
Keyword(s):  
Continuous Improvement ◽  
Business Performance ◽  
Performance Outcomes ◽  
Equation Modeling ◽  
Business Success ◽  
Content Type ◽  
Business Results ◽  
And Performance ◽  
Practical Implications

Purpose – Prior studies by Salaheldin (2009) and Talib et al. (2011) have assessed the relationships between TQM critical success factors (CSF) and business results. The purpose of this paper is to build upon this research by considering the relationships between these CSFs and their sequencing during the implementation of TQM. Furthermore, the influence exerted by the maturity of TQM implementation on the link between instrumental drivers and performance is explored. Design/methodology/approach – The TQM drivers are clustered by means of three constructs: strategic enablers, tactical drivers and instrumental drivers and a model employed in which the strategic and tactical factors are treated as antecedents of the instrumental drivers. The direct effect of each cluster on business results and the indirect relationship of strategic and tactical factors via the mediating role of the instrumental drivers are assessed. These assessments use the partial least squares (PLS) approach which is a variance-based structural equation modeling technique using a sample of 113 Spanish organizations with experience of implementing a TQM program. Findings – The findings confirm the existing relationships among the CSFs and business performance identified by studies Salaheldin (2009) and Talib et al. (2011). However, the results reveal that instrumental drivers possess the highest variance explanation power over business performance outcomes and it is possible to identify a CSF implementation sequence that generates the greatest impact on business performance. Furthermore, the study was inconclusive with regard to the influence exerted by the number of years of TQM implementation on the link between the instrumental drivers and performance. Research limitations/implications – The first is related to organizational bias. It seems likely that those firms which are not satisfied with their TQM system performance would be less likely to be motivated to contribute to the development of this study. Therefore, the authors have included in the sample a higher proportion of “good” systems than is the case in the population at large. Second, although the authors provide evidence of causality, causality itself has not been proven. Third, this research relies mainly on perceptions and the authors only used a single method to elicit these perceptions. Finally, this research was carried out in a specific geographical setting (Spanish companies) and the authors must be cautious about generalizing these results in other contexts. Practical implications – This study offers a substantial number of practical implications. First firms’ managers should emphasize that continuous improvement, benchmarking and zero-defects mentality is a never-ending process. Especially, they should understand that reliable product/service design is critical to exceed the customers’ expectations, leading to improved business success. The results of this study should also lead managers to seeing a “return on investment” in their efforts to implement a TQM program by first, paying more attention on how to implement the instrumental factors, and second, avoiding the belief that the passage of time and experience-based learning will bring business performance enhancement and success on their own. Social implications – Although, the literature agrees that strategic factors are valuable assets and have a crucial role in the deployment of TQM systems, the study empirically validates this assertion. However, at the same time it shows that this impact on performance is stronger and much more significant by reconfiguring instrumental factors. This implies that strategic and tactical factors do have an effect on business success, but they do so indirectly, by reconfiguring and reinforcing instrumental factors that better fit the stakeholders’ needs and expectations. Originality/value – The results suggest the need to consider whether all the CSFs are equally relevant on the basis of their contribution to business success. For example, strategic enablers are generally considered to be of primary importance with tactical and instrumental drivers assuming a secondary position. The study challenges this view and highlights the role of instrumental drivers over strategic and tactical factors with the clear implication that managers should focus strongly on daily implementation tasks such as benchmarking, zero-defects mentality and continuous improvement processes in order to achieve good business performance outcomes.

scholarly journals Asset specificity in make or buy decisions for service operations

2008 ◽  
Vol 19 (1) ◽  
pp. 111-133 ◽  
Author(s):  
Tomás F. Espino‐Rodríguez ◽  
Pei‐Chun Lai ◽  
Tom Baum
Keyword(s):  
Financial Performance ◽  
Business Performance ◽  
Service Sector ◽  
Service Operations ◽  
Asset Specificity ◽  
Operation Performance ◽  
Content Type ◽  
Hotel Sector ◽  
And Performance ◽  
The Relationship

PurposeThis work analyses make or buy decisions from the transaction cost economics perspective and the resource‐based view of the firm. The aim is to analyse the extent to which the presumptions of the two theories are valid in the service sector in terms of specific assets.Design/methodology/approachThe study was conducted on a representative sample of hotels in Scotland, UK. Each of the surveyed hotels was asked for information about 13 operations or hotel processes. A comprehensive model is developed that establishes the relationship between asset specificity and operation performance and hotel or business performance, moderated by the form of governance (make or buy). Moreover, the relationship between asset specificity and outsourcing in the hotel sector is also examined. The different hotel processes are classified according to the asset specificity. The factors that could lead to an increase in the outsourcing strategy are also analysed.FindingsThe results indicate that, the relationship between asset specificity and operation performance is weaker when the operations are executed in‐house. In the case of the relationship between specific assets and performance, the findings regarding non‐financial performance are not contradictory since it is slightly higher when the operation is outsourced. The factors determining an increase in outsourcing would be those related to the quality of the operation and to non‐financial performance.Research limitations/implicationsPrevious studies have not considered the relationship between specificity and business performance, which gives extra incentive to complement and expand the literature on service operations. Future research should analyze other theories on organisations and outsourcing. The findings should also be tested in other geographical regions and use sources of information other than the hotel managers.Practical implicationsThe work generates knowledge and aids managers in their “make or buy” decisions for the principal processes in the hotel industry according to the asset specificity.Originality/valueThe paper develops a specificity‐outsourcing matrix and identifies each of the hotel operations. Apart from testing the model in the hotel sector, which is an important sector of the service industry, the work offers a better understanding of outsourcing decisions based on the two basic theories used in the literature on services management. The paper also makes an innovative contribution by analysing relationships between operation specificity and performance that are previously untested in the service sector.

