Technological driver
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Development capability (DC)Any firm's ability to interpret the current state-of-the-art, absorb, and eventually transform a given technology to create or change its operations capacity; and any other capability aiming to reach higher levels of technical-economic efficiency. |
Ability to design its own productsMonitoring of latest tendencies in technology in the sectorUse of formal product management methods (Stage-Gate, PMBOK, innovational funnel, etc.) Ability to adapt the technology in use to its own needs Ability to prototype of own products Development of products in partnerships with science and technology institutionsAbility to launches its own products |
Lall (1992)Lall, S., 1992. Technological capabilities and industrialization. World Development, 20(2), 165-186. doi:10.1016/0305-750X(92)90097-F https://doi.org/10.1016/0305-750X(92)900...
; Bell and Pavitt (1995)Bell, M., & Pavitt, K. (1995). The development of technological capabilities: Trade, technology and international competitiveness. Economic Development Institute of the World Bank, 22(4831) 69-100.; Saphia et al. (2016); Teece et al. (1997)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
; Teece (2007)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
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Teece et al. (1997)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
comment regarding the observation of rate and direction, which relevant scientific frontiers are pointing to, and how the firm can learn and reconfigure its technological path. The dynamic capability framework emphasizes the ability to sense technological and market opportunities by “scanning, creating, learning, and interpreting” technological and market signals (Teece, 2007Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
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Operations capability (OC)The ability to perform to the given productive capacity through the collection of daily routines that are embedded in knowledge, skills, and technical systems at a given time. |
Use of formalizes PPC procedures Use of statistical control of processes Use of leading edge technology in the sector Ability to maintain of adequate stock of materials for processes Ability to conduct the production process as programmed Ability to establishment production routines that do not generate rework Ability to promptly deliver the product Ability to manage the expansion of the installed capacity whenever necessary Ability to ensure the process does not lead to products' return |
Hayes and Pisano (1994)Hayes, R. H., & Pisano, G. P. (1994). Beyond world-class: The new manufacturing strategy. Harvard Business Review. Retrieved from https://hbr.org/
https://hbr.org/...
; Ward et al. (1998)Ward, P., McCreery, J., Ritzman, L., & Sharma, D. (1998). Competitive priorities in operations management. Decisions Science, 29(4), 1035-1046. doi:10.1111/j.1540-5915.1998.tb00886.x https://doi.org/10.1111/j.1540-5915.1998...
; Skinner (1969)Skinner, W. (1969). Manufacturing: Missing link in corporate strategy. Harvard Business Review, 47(3). Retrieved from https://hbr.org/
https://hbr.org/...
; Teece et al. (1997)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
; Teece (2007)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
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Teece et al. (1997)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
describe factors of production and resources, and routines and processes as elements of the framework; however, in a globalized economy this may not necessarily be conducted inside the same firm that developed the solutions. Operations are heavily routine-based, and are often not considered a dynamic capability. As Teece (2007)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
argues, the adoption of “best practices” are not likely a dynamic capability, and especially if they are widely adopted by other firms. |
Business driver
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Management capability (MC)The firm's ability to transform the technological outcome into a coherent operational and transactional arrangement. |
Use of formally defines its strategic aims annuallyUse of technology to integrate all its sectorsUse of internal standards and documents for work proceduresUpdated management tools and techniquesMaintenance of adequately trained personnel for the company's functions Use of modern financial management practices |
Penrose (1959); Mintzberg (1973)Penrose, E. (1959). The theory of the growth of the firm. New York, USA: Oxford University Press.; Chandler (1977)Chandler, A. D., Jr. (1977). The visible hand. Cambridge, USA, and London, England: The Belknap Press of Harvard University Press.; Zawislak et al. (2012Zawislak, P. A, Alves, A. C., Tello-Gamarra, J., Barbieux, D., & Reichert, F. M. (2012). Innovation capability: From technology development to transaction capability. Journal of Technology Management & Innovation, 7(2), 14-27. doi:10.4067/S0718-27242012000200002 https://doi.org/10.4067/S0718-2724201200...
