Dynamic capabilities and multinational enterprise: Penrosean insights and omissions

Reconfiguration of Technological and Innovation Capabilities in Mexican SMEs: Effective Strategies for Corporate Performance in Emerging Economies

Latin American SMEs currently have serious financial and technological limitations. These problems have generated poor progress in technological digitization, innovation management, and corporate performance. The purpose of this research is to first analyze the direct effect that digitalization has on the management of innovation and corporate performance of Mexican SMEs. Secondly, the moderating effect that technological barriers have on the digitization, innovation, and results of the corporate performances of Mexican SMEs is examined. This study compiles information from a sample of 4121 managers of SMEs in the service trade and manufacturing sector. The information collection technique was through a personal interview (online questionnaire) addressed to the owner and/or manager of the SMEs through the LimeSurvey Professional platform. The fieldwork was carried out during the months of January to July of the year 2022. The structural equations model (SEM) was used for data analysis, specifically with the statistical technique of analysis of variance through the partial least square (PLS). The findings revealed that digitization has positive and significant effects on innovation management and corporate performance. In addition, the results indicate that the barriers to digitalization as a moderating variable have been impeding development and digital transformation and reducing the results of innovation and corporate performance of Mexican SMEs. This study contributes to the development of dynamic capabilities theory.

Addressing the Impact of Fourth Industrial Revolution on South African Manufacturing Small and Medium Enterprises (SMEs)

The fourth industrial revolution (4IR) may fundamentally alter, not only the way people work but also, how Small and Medium (SME) manufacturing businesses operate. In the manufacturing sector, the 4IR may change the design; manufacturing; operations; services, products, and production systems; connectivity; and the interaction among parts, machines, and people. While the 4IR technologies may have many benefits, owing to innovation and technological progress, the manufacturing SMEs require their challenges to be addressed before they may benefit from 4IR technologies. To the best of the knowledge of the researchers, there is no conceptual 4IR manufacturing framework, specifically for a developing economy, which is necessary for addressing these challenges and the opportunities promised by the new industry. This research, therefore, intends to fill this gap by developing a conceptual 4IR framework to assist South African manufacturing SMEs in addressing some of these challenges. Following a comprehensive literature review, components of the 4IR and challenges in the manufacturing industry are elucidated, aimed at defining a set of qualitative propositions as our instrument to develop a conceptual framework for embedding 4IR technologies and opportunities in the manufacturing industry. Further aspects of the framework enable businesses to gain a competitive advantage and sustainable business performance. Future work in this area will validate the framework among stakeholders in the manufacturing industry within the context of a developing economy.

Research Published in Management International Review from 2006 to 2020: A Bibliometric Analysis and Future Directions

The Management International Review (MIR) celebrated its 60th anniversary in 2020. In commemoration of this event, we use a bibliometric analysis to present a retrospective on the journal by analyzing its content for the years between 2006 and 2020. We find that the collaboration culture in MIR has risen over time with the increase in the median size of author teams. Moreover, the collaboration network has become more global over time. The methodology used in the journal is predominantly empirical and quantitative with archival data sources most commonly used. The bibliographic coupling of the MIR corpus reveals that the major themes in the journal revolve around "culture," "emerging economies," "innovation, knowledge transfer, and absorptive capacity," "internationalization process," "culture and entry modes," and "internationalization and performance." A comparison with other leading international business journals provides distinct pathways in which MIR may continue to grow. Finally, it is important to note that while the share of conceptual studies has decreased significantly in the last 15 years, the MIR editors want to see more novel and theoretically grounded conceptual articles in the journal.

Clarifying the boundary conditions of value creation within dynamic capabilities framework: a grafting approach

This study extends dynamic capabilities research by examining the underlying and fundamental concepts of capabilities, resource allocation, fungibility, and environmental change with respect to value creation and appropriation (VCA). Scholars generally assume that VCA depends on the amount of resources allocated to generate future capabilities. We diverge from this ability-performance tautology and instead ground dynamic capabilities in a resource allocation framework. By introducing two boundary conditions, we suggest that environmental change and fungibility between current and dynamic capabilities determine whether resource allocation leads to VCA. We believe that our findings not only represent a fruitful path for future research by strategy and organization scholars, but also provide an important contribution to our knowledge of managing resources in dynamic environments to create future capabilities.

