Refining a subsidiary evolution framework: clarifying key concepts

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Johan Jakobsson ◽  
Katarina Lagerström ◽  
Roger Schweizer
Keyword(s):  
Dynamic Capabilities ◽  
Capability Development ◽  
Research Attention ◽  
Resource Based View ◽  
Content Type ◽  
Management Perspective ◽  
Conceptual Paper ◽  
Development Literature ◽  
Subsidiary Evolution ◽  
Point Of Departure

Purpose While the evolution of subsidiaries has received considerable research attention, the framework for understanding it has not evolved much since the late 1990s. The purpose of this paper is to add both clarity and depth to the work on the foundations for – as well as the processes of – capability creation and development as a subsidiary evolves. Design/methodology/approach This conceptual paper takes as its point of departure the micro-foundation literature, with a specific emphasis on the capability development literature. To describe capability creation and development, both the resource-based view and the resource management perspective are used here. Findings The paper adds a conceptual layer to the drivers of subsidiary evolution. To add further clarity regarding how capabilities are actually formed, the resources for capability creation and development are specified herein as entities, abilities and capacity. Arguments are also presented for why capabilities ought to be viewed as patterned behavior to decrease the terminological ambiguity surrounding the concept of capabilities. The process of capability creation and development with an emphasis on learning is brought forward. Further, capability typologies, in terms of substantive, managerial and dynamic capabilities, are presented to add specificity to the kinds of capabilities that are created and developed within a subsidiary. Originality/value Clarifying the concept of capability and how capabilities are formed by using advancements in the literature is important to add precision to the literature on the evolution of subsidiaries.

A problem-solving process for developing capabilities: the case of an established firm

2019 ◽  
Vol 23 (4) ◽  
pp. 713-727
Author(s):  
Ei (Emily) Shu
Keyword(s):  
Problem Solving ◽  
New Product Development ◽  
Dynamic Capabilities ◽  
Dynamic Capability ◽  
Capability Development ◽  
Unique Problem ◽  
Content Type ◽  
Different Types ◽  
Problem Solving Process ◽  
Development Literature

Purpose Current research has theorized that developing dynamic capability can be viewed as a problem-finding and problem-solving process in terms of a firm’s resource reconfiguration. However, there continues to be a scarcity of empirical research on how firms and managers solve innovation problems to develop capabilities. Building on the theoretical lens of problem-solving perspective (PSP) and dynamic capability literature, the purpose of this paper is to address this gap by examining how a large automobile company developed different types of capabilities (combining capability, replacing capability and evolving capability) and their underlying problem-solving processes. Design/methodology/approach An inductive multi-case design was used to investigate the problem-solving process in different types of capability development in the context of NPD. This methodology has a number of benefits, including accommodation of the rich data used to compare the inferences among cases, thus enabling researchers to extend the emergent theory. Findings The findings of a multi-case study show that managers tend to direct their attentions to searching for solutions among external resources when the problem is framed as a combination of existing capabilities. Conversely, managers direct their attention to facilitating organizational learning when the problem is framed as an extension of an existing capability. However, managers need to direct more attention to gaining legitimacy when the problem is framed as a replacement of existing capabilities. The findings thus respond to increasing calls for more investigations into the microfoundations underlying firms’ capabilities, by revealing different instances of PSP, and their connections with different actions that take to capability development. Originality/value By comparatively examining the unique problem-solving process underlying an established firm’s innovative challenges in developing capabilities, the findings identify different instances of PSP, and their connections with different actions that take to capability development. Thus, the findings respond to increasing calls for more investigation into the microfoundations of dynamic capabilities for organizational outcomes. The findings also add to the new product development literature by examining how a product innovation can be framed differently depending on the attributes of an innovation problem. As PSP is particularly useful in offering guidance to firms’ innovative search, it is important for managers to pay attention to the attribute of each product and its domain of solution in considering the effectiveness of value creation.

