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This study examines the effect of digital capability on firm performance and firm growth. We apply the resource-based view and especially its expansion of the dynamic capabilities perspective to illustrate how digital capability is positively related to firm performance and firm growth, and how firm size is a relevant factor in explaining digital capability in incumbent SMEs. The context of this study is Finnish SMEs. The data were gathered from 242 SME owner-managers and analysed with structural equation modelling. The results show that smaller firms have less digital capability than larger SMEs and that smaller firms struggle with performance indicators. Digital capability is positively related to firm performance and firm growth. Our results indicate that although several factors explain and alter the course of firm growth, digital capability can boost the opportunity creation process, and aid survival in the face of competition. Digital capability is an important resource in SMEs and allows firms to safeguard the sustainability of their business model. We argue that digital capability is strongly related to SME’s management practices and SME owner/manager’s commitment to responding to digital transformation. This research sheds light on the importance of strategic leaders’ perceptions of digital capability on incumbent SMEs’ competitive advantage, and contributes both entrepreneurship theory and practice.

Supply chain management has become more important as an academic topic due to trends in globalization leading to massive reallocation of production related advantages. Because of the massive amount of data that is generated in the global economy, new tools need to be developed in order to manage and analyze the data, as well as to monitor organizational performance worldwide. This paper proposes a framework of business analytics for supply chain analytics (SCA) as IT-enabled, analytical dynamic capabilities composed of data management capability, analytical supply chain process capability, and supply chain performance management capability. This paper also presents a dynamic-capabilities view of SCA and extensively describes a set of its three capabilities: data management capability, analytical supply chain process capability, and supply chain performance management capability. Next, using the SCM best practice, sales & operations planning (S&OP), the paper demonstrates opportunities to apply SCA in an integrated way. In discussing the implications of the proposed framework, finally, the paper examines several propositions predicting the positive impact of SCA and its individual capability on SCM performance.

In today's hyper-competitive marketplace it is pivotal for firms to master the art of integrating disparate sources of knowledge. Managing knowledge requires a complex combination of new tools, infrastructure, intellectual capital, processes, strategies, and their coexistence and integration with the existing ones. Although knowledge management (KM) implementation appears relatively risky and overwhelming, it starts with a few steps and requires assistance from inside and outside the organisation. This paper examines the implementation of KM from a dynamic capabilities perspective (Teece et al., 1997) and proposes a model that summarises the normative framework, which suggests that an organisation builds the requisite infrastructure to be in a position to embark on the path towards successful KM implementation. Based on a case study of a UAE based firm, this paper illustrates the utility of the framework as a guide in efforts to manage knowledge, draws practical recommendations for managers and policy makers enabling them to develop their organisations in the global knowledge economy. The paper also proposes ideas for future research.

In this study, we investigated strategies that small and medium-sized enterprises (SMEs) in Canada employ to create, transfer, and apply knowledge, and we evaluated the importance of supporting dynamic knowledge capabilities and information systems. To examine the empirical support for a model based on the resource-based view of the firm, we conducted a survey of SMEs operating in knowledge-intensive industries. We tested relationships among knowledge strategy, information systems strategy, dynamic knowledge capabilities, and firm performance. SME performance was measured by their physical and financial capital, as well as four intangible types of capital: structural, human, innovation, and relational. We observed that dynamic knowledge capabilities only partially mediate the link between knowledge strategy and performance in SMEs. However, dynamic knowledge capabilities fully mediate the link between information systems (IS) strategy and performance in the small and medium-sized firms studied. We observed that information systems only indirectly influence firm performance, but they directly support the knowledge and innovation capital of SMEs. Further, our results indicated that, in SMEs, knowledge strategies directly influence IS strategies, and that alignment between knowledge strategies and IS strategies positively impacts dynamic knowledge capabilities, and hence firm performance.