Improving productivity of a financial firm: business model evolution in the Caribbean

Purpose

This study explores the role of business model as a state variable during transformation of a financial institution to become a multinational enterprise. Prior studies of the Uppsala model overlooked business model evolution for cross-border productivity and performance.

Design/methodology/approach

The research design employs the resource-based view for an in-depth case study of JMMB, a family-managed Jamaica-based financial firm, using data from primary and secondary sources, covering the period 1992 to 2014.

Findings

JMMB's business model was the channel through which resources and capabilities gave rise to an innovative product for successful positioning in an international network. This was augmented by strong family orientation toward customer service, a distinctive asset that shaped the nature and trajectory of the business model. Cross-border alliancing and risk management were crucial dynamic capabilities for replicating the business model in foreign markets.

Research limitations/implications

While the observations are not generalizable to other firms, they indicate that a business model is a key unit of analysis for understanding how the firm makes the transition to become a multinational enterprise.

Practical implications

Financial institutions may internationalize in a small island, developing stages through a strategy of focused product differentiation based on disruptive innovation with cross-border partnerships for ease of market entry and experiential learning.

Social implications

The research has identified opportunities for effective and efficient work methods in pursuit of productivity gains.

Originality/value

The study is the first to illustrate business model as a state variable in the Uppsala model of multinational enterprise evolution for a financial firm.

Theoretical foundations of antecedents of internationalization and moderators in multinationality–performance relationship

Purpose

In this paper, the authors undertake a systematic analysis of multinationality–performance (M-P) literature published in the last decade, when antecedents for internationalization and moderators of the M-P relationship had attained a center stage in international business and international management research. Though M-P relationship is one of the most widely studied topics within international business literature, so far synthesis of the entire theoretical landscape is missing in extant literature.

Design/methodology/approach

Through keywords search process, the authors found 111 studies in management literature that look at internationalization, its antecedents, performance of internationalized firms, and moderators of the M-P relationship. The focus of this study is to identify theoretical foundations used to explain the antecedents and moderators in M-P relationship, in order to suggest the future research direction for the field. The authors classify the antecedents and moderators based on their theoretical underpinnings not only to identify commonly used theoretical foundations in the last 10 years of international strategy research but also to highlight potential areas for future research.

Findings

The authors’ analysis indicates that research on international strategy in the last decade was dominated by theory testing in the context of developed economies. The authors’ review suggests that majority of the antecedents and moderators in the M-P relationship are anchored within institutional theory, organizational structure, resource-based view, social capital, and upper echelon theory.

Originality/value

The authors’ findings are indicative of a rich research potential of M-P relationship in the contextual research setting of emerging markets while leveraging more diversified theoretical bases and multiple levels of research design.

Effect of firm’s diverse experiences on its alliance portfolio diversity: Evidence from India

This study examines the effect of diverse experiences on a firm’s alliance portfolio diversity (APD). Drawing on the organizational learning perspective, it argues that a firm’s learning from diverse experiences enables it to reap the benefits and mitigate the risks of high level of APD. Thus, an experienced firm may choose to form or maintain relationships with diverse partners to get the intended benefits of APD. In particular, the study hypothesizes that a focal firm’s product and international diversification experience, alliance experience, and alliance experience heterogeneity are positively associated with its APD. A longitudinal investigation of 90 Indian firms, for the period 2004–2014, provides support for all the hypothesized relationships. In general, findings, which are robust to multiple estimation methods, suggest that a firm’s diverse experiences influence its APD. Findings of this study contribute to the alliance portfolio and organizational learning literature by examining the experiential antecedents of APD.

The effect of global dynamic capabilities on internationalizing SMEs performance

Purpose

Based on a dynamic capability (DC) view, the purpose of this paper is to explore whether market orientation (MO) (external) and learning orientation (LO) (internal) facilitate internationalizing small- and medium-sized enterprises’ (ISMEs) global dynamic capabilities (GDCs) – i.e., their global marketing and product-design capabilities – and promote firm performance.

Design/methodology/approach

Empirical data are randomly selected from Taiwanese ISMEs, yielding 206 valid responses. Informants’ (CEOs, vice presidents, senior managers) knowledge about and shouldering of firm responsibilities are explored.