Social media adoption and business performance: the mediating role of organizational learning capability (OLC)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Luqman Oyekunle Oyewobi ◽  
Olatunde Folaranmi Adedayo ◽  
Seth Olufemi Olorunyomi ◽  
Richard Jimoh
Keyword(s):  
Social Media ◽  
Business Performance ◽  
Learning Capability ◽  
Content Type ◽  
Learning Capacity ◽  
Mediating Role ◽  
And Performance ◽  
Use Of Social Media ◽  
The Relationship

Purpose The purpose of this paper is to explore the mediating effect of learning capacity in the relationship between the social media usage by the construction of small- and medium-sized enterprises (SMEs) and their business performance in Nigeria. Design/methodology/approach A quantitative survey technique was used to collect data from the owner/manager of construction SMEs in Nigeria. The partial least square structural equation modeling was used in the assessment of the measurement model and structural model to assess the validity and reliability of the measures and to evaluate the hypotheses proposed in the conceptual model. Findings Empirical findings indicated a significant positive relationship between learning capacity and performance of SMEs. Similarly, the use of social media is significantly and positively associated to the business performance of SMEs. It has also been shown that learning capacity is a mediator of the relationship between social media and SME performance. Research limitations/implications The data for the study is are all from a single industry and a related line of business, so it could be more interesting to include more companies across sectors or industries. The finding contributes to the ongoing debate on the effect of social media on business performance. It also defined the need for the owner/manager of SMEs to understand and appreciate the effect of social media through the organization's learning potential to gain a sustainable competitive advantage. Practical implications There are a number of theoretical and practical implications for academics and practitioners who are interested in further studies of organizational social media. The research presents a quantitative study on the effect of social media adoption on the organizational performance of the construction industry. This study confirms the mediating role of learning capability in the relationship between the use of social media and performance of SMEs operating in the construction industry. Originality/value This study empirically examined the relationship between social media adoption and the SMEs learning capability and business performance by evaluating a hypothesized conceptual framework to establish the relationships.

Cognitive consequences of business shut down. The case of Ugandan repeat entrepreneurs

2014 ◽  
Vol 20 (3) ◽  
pp. 263-277 ◽  
Author(s):  
Arthur Sserwanga ◽  
Gerrit Rooks
Keyword(s):  
Attribution Theory ◽  
Business Performance ◽  
Business Failure ◽  
Business Success ◽  
Past Performance ◽  
Content Type ◽  
Practical Applications ◽  
Subsequent Performance ◽  
Start Up ◽  
The Relationship

Purpose – The purpose of this paper is to focus on the cognitive and motivational consequences of a business failure, and their relation with subsequent start up success. The paper hypothesizes that if previous business failure was attributed to an internal and stable cause, subsequent business would be less successful compared to where an entrepreneur attributed business failure to an internal and unstable cause. Design/methodology/approach – The authors reviewed the literature on attribution theory in an achievement context and derived a hypothesis about the relation between causal thinking and subsequent business success. A survey amongst entrepreneurs in Uganda was carried out to yield insights on how attributions to past performance influence subsequent business performance. Findings – Entrepreneurs who attributed previous business failure to an internal, stable cause were found to be less successful in subsequent business start up. When repeat entrepreneurs attribute previous shut down to a lack of ability, they are less successful in a subsequent business start up. However, attributing the failure to a lack of effort, does not affect subsequent business success. Originality/value – The study reaffirms the importance of attributional thinking in entrepreneurship and provides empirical evidence on the relationship between the way entrepreneurs think about their previous performance and subsequent performance. Attributional thinking influences subsequent business actions and outcomes, which offers important practical applications. For instance training to change attributions of entrepreneurs may be used to influence their eventual performance.

scholarly journals Digital transforming capability and performance: a microfoundational perspective

2020 ◽  
Vol 40 (7/8) ◽  
pp. 1095-1128
Author(s):  
Thayla Tavares Sousa-Zomer ◽  
Andy Neely ◽  
Veronica Martinez
Keyword(s):  
Structural Equation ◽  
Dynamic Capabilities ◽  
Digital Transformation ◽  
Content Type ◽  
Performance Effects ◽  
Order Construct ◽  
And Performance ◽  
Using Data ◽  
The Relationship

PurposeDrawing on the literature on dynamic capabilities and digital transformation, this paper conceptualises and investigates the relevant antecedents of an essential capability for digital transformation – the digital transforming capability – and its effect on the competitive advantage of firms.Design/methodology/approachA framework with individual and organisational microfoundations of the digital transforming capability is proposed based on previous research. The digital transforming capability is conceptualised as a second-order construct. The model is tested using data from a broad spectrum of large US companies. Structural equation modelling (SEM) is applied to test the proposed framework.FindingsThe study identifies three main microfoundations that, when combined, build a digital transforming capability (digital-savvy skills, digital intensity and context for action and interaction); in addition, the study tests the relationship between digital transforming capability and firm performance. The results validate the proposed theoretical framework. In addition to proposing relevant microfoundations of the digital transforming capability, we advance knowledge on the performance effects of those microfoundations.Originality/valueThe paper contributes to advancing the understanding of the digital transformation phenomenon by revealing the role of the primary components underlying the digital transforming capability. Yet the mechanisms by which the micro-level aspects are important for digital transformation and organisational outcomes are only suggested by anecdotal evidence. The paper also contributes to ongoing calls for further investigation to extend the understanding of the microfoundations of dynamic capabilities. Finally, by drawing on archival data, this study also contributes to calls to broaden the toolkit used in dynamic capabilities research.

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