Small firms facing today’s turbulent business environment often fail early in their life if they do not develop the necessary capabilities to survive. The main goal of this study is to investigate how IT and knowledge co-evolve, influencing a firm’s agility, within the context of micro and small enterprises (MSEs). Applying the resource-based view of the firm and dynamic capabilities, a multiple case study of eight firms was used to explore links among business, IT and knowledge strategies, resources, and capabilities. Links among IT and knowledge capabilities and firm agility were also explored. The results demonstrate that an MSE’s business strategy shapes, and is also shaped by, the firm’s IT and knowledge strategies; and that both IT and knowledge capabilities shape, and are shaped by, the firm’s agility, coevolving with it. By highlighting the important antecedents of small firm agility and presenting crucial links among agility, IT capabilities, and knowledge capabilities in MSEs, we encourage practitioners to think carefully about their IT and knowledge strategies and to rethink their use of firm resources and capabilities to develop agility in the face of environmental uncertainty and change.

This study evaluates the relationship between knowledge management (KM) and dynamic capabilities. This goal stems from a lack of research regarding the impact of KM on strategic organisational aspects, particularly in firms from emerging economies. Theoretically, the link between KM and dynamic capabilities (DC) is based on the knowledge-based view of the firm (KBV). This posits that knowledge, when appropriately managed, is the main source of strategic renewal for organisations. As such, hypotheses about the relationship between KM and the dimensions of DC were both formulated and tested, in 93 knowledge-intensive organisations in Colombia, using structural equation modelling. The results indicate that KM has a significant impact on dynamic capability dimensions. For practitioners, this study sheds light on the relevance of the implementation of KM initiatives, in order to activate DC in organisations.

Many scholars mentioned various dimensions and complex relations for manufacturing flexibility that implementing all of them is not possible for a manufacturing firm. On the other hand, today’s dynamic environment convinces flexible organizations to create capabilities in order to take over competitors. Hence, the aim of this study is to determine dominant groups of flexibility for manufacturing firms and to prioritize them under the influence of dynamic organizational capabilities. In this research, firstly components of dynamic organizational capabilities and flexibility of manufacturing are identified by content analysis method. Then, based on that, taxonomy for Iran’s manufacturing firms was determined using support vector machine algorithm. In the next step, based on experts’ view using FDEMATEL method, conceptual model for relationship of manufacturing flexibility dimension as well as dynamic capabilities are provided. Conceptual model in three flexibility clusters was tested by structural equation modeling, and dominant groups were prioritized based on dynamic organizational capabilities. Results show that the best number of clusters is three. Results also show that dynamic organizational capabilities not only affect flexibility dimensions of manufacturing but also this influence is different in manufacturing firms with various industry fields.

This paper examines the case of Nokia as a player of the mobile communication industry and provider of mobile communication system: Mobile handsets (consumer goods) and mobile networks (CoPS). Our aim is to analyze the impact of strategic management and dynamic capability developed by a firm of such an industry, which supports the entire system and manages inter-industry differences of consumer goods and CoPS. Recent convergence among technologies has raised competition among firms. Achieving and sustaining competitive advantage in this converging market is therefore possible by identifying threats and then developing strategies and capabilities to resolve them. This article concludes by examining how the firm can achieve its competitive advantage.

The paper discusses the relationship between learning, innovation and (institutional) reflexivity. It is often held that reflexivity is a crucial factor for learning and innovation processes. However, a rather formalistic approach to reflexivity is predominant. We propose to overcome this limitation and to develop a more meaningful concept of reflexivity which "reflects" the contingent, relational, dynamic and complex character of organizational environments and reality. Based on this broadened understanding it appears that reflexivity is imminently a dialectic category and, under specific circumstances, it can also inhibit innovation. This is especially the case when reflexive tools are abused to push performance only. In order to illustrate our concept and hypotheses we added two case studies which highlight the conflicting counterparts of reflexivity and innovation and pointed us to important cultural "success factors".

Routines and capabilities are patterns of actions, entailing both stability and change, according to which organizational behavior is investigated and that rest at the base of firms’ competitive advantage. Research in organizational theory recently started to disentangle the micro-foundations of these collective concepts in order to better grasp the mechanisms by which individuals influence the generation and evolution of routines and capabilities. In the present work we seek to contribute to this literature by investigating how the acquisition of a radical new body of knowledge via recruitment impacts on the evolution of the routines and dynamic capabilities of the firm. By means of a multiple case study research on mechatronics companies located in Northern Italy, the study examines if and how the insertion of graduates in a discipline new to the company modified its routines and the dynamic capabilities. In other words we explored whether the introduction of a new body of knowledge embodied in new graduates produced changes on the organization and functioning of the hosting R&D department and/or it also shaped the overall firm’s development strategies, thus overcoming the expected inertia. The results are important for both managing change to increase the company’s competitive advantage as well for the policy implications which can be derived.