, 2013)Zawislak, P. A, Alves, A. C., Tello-Gamarra, J., Barbieux, D., & Reichert, F. M. (2013). Influence of internal capabilities of firms on their innovation performance: A case study investigation in Brazil. International Journal of Management, 30(1), 329-348.; Teece et al. (1997)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
; Teece (2007)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
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Teece et al. (1997)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
perceive management as playing three roles: coordination and integration (static), learning (dynamic), and reconfiguration (organization and managerial processes). Eisenhardt and Martin (2000)Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10-11), 1105-1121. doi:10.1002/1097-0266(200010/11)21:10/11<1105::aid-smj133>3.0.co;2-e https://doi.org/10.1002/1097-0266(200010...
view dynamic capabilities as essentially organizational processes. Teece (2007)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
observes that management is important dynamic capability in the task of identifying, developing, and utilizing a combination of specialized and co-specialized assets, whether built or bought. Teece (2007)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
calls for entrepreneurial management. |
Transaction capability (TC)The ability to reduce marketing, outsourcing, bargaining, logistics, and delivering costs; in other words, transactional costs. |
Conduction of formal research to monitor the marketAbility to impose its negotiating terms on its suppliersAbility to impose its prices on the marketAbility to impose its negotiating terms on its customersConduction of research to measure its customers' satisfactionUse of formal criteria to select its suppliers |
Coase (1937)Coase, R. (1937). The nature of the firm. Economica, 4(16), 386-405. doi:10.1111/j.1468-0335.1937.tb00002.x https://doi.org/10.1111/j.1468-0335.1937...
; Williamson (1985)Williamson, O. (1985). The economic institutions of capitalism. New York, USA: Free Press.; Cannon and Hamburg (2001)Cannon, J., & Homburg, C. (2001). Buyer-supplier relationships and customer firm costs. Journal of Marketing, 65(1), 29-43. doi:10.1509/jmkg.65.1.29.18136 https://doi.org/10.1509/jmkg.65.1.29.181...
; Kotabe et a. (2002)Kotabe, M., Srinivasan, S. S., & Aulakh, P. (2002). Multinationality and firm performance: The moderating role of R&D and marketing capabilities. Journal of International Business Studies, 33(1), 79-97.; Mayer and Salomon (2006)Mayer, K., & Salomon, R. (2006). Contract design as a firm capability: An integration of learning and transaction cost perspectives. Academy of Managerial Review, 49(5), 942-959.; Zawislak et al. (2012Zawislak, P. A, Alves, A. C., Tello-Gamarra, J., Barbieux, D., & Reichert, F. M. (2012). Innovation capability: From technology development to transaction capability. Journal of Technology Management & Innovation, 7(2), 14-27. doi:10.4067/S0718-27242012000200002 https://doi.org/10.4067/S0718-2724201200...
, 2013)Zawislak, P. A, Alves, A. C., Tello-Gamarra, J., Barbieux, D., & Reichert, F. M. (2013). Influence of internal capabilities of firms on their innovation performance: A case study investigation in Brazil. International Journal of Management, 30(1), 329-348.; Teece et al. (1997)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
; Teece (2007)Teece, D., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic managerial. Strategic Managerial Journal, 18(7), 509-533. doi: 10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z https://doi.org/10.1002/(sici)1097-0266(...
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A key aspect to define firms' position involves deciding where to position organizational boundaries. Market structures continuously change; therefore, the task of positioning is dynamic. Reputational assets must be built and strengthened, which contributes to market power. |
Innovation performance (IP)
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The new products, processes, equipment, organizational forms, and commercial market approaches that lead to extraordinary profits. |
Growth in net profits over the last three yearsGrowth in company's market share has over the last three yearsGrowth in company's revenue over the last three years |
Schumpeter (1934)Schumpeter, J. A. (1934). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle (Vol. 55). Piscataway, USA: Transaction Publishers.; Francis and Bessant (2005)Francis, D., & Bessant, J. (2005). Targeting innovation and implications for capability development. Technovation, 25(3), 171-183. doi:10.1016/j.technovation.2004.03.004 https://doi.org/10.1016/j.technovation.2...
; OECD (2005)Organisation for Economic Co-operation and Development. (2005). Oslo Manual: Guidelines for collecting and interpreting innovation data, 3rd Edition, OECD Publishing, Paris, France. doi:10.1787/9789264013100-en https://doi.org/10.1787/9789264013100-en...
; Eriksson (2014)Eriksson, T. (2014). Processes, antecedents and outcomes of dynamic capabilities. Scandinavian Journal of Management, 30(1), 65-82. doi:10.1016/j.scaman.2013.05.001 https://doi.org/10.1016/j.scaman.2013.05...
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Schumpeter argues that innovation leads to extraordinary profits (or rents). Teece et al. (1997)Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi:10.1002/smj.640 https://doi.org/10.1002/smj.640...
asserts that dynamic capabilities seek the generation of Schumpeterian rents that come from innovation. “The goal of dynamic capabilities is to generate abnormal returns” (Teece, 2010Teece, D. J. (2010). Technological innovation and the theory of the firm: The role of enterprise-level knowledge, complementarities, and (dynamic) capabilities. Handbook of the Economics of Innovation, 1, 679-730., p. 692). |