Session 237

Dynamic Capabilities, Evolution and Change

Track H

Date: Monday, November 7, 2011


Time: 13:30 – 14:45

Common Ground

Room: Periwinkle


  • Thomas P. Moliterno, University of Massachusetts, Amherst

Title: Capability Dynamics within MNCs: A Coevolutionary Perspective


  • Paula Kilpinen, Aalto University

Abstract: The current perspectives view multinational corporations (MNCs) as the main vehicles of cross-border transfer of capabilities that transform the environment by shaping the external selection criteria (Dunning and Lundan, 2010). Although prior research has suggested that firms are able to create market change (Eisenhardt and Martin, 2000) and modify the external environment to match their strategies, resources and capabilities (Teece, 2009), current literature is limited in specifying the processes and mechanisms by which firms modify the external selection criteria. By integrating the evolutionary and dynamic capability literatures with MNC literature, supported by an in-depth case study, this study addresses the co-evolutionary processes underlying capability dynamics and identifies the key internal and external determinants of capability development within MNCs, subject to a multi-polar business environment.

Title: Exploring Ambidexterity in Supplier Networks: Evidence from the Italian Motor Vehicle Sector


  • Constance Helfat, Dartmouth College
  • Andrea Lipparini, University of Bologna
  • Gianmario Verona, Bocconi University

Abstract: By studying buyer-supplier relations in the Italian motor-vehicle sector, we uncover the ambidextrous nature of networks that are leveraged by lead manufacturers. Our exploratory study on Ducati and Ferrari shows how firms in this setting rely upon a multi-network system for experimentation with new product concepts and components and for new product development (exploration) but also for supply chain management (exploitation). Our findings highlight that while firms utilize some suppliers for either exploration or exploitation, other suppliers are used for both purposes. In this way, the complex network of suppliers used by lead firms enables simultaneous rather than sequential ambidexterity. Hence, our results suggest a trade-on rather than a trade-off between exploration and exploitation.

Title: From Snapshot to Continuity: An Entrainment Model of Organizational Adaptation to Environmental Decline


  • Achim Schmitt, École hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland
  • Patricia Klarner, Erasmus University Rotterdam

Abstract: This paper utilizes entrainment theory to develop propositions describing and explaining organizational adaptation to reoccurring situations of environmental decline. While prior research neglected multiple dynamics throughout the time, this article argues that alignment between the pace of environmental decline and the respective organizational adaptation over successive environmental crises will be positively associated with firm performance. In addition, the paper introduces top management team stability and decision-makers’ experience as contingencies for pace entrainment. Overall, this article offers a theoretical perspective that adds to existing controversies regarding effective strategic adaptation to situations of environmental decline, extends traditional contingency models neglecting the timing of strategic activities, and advocates incorporating the notion of time in the development of theory.

Title: Organizational Design as a Dynamic Capability: The Case of General Electric


  • Dennis Gillen, Syracuse University
  • Will Geoghegan, Syracuse University
  • S.P. Raj, Syracuse University

Abstract: This paper focuses on the application of the dynamics capabilities perspective to the concept of Organizational design. Specifically, it complements the dynamic capabilities perspective by adding a new process variant and supplements the extant theory of dynamic capabilities to include Organizational design. The paper offers three propositions that are then applied to GE over a 60-year period (1951-2011). The first proposition is that Organizational design is a dynamic capability that evolves from successful implementation of structural and contextual responses. Secondly, Organizational dynamic design capability is developed from experience-derived learning and knowledge codification that is path dependent and can lead to organizational specific heuristics. Finally, dynamic organizational design capabilities can enable the co-evolution of an organization by providing first strike and adaptive responses to the environment.

Title: Project Portfolio Management in Dynamic Environments: An Empirical Contribution to Dynamic Capability Theory


  • Yvan Petit, University of Quebec-Montreal
  • Brian Hobbs, University of Quebec-Montreal

Abstract: This research undertook to investigate the area of project portfolio management (PPM) in dynamic environments using dynamic capabilities as a framework. The objective was to attempt to answer the research question: How is uncertainty affecting project portfolios managed in dynamic environments? Four portfolios in two firms were investigated using retrospective analysis. Based on the experience gained in using the dynamic capabilities framework to study PPM, it was found that dynamic capabilities are best represented through different levels of organizing mechanisms: one leading to reconfiguring (i.e. changes in the project portfolio structure and resource allocation) and one to transforming (i.e. a second-order capability defined as the competence to improve or to build new first-order competences).

Title: Regulatory Events and Activity System Adaptation: The Role of Resource Properties


  • Lyndon Oh, University of St. Gallen
  • Markus Kreutzer, EBS University of Business and Law

Abstract: Business model adaptation in the face of exogenous shocks such as regulation is vital for firms' long-term survival. However, we do not yet sufficiently understand what causal factors determine various types of adaptive mechanisms. In particular, researchers would benefit from understanding the role of specific spatial-temporal features of regulatory events and the focal firm's activity system properties, i.e. its resource attributes. To explain why some firms respond to regulatory shocks differently and emerge relatively stronger, we present a model in which we link activity system adaptation to the regulation's spatial, temporal, and uncertainty properties as well as the firms' ex ante asset specificity and asset complementarity. We aim to advance a first step toward a theory of regulation and activity system change.

Title: The Evolutionary Dynamics of Strategic Fit


  • Peter Bryant, IE Business School

Abstract: My conceptual paper analyzes the evolutionary dynamics of strategic fit. I argue that these processes occur within industrial ecologies characterized by relative resource scarcity and uncertainty. Underpinning the argument is a fundamental insight from evolutionary biology, that within environments rich in resources and information, the dominant selection process is the extinction of the weakest and survival of the adequately fit, not the survival of the fittest. When applied to theories of competitive strategy, this insight suggests four strategic logics and related mechanisms of evolutionary selection and adaptation: position logics and adaptive coasting; resource and knowledge leverage logics and adaptive thickening or thinning; and opportunity logics and adaptive patching. The resulting model thus explains the evolutionary drivers of strategic logics and modes of adaptation.

All Sessions in Track H...

Sun: 09:30 – 10:45
Session 325: Strategy Process and Practice Research in Perspective and Future Directions
Sun: 11:15 – 12:30
Session 326: Systems Perspective to Strategy Process Research
Sun: 13:45 – 15:00
Session 327: Strategy Process, Acquistion Process and Activity Sequences
Mon: 08:00 – 09:15
Session 238: Processes for Adaptation and Change
Session 244: TMT Traits, Characteristics and Roles
Mon: 11:00 – 12:15
Session 239: Risk, Uncertainty and Behavior
Mon: 13:30 – 14:45
Session 237: Dynamic Capabilities, Evolution and Change
Mon: 15:15 – 16:30
Session 242: Managerial Levels and Roles in Processes
Tue: 11:15 – 12:30
Session 241: Perspectives on Strategy Making and Planning
Tue: 14:15 – 15:30
Session 246: Processes of Resource Management
Tue: 16:00 – 17:15
Session 243: Understanding Decision Making Processes
Wed: 08:00 – 09:15
Session 304: Alliances and Cooperation Processes
Wed: 09:45 – 11:00
Session 240: Organizational Structures and Processes

Strategic Management Society