Building (or not building) dynamic capabilities: the case of Italian subsidiaries in China and India

2018 ◽  
Vol 26 (4) ◽  
pp. 337-360 ◽  
Author(s):  
Giuseppe Tattara
Keyword(s):  
Value Chain ◽  
Multinational Enterprises ◽  
Dynamic Capabilities ◽  
Case Study Research ◽  
Business Strategies ◽  
Future Research ◽  
Capability Development ◽  
Regional Effect ◽  
Content Type ◽  
Capability Building

Purpose The purpose of this paper is to examine the process of capability building at subsidiary level and the forces preventing such process. The paper discusses and tests three propositions governing this process. Design/methodology/approach This research is based on multiple case studies. A case study research is most useful when addressing issues about which little prior theory has been developed or empirical evidence collected. Findings Subsidiaries in Asia operate in a way substantially different from those in the West. Specifically what ways do market specificities in Asian economies serve to either inhibit or positively encourage the development of a subsidiary? What are the circumstances which could induce subsidiaries to outsource production? Research limitations/implications Future research should explore the regional effect on MNE subsidiary types and different flexibilities exhibited in the value chain. What are the specific aspects (macro and micro) that explain variations of business strategies at subsidiary levelboth over time and between countries? Practical implications Multinational enterprises (MNEs) should be aware of the strong potential for capability development at the subsidiary level. This increased awareness ought to induce consideration in MNEs about how best to encourage such know capability development and how to leverage these capabilities for a better MNE performance. Social implications Managers who knew the host country languages and culture, and have outward-looking attitudes, are in advantageous positions to learn about new opportunities. Originality/value The paper offers empirical insights into the state and drivers of subsidiary performance in Asia. Specifically it shows how neglect of external conditions can act to open people’s eyes and foster a capability-building process within subsidiaries.

scholarly journals Organizational Learning and Green Innovation: Does Environmental Proactivity Matter?

2018 ◽  
Vol 10 (10) ◽  
pp. 3737 ◽  
Author(s):  
Yali Zhang ◽  
Jun Sun ◽  
Zhaojun Yang ◽  
Shurong Li
Keyword(s):  
Emerging Economies ◽  
Dynamic Capabilities ◽  
Corporate Sustainability ◽  
Capability Development ◽  
Green Innovation ◽  
Resource Based View ◽  
Green Product Innovation ◽  
And Performance ◽  
Green Process Innovation ◽  
Internal Stakeholders

Emerging economies face the challenge of striking a balance between development and the environment. To adapt to the changes, organizations must develop dynamic capabilities for green innovation and corporate sustainability. Based on a resource-based view integrated with contingency and stakeholder theories, this study examines how strategic contingency makes differences in the transformation between learning and performance resources through innovation efforts. Oriented toward external and internal stakeholders, respectively, learning resources comprise absorptive capacity and transformative capability, innovation efforts include green product innovation and green process innovation, and performance resources contain green image and competitive advantage. Depicting their mediating relationships moderated by environmental proactivity, the research model is supported by survey observations collected from over 300 organizations in China. Environmentally proactive organizations are found to have more balanced dynamic capability development than those that are more reactive. To optimize green innovation, therefore, organizations need to embrace an ecological strategy and engage employees in learning.

Examining the role of logistics 4.0 enabled dynamic capabilities on firm performance

2020 ◽  
Vol 31 (3) ◽  
pp. 607-628 ◽  
Author(s):  
Surajit Bag ◽  
Shivam Gupta ◽  
Zongwei Luo
Keyword(s):  
Firm Performance ◽  
Operations Management ◽  
Structural Equation ◽  
Dynamic Capabilities ◽  
Organizational Capabilities ◽  
Technological Capabilities ◽  
Capability Development ◽  
Content Type ◽  
Questionnaire Online ◽  
Survey Responses

PurposeThe study investigates the effect of technological capabilities, organizational capabilities and environmental capabilities on Logistics 4.0 capabilities and also examines the effect of Logistics 4.0 capabilities on firm performance.Design/methodology/approachThe proposed theoretical framework is tested using WarpPLS 6.0 software. We selected samples from the Automotive Component and Allied Manufacturers in South Africa. Initially, we sent the structured questionnaire online using Google forms to 800 potential respondents. After doing follow ups, we received 230 completed survey responses. Further, data preparation is done using established scientific approach and we checked suitability of its use in structural equation modelling. After ensuring all necessary checks are completed, the results are found satisfactory to further proceed with testing of research hypotheses.FindingsIt is observed that technological capabilities, organizational capabilities and environmental capabilities show significant effect on Logistics 4.0 capabilities. However, the outcome of technological capabilities and environmental capabilities on Logistics 4.0 capabilities (ß = 0.27) is found stronger than organizational capabilities. Logistics 4.0 capabilities shows significant effect on firm performance.Practical implicationsIt is important that the sustainability goals are aligned with Logistics 4.0 strategies. Managers need to increase focus towards development of Logistics 4.0 dynamic capabilities that enhance agility and responsiveness in the supply chain. Managers should check the financial performance and market conditions continuously to further review logistics performance as this can influence the overall firm performance.Originality/valueThis study advances the literature on Logistics 4.0 applications in operations management by investigating the key links such as Logistics 4.0 capability development and firm performance.