Over the last few years, there has been considerable scholarly interest in the strategic management concept of dynamic capabilities. During the same period, sustainability policies and strategies have also become a major focus for many companies. These two areas have resulted in major new innovative opportunities for companies, including those located in emerging markets. However, up to the present time, few studies have attempted to combine the growing scholarly topic of dynamic capabilities with the equally important topic of sustainability strategy in the context of emerging market companies. This paper links these two areas through the theoretical lens of innovation theory. It develops and proposes four main business options for companies, particularly those from emerging markets, from an innovation perspective. The paper contributes new knowledge by identifying and expanding on the innovation strategy links between dynamic capabilities and sustainability strategy. It offers theoretical insights into the nature of that connection in the context of companies from both developed and developing economies.

As industries hold the opportunity to embrace artificial intelligence (AI) driven innovation, their success to a significant extent will depend on the value the new technology generates for different business stakeholder groups. This is in turn dependent upon how management can embrace these techniques and change as companies will frequently need to transform both internal processes and offerings to customers in order to reap the benefits of AI. AI is a growing research area currently concentrated around technology and modeling of techniques and yet only few examples and limited research are available, on how AI technology enables new capabilities that can impact the value delivered as well as radically transform it. We thus need to understand what new capabilities these technologies bring about and how they are used. Based on three concrete empirical quasi-experiments, interviews conducted with start-ups and a Swedish industrial manufacturing firm dealing with outdoor power products (like grass-cutters, chain-saws, concrete-saws, etc.) for professional and consumer use and using an analytical framework derived from the Resource Based View, this paper explores capabilities enabled through Edge AI and the competitive advantage these may offer. Specific capabilities (self-calibration, enhanced-sensing, selective-capture and reputation) are identified and implications for theory are discussed, pointing out the importance to consider this type of technology not only as a resource, but rather as a dynamic capability in itself.

The objective of this study is to examine how digital platforms digitally innovate companies and organizations, using the business model for dynamic capacity in three Brazilian companies. To achieve the proposed objective, a case study research method was used, with theoretical models of digital platforms, digital innovation and dynamic capabilities. The empirical research results proved that the three companies have a digital platform for business transactions as their main component, and that this model connects customers and suppliers through services.

This study aims to explore the dynamic capabilities (DCs) framework (with sensing, seizing, and reconfiguration dimensions) by exploring the fulfilment layer and underlying processes and structures employed in business model innovation (BMI) process within both new and established entrepreneurial firms. We employed exploratory and descriptive qualitative research method and gathered data through semi-structured interviews with entrepreneurs of nine firms operating in the science-park settings in Istanbul, Türkiye. This study uncovered rich insights about the DCs, as categorized in this study under 10 sub-dimensions. In addition, three different fulfilment layers of DCs emerged at the entrepreneurial firms: (i) the entrepreneurial capabilities at the individual layer, (ii) the entrepreneurial team’s complementary capabilities at the top managerial layer, and (iii) the mechanisms and routines at the organizational layer. DC sub-dimensions suggested in our study are clues for entrepreneurs to develop BMIs. Practitioners are recommended to consider their primary responsibility for BMIs processes independent of the size of the firms, to build entrepreneurial teams with partners having the complementary skill set and concentrate on the employees’ selection, as well as their adaptation to the firm routines. Additionally, the study complements Teece’s theoretical DC framework on BMI extending it into fulfilment layer and opens a fruitful research area for scholars.

This paper seeks to explore innovation in new work practices in the context of the current COVID-19 pandemic and identify which indicators of same lead to workplace attractiveness. From a socio-demographic perspective, service industry employees constituted the focus of this study. The study employed a two-step mixed-methods approach. First, the qualitative component deduced a data structure of innovative new work practices by conducting 21 semi-structured interviews with top- and middle-level managers. Second, hypotheses were formulated based on the qualitative data, and a quantitative survey with 155 employees was used to test the effectiveness and attractiveness of innovative new work practices using psychological empowerment as a mediator. The data structure was conceptualized according to three dimensions: (i) innovating approaches to new work, (ii) innovating leadership attitudes, and (iii) innovating organizational culture. The results of the quantitative study suggest that the innovation in leadership attitude and in organizational culture have a strong influence on psychological empowerment, thereby positively influencing workplace attractiveness. This paper contributes to a uniform understanding of innovative work practices in the context of the COVID-19 pandemic. Through empirical testing, the paper highlights specific indicators of innovation in work that lead to increased workplace attractiveness. Service organizations during such crises as pandemics can concentrate on the three dimensions and the specific indicators to implement innovative work measures while increasing workplace attractiveness for their employees.

