Dynamic capabilities: the emperor's new clothes?

Buell-Armstrong, Kate (2015) Dynamic capabilities: the emperor's new clothes? PhD thesis, University of Glasgow.

Abstract

This study initially aimed to evaluate dynamic capability theory using a longitudinal empirical case of a highly successful FTSE-100 company operating within a volatile market. Using a range of rich qualitative data to open the “black box”, dynamic capabilities theory is extended through a detailed account of the process through which the case firm reconfigures and deploys their so-called zero-order or operational capabilities. Although there is a burgeoning literature, research findings remain diverse, disparate and largely conceptual. The limited examples of empirical work in the extant literature, tend to focus on what dynamic capabilities are with little attention in demonstrating how they actually operate.
This study details several stages of significant change within the case firm as it moves from start up to its current MNE status. In-depth interviews with the senior team both past and present capture discussions of those factors underlying the success of this firm. Thematic development revealed examples of resource configurations and routines that matched dynamic capability as defined in literature. However, attempts to use Winter's (2003) hierarchy of capability to organize the data proved inadequate; far from being heterogeneous, the dynamic capability found looks like best practice; and whilst operational capability can be seen to evolve, the dynamic capability identified has not. Turning to the wider strategic management literature one can argue that the dynamic capability found in this firm fits better with a wider set of concepts such as knowledge management, absorptive learning, organizational change, leadership, HR practices, strategic decision making, team building, etc. Using a dynamic capability perspective, the findings might extend the under-developed notions of dynamic managerial capability and entrepreneurial fitness. Dynamic managerial capability, as described in the literature, can be articulated within the case firm. Managerial agency is key to competitive success in this firm and this study shows that the concept of agency is more encompassing than that of dynamic managerial capabilities and Teece’s (2007) vision of sensing, seizing and reconfiguring. There are cognitive aspects to creating the context for leadership action and the roles of sense-making and sense-giving to sustain the organizational culture and create the framework for innovation, learning and change.
Yet, it is equally possible to account for competitive advantage within this case without recourse to dynamic capability theory. By linking the data gathered to the concept of "dominant logic" (Prahalad & Bettis, 1986; 1995), it is argued that traits and attitudes of the founders and senior managers of the case firm contribute to the “logic” that drives action. Over time these traits have been expressed as a series of simple rules that, in turn, have been operationalized in an organizational culture providing the context for the development of both routines and ad-hoc action. The thesis then demonstrates analytically how rules and their underlying traits act as a mechanism for the creation, sustenance and adaptation of operational capabilities traceable directly to actions taken in response to or in anticipation of environmental changes as well as actions taken in the context of an organizational culture which reflects these rules and underlying traits. It is through managerial agency that rules are created, the culture sustained and “entrepreneurial fitness” is achieved. As such, the research presented here contributes to the resource-based theory of the firm without recourse to the dynamic capabilities construct.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Keywords: strategy, resource-based, dynamic capability, dynamic managerial capability, heuristics, cognition, organizational culture, grounded theory, qualitative research.
• Subjects: H Social Sciences > HB Economic Theory; H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
• Colleges/Schools: College of Social Sciences > Adam Smith Business School > Management
• Supervisor's Name: MacIntosh, Professor Robert
• Date of Award: 2015
• Depositing User: Mrs Kate Buell-Armstrong
• Unique ID: glathesis:2015-6306
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 11 May 2015 15:24
• Last Modified: 20 May 2015 15:59
• URI: https://theses.gla.ac.uk/id/eprint/6306