Creating Competitive Advantage

2011 ◽  
pp. 202-225
Author(s):  
Arla Juntunen
Keyword(s):  
Dynamic Capabilities ◽  
Business Networks ◽  
Network Approach ◽  
Longitudinal Case Study ◽  
Industry Cluster ◽  
Resource Based View ◽  
Cluster Networks ◽  
Management Perspective ◽  
Market Transaction

This chapter addresses collaborative business networks at the level of industry/cluster networks, which is important and relevant from the strategic management perspective in several industries. This chapter examines two current “hot topics”: the emergence of a new Internet driven business group, and its construction through a series of intentionally developed collaborative networks. Networks are seen to offer firms collective benefits beyond those of a single firm or market transaction. The author of this chapter aims to contribute to the development of the emerging theory of network management by inte-grating notions from the Industrial Network Approach and the Resource-Based View of the firm, in particular its extensions into dynamic capabilities and learning. The starting premise is that the charac-teristics of the task that organizations try to accomplish through forming a specific collaborative net-work influence, the management of that network, and thus, the capabilities developed and required. This chapter is based on a longitudinal case study in the ICT-sector.

scholarly journals Resource-based competition: three schools of thought and thirteen criticisms

2014 ◽  
Vol 26 (2) ◽  
pp. 122-148 ◽  
Author(s):  
Tarek El Shafeey ◽  
Paul Trott
Keyword(s):  
Design Methodology ◽  
Dynamic Capabilities ◽  
Core Competencies ◽  
Social Constructionist ◽  
Management Research ◽  
Resource Based View ◽  
Content Type ◽  
The Social ◽  
Practical Implications ◽  
Terminological Confusion

Purpose – The field of research on resource-based competition is full of nuanced terminology and misunderstandings. This has led to confusion, and thus the authors offer a critical review, which provides a structure and clarity to this subject. The paper aims to discuss these issues. Design/methodology/approach – This analysis structures the literature on resources, capabilities, and competences into three distinct schools of thought: the resource-based view (RBV) of the firm, the rational-equilibrium school; the dynamic capability-based view of the firm, the behavioural-evolutionary school; and the competence-based view of the firm, the social constructionist school. Findings – The authors uncover 13 criticisms of the most widely adopted theoretical framework of the RBV of the firm – Valuable-Rare-Imperfectly imitable-Organisation (VRIO). Research limitations/implications – The misinterpretation and neglect of the classic scholarly work may help to explain why the VRIO framework has been elevated from a view to a theory and why it has received so much attention. Practical implications – The authors show how the relative ease of measuring resources as compared to (dynamic) capabilities and (core) competencies has helped raise the profile of RBV. Originality/value – This analysis contributes to management research by illustrating the deviation among the three schools of thought; the authors show how this has contributed to wide terminological confusion and offer a structure to help researchers situate their work within the relevant school of thought.

Leadership and innovation capability development in strategic alliances

2014 ◽  
Vol 35 (5) ◽  
pp. 442-469 ◽  
Author(s):  
Jochen Schweitzer
Keyword(s):  
Transformational Leadership ◽  
Transactional Leadership ◽  
Strategic Alliances ◽  
Dynamic Capabilities ◽  
Leadership Behaviors ◽  
Full Range ◽  
Capability Development ◽  
Measurement Scales ◽  
Content Type ◽  
Operational Capabilities

Purpose – The purpose of this paper is to examine whether heterogeneity in alliance capability development can be attributed to the use of certain intra-firm leadership behaviors. The author suggests that transformational leadership behaviors have a stronger influence on the development of innovation (dynamic) capabilities of a strategic alliance than on the development of operational (substantive) capabilities, and that transactional leadership behaviors mainly preserve operational capabilities. Design/methodology/approach – The author used in-depth expert interviews and a questionnaire survey comprising 369 strategic business alliances to develop and test the theoretical framework. Findings – The data confirm the positive relationship between transformational leadership and the development of innovation and operational capabilities. Yet, transactional leadership behaviors are not only associated with operational capability development, but notably contribute to the development of innovation capabilities. Research limitations/implications – While the study focusses on leadership, there are many more factors that impact on the strategic ability of alliances to deliver innovation outcomes. Other limitations are the multiple levels of analysis in the theoretical model, newly developed measurement scales and that responses for the empirical study only come from one partner of the alliance. Practical implications – The study suggests advantages of exercising the full range of leadership behaviors when seeking innovation alliance outcomes. Originality/value – This research contributes to the strategic management, innovation, leadership, and alliances literature by providing new and empirical validation of the effectiveness of particular leadership behaviors in collaborative settings.