This article explores the impact of financial strategy, by gender, on firm performance using data from the Panel Study of Entrepreneurial Dynamics (PSED). Our findings reveal that financial strategies do have an impact on performance and that female and male entrepreneurs use different financial strategies. Our findings also show no significant performance differences in female- versus male-owned firms in the earliest years of the firm, although significant differences did emerge in the later years. Finally, our findings attest to the dynamic and "cumulative" effect of financial strategy.

This paper examines how rural female entrepreneurs in Lebanon navigate challenges and opportunities amidst economic crises. It aims to understand how they leverage resources to overcome barriers and enhance their entrepreneurial potential, offering insights for fostering sustainable entrepreneurship in crisis-affected regions. This study employs Integrative Qualitative Methods, combining participatory action research (PAR) and narrative inquiry, to explore the motivations, experiences and aspirations of rural female entrepreneurs in Lebanon. Amidst severe economic crises, 28 female entrepreneurs participated in a three-year program supporting their businesses. The findings indicate that rural female entrepreneurs in Lebanon are primarily motivated by family sustainability, social effect and personal fulfillment. They demonstrate significant adaptability to market changes and are able to leverage support networks to manage resources effectively. Strategic resource allocation, communication and collaboration are key to their success. Overall, these findings highlight the resilience and strategic acumen of rural female entrepreneurs, emphasizing the importance of ongoing support for economic growth and community development.

This paper draws together knowledge from a variety of fields to propose that innovation management can be viewed as a form of organisational capability. Excellent companies invest and nurture this capability, from which they execute effective innovation processes, leading to innovations in new product, services and processes, and superior business performance results. An extensive review of the literature on innovation management, along with a case study of Cisco Systems, develops a conceptual model of the firm as an innovation engine. This new operating model sees substantial investment in innovation capability as the primary engine for wealth creation, rather than the possession of physical assets. Building on the dynamic capabilities literature, an "innovation capability" construct is proposed with seven elements. These are vision and strategy, harnessing the competence base, organisational intelligence, creativity and idea management, organisational structures and systems, culture and climate, and management of technology.

Long-term success requires the challenging task of persistently creating and capturing value. Institutional theory addresses persistence in organisations and inter-organisational fields, but uncovers a paradox: while institutionalisation increases survival chances, it generates inertia, rigidity, and resistance to change, and therefore reduces long-term competitive advantage. The historical analysis of two long-lived electrical manufacturing companies (General Electric and Westinghouse) suggests that both developed a distinctive technological competence, and, for many decades, persistently created value. However, General Electric's distinctive competences also included dynamic and value-capture capabilities. These findings suggest that long-term success may occur in the presence of institutionalisation, if institutionalisation encompasses dynamic capabilities. In addition, this paper suggests that a resource-preservation dimension be included in the dynamic capabilities construct and in institutional theory, and that depending on how institutionalisation is conducted, the organisation may create habits that prevent or foster the side effects of institutionalisation processes.

Innovation is a strategic issue in need of internal and external alignment. This is particularly the case for supplier innovations, as new product concepts and strategies must cope with supply chain interfaces. Suppliers' strategies are oftentimes confronted by innovation rigidities resulting from a manufacturers' need to manage the integration of several components from various suppliers into a coherent innovation. Suppliers can follow different innovation strategies derived from a deliberate planning or a emerging as suppliers incrementally learn and experiment along their path. A survey of 241 suppliers illustrates that these two strategic types effect on market success depends on the level of the rigidities. The survey results also illustrate that two dynamic capabilities, the planning capability and the innovation orientation, act as intermediary variables to increase success under specific rigidity conditions. The findings further illustrate that dynamic capabilities can be enhanced by an adequate strategy.