Findings

A significant increase in global marketing and product-design capabilities is found to affect firm performance. MO and LO positively influence GDCs, which increase firm performance. Furthermore, LO and MO support GDCs’ development.

Research limitations/implications

The sample is reasonably diverse in terms of demographics including firm location, size, industry, and market type. Disaggregation results are generally robust regarding model parameters. However, future research should target different countries to assess result generalizability.

Practical implications

The findings reveal two practical implications for managers. First, successful GDCs help firms spread the costs of designing products or components across many contexts and to offer appealing products to consumers worldwide. Second, it is important that managers foster development of MOs and LOs.

Originality/value

The study contributes to the literature in two ways. First, by conceptualizing GDCs of ISMEs, DC literature is expanded based on a global context. Second, the complexity of extending DC literature into ISMEs may arise from the fact that ISMEs, as separate and living entities, devise their own organizational culture, which significantly affects their GDC development.

A Process Model of Dynamic Capability Development: Evidence from the Chinese Manufacturing Sector

Based on longitudinal case studies of manufacturing strategy and implementation at two Chinese manufacturing firms, this paper investigates how these firms develop, manage, and deploy dynamic capabilities to renew their resource bases in order to respond to the operational challenges associated with radical technological development. Our analysis suggests that dynamic capability development is not simply about renewing one specific type of capability, but rather, it is a meta-capability to learn how to repeatedly renew the firm's overall capability set as a fully integrated package. We further highlight the importance of looking beyond the property of the firm to understand the network level of capability development, including the capabilities of the firm's partners. This is particularly salient in the context of smart manufacturing where a high level of connectivity among a broader network of partners is required to reap the benefits generated by new technological advances. Our findings provide an important contribution to our knowledge of dynamic capability development in emerging economies in the era of digitalized manufacturing.

Dynamic capabilities: towards an organizing framework

Purpose

The purpose of this paper is to stimulate, shape and extend current discourse on the relevance of dynamic capabilities on firm competitiveness.

Design/methodology/approach

The authors delineate current debates on dynamic capabilities and synthesize them to develop some propositions and a heuristic framework to guide future research on dynamic capabilities as a strategic management construct.

Findings

The theoretical and methodological complexities involved in mapping the routines and processes’ underpinning dynamic capabilities has led to conceptual discrepancies, which in turn impede the understanding of the relevance and contribution of dynamic capabilities to competitiveness. Measuring dynamic capabilities remains the biggest barrier to progress in developing directions for theory and research in this area.

Practical implications

Stimulating and shaping the current discourse on the relevance of dynamic capabilities on competitiveness, the proposed integrated framework as a heuristic device can be to gauge the a firm’s dynamic capabilities vis-à-vis their competitors.

Originality/value

The authors propose a framework built around the inter-relationships of capabilities and hierarchies of capabilities to extend the understanding of how dynamic capabilities can be developed relative to a firm’s ability and embedded context.

Developing dynamic capabilities for learning and internationalization

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.

Innovation and dynamic capabilities in a traditional service sector

Purpose

The purpose of this paper is to analyse the types and the nature of innovations developed by small companies in a traditional service sector, as well as the ways that innovations impact their strategic capabilities.

Design/methodology/approach

The paper provides evidence from three case studies captured through a number of interviews with senior managers within the companies. The paper adopted a comparative analysis, selecting two cases that have managed this process with great success and one showing evidently less success.

Findings

Organisational and process innovations are critical aspects of a dynamic strategy in small service companies. Although a successful innovation strategy does not require the development of technological systems and knowledge intensive services, it does necessitate their sophisticated usage. Innovation enables the firms to access new markets and the reconfiguration of strategic capabilities in the long term.

Research limitations/implications

The paper identifies the existence of strong linkages between organisational and process innovation and dynamic capabilities in the small companies in a traditional service sector. The research has used qualitative methods and a case study methodology. Further research (e.g. other service industries) and ideally statistical evidence are required to generalise these findings into the wider service sector.

Practical implications

This work calls for managers in small companies in a traditional service sector which wish to grow to pay more attention to their active involvement in organisational and process innovations and the sophisticated usage (or development) of knowledge intensive services.

Originality/value

The paper brings together a number of concepts from the innovation studies and the strategic management literature to investigate management practices and strategies of small companies in a traditional service sector, the tramp shipping sector.