Tracing the economics behind dynamic capabilities theory

2020 ◽  
Vol 12 (2) ◽  
pp. 187-201
Author(s):  
Madhavi Kapoor ◽  
Vijita Aggarwal
Keyword(s):  
Dynamic Capabilities ◽  
Economic Systems ◽  
Recent Criticism ◽  
Innovation Capability ◽  
Research Model ◽  
Resource Based View ◽  
Content Type ◽  
Research Framework ◽  
Knowledge Based ◽  
Capabilities Theory

Purpose The purpose of this paper is to trace the evolution of dynamic capabilities theory in the primal theories of economics and strategic management. Then a comprehensive research framework is proposed to grapple with the dynamics of the contemporary global markets, incorporating the quintessential elements of the theory, i.e. absorptive capability, innovation capability and adoptive capability. Design/methodology/approach The paper is conceptual in nature. It tries to review various economic systems of the world since 1770s till the present era. It also evaluates various theories of international business against dynamic capabilities theory and thus proposes various propositions for future empirical testing. Findings The study has delineated various theories tracing in them the roots of dynamic capabilities. Capitalism, communism and socialism is explained to reach the present state of world economy. Various theories such as the theory of creative destruction, transaction-cost approach, resource-based view and knowledge-based view of the firm have been elaborated to identify their features and shortcomings. Finally, the contemporary theory of dynamic capabilities has been elucidated to integrate the shortcomings of the previous theories. A research framework has also been proposed to overcome the recent criticism of the dynamic capabilities theory of having under-specified constructs. Originality/value Very few studies have elaborated various economic systems and theories to trace the evolution of dynamic capabilities theory. Thus, this study is original in nature and the proposed research model is also novel which induces further empirical evidence as proposed by the authors.

Dynamic Capabilities in R&D-Networks

2010 ◽  
pp. 58-73
Author(s):  
Arla Juntunen
Keyword(s):  
Dynamic Capabilities ◽  
Collaborative Network ◽  
Business Networks ◽  
Longitudinal Case Study ◽  
Industry Cluster ◽  
Resource Based View ◽  
Cluster Networks ◽  
Management Perspective ◽  
Market Transaction

This chapter addresses collaborative business networks at the level of industry/cluster networks, which is important and relevant from the strategic management perspective in several industries. Collaborative networks are seen to offer firms collective benefits beyond those of a single firm or market transaction. The author of this chapter aims to contribute to the development of theories of knowledge management, organizational learning and a resource-based view of the firm. The initial argument is that the characteristics of the task that organizations try to accomplish through forming a specific collaborative network influence the organization’s intellectual capital, the capabilities developed and required. This chapter is based on a longitudinal case study in the ICT-sector.

Developing dynamic capabilities for learning and internationalization

2016 ◽  
Vol 11 (3) ◽  
pp. 328-347 ◽  
Author(s):  
Margaret Tallott ◽  
Rachel Hilliard
Keyword(s):  
Conceptual Model ◽  
Dynamic Capabilities ◽  
Single Case ◽  
Empirical Work ◽  
Strategic Decision ◽  
Dynamic Capability ◽  
Single Case Study ◽  
Capability Development ◽  
Content Type

Purpose – The purpose of this paper is to examine the development process of dynamic capabilities. Design/methodology/approach – The paper adopts a qualitative, longitudinal participant-observation research design. A single case study firm was observed over a ten-year period of active researcher engagement allowing for the collection of rich data on the development and deployment of dynamic capabilities as they evolved. Findings – Dynamic capabilities can be identified as sensing, seizing and transforming. They are capable of intentional development by managers through strategic decision making and deliberative learning, within a path-dependent evolution. Research limitations/implications – A longitudinal single case study allowed for a close look at the development of dynamic capabilities, exploring the context and conditions that facilitated change and tracing the evolution of the organization’s processes. However, this study remains subject to the limits of a single case approach. Future cross-sectional research would be able to test the conceptual model and allow for generalization of the findings to other populations of firms. Practical implications – The dynamic capability concept has been criticized for being of little practical use to managers. This research shows the process of intentional dynamic capability development, offering insights to practicing managers. Originality/value – This research adds to the relatively scant base of empirical work on dynamic capabilities and offers a conceptual model of dynamic capability development. The paper contributes to the neglected area of dynamic capabilities in SME’s, showing that the dynamic capability concept is relevant to this sector. The paper provides insight for practitioners by showing that intentional dynamic capability development is achievable.

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