The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.

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Dynamic capabilities and strategic management

This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.

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Dynamic capabilities, what are they?

In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.

https://www.jstor.org/stable/pdfplus/259056.pdf

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

If The Machine That Changed the World is a description of the Toyota system in the industry of its origin, Lean Thinking is a generalization of the basic concepts so they can be applied to any company in any industry. The authors begin by summarizing the five inherent principles in any lean system: 1 correctly specify value so you are providing what the customer actually wants, 2 identify the value stream for each product family and remove the wasted steps that don't create value but do create muda (waste), 3 make the remaining value-creating flow continuously to drastically shorten throughput times, 4 allow customer to pull value from your rapid-response value streams as needed (rather than pushing products toward the customer on the basis of forecasts), and 5 never relax until you reach perfection, which is the delivery of pure value instantaneously with zero muda. (The first part of Lean Thinking devotes a chapter to each of these principles.) In the second part, the authors describe in detail how managers in a wide range of companies and industries - small, medium and large, North American, European and Japanese - transformed their business by applying the principles of lean thinking. Chapters are devoted to Pratt and Whitney, Wiremold, Lantech in North America, Porsche in Germany, and Showa Manufacturing in Japan. Lean Thinking has sold more than 300,000 copies in the English language hard-cover version alone, because it's an indispensable companion for every manager making the lean journey.

Lean thinking: banish waste and create wealth in your corporation (2nd, revised and updated ed.)

Fabio Arcangeli, Paul David, Frank Engelman, Christopher Freeman, Massimo Moggi, Richard Nelson, Luigi Orsenigo, Nathan Rosenberg, Michele Salvati, G. N. von Tunzelman, two anonymous referees, and the participants at the meeting of the Committee on Distribution, Growth, and Technical Progress of the Italian National Research Council (CNR), Rome, November 16, 1985, have helped with various redraftings. A particularly grateful acknowledgment is for the insightful and patient help of Moses Abramovitz. This work has been undertaken at the Science Policy Research Unit (SPRU), University of Sussex, as part of the research program of the Designated Research Centre, sponsored by the Economic and Social Research Council (ESRC). Earlier support to the research that led to this paper by the Italian National Research Council (CNR) is also gratefully acknowledged. The statistical research has been undertaken with the assistance of Stephano Brioschi, Ilaria Fornari, and Giovannu Prennushi.

https://www.jstor.org/stable/info/2726526

Sources, Procedures, and Microeconomic Effects of Innovation

This book is based on the Massachusetts Institute of Technology (MIT) 5-million-dollar 5-year study on the future of the automobile. Designated the International Motor Vehicle Program (IMVP), the MIT study explored the differences between mass production and lean production in the automobile industry. Lean production, pioneered by Eiji Toyoda and Taiichi Ohno at the Toyota Motor Company in Japan, combines the advantages of craft and mass production, while avoiding the high cost of the former and the rigidity of the latter. Toward this end, lean producers employ teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in enormous variety. Lean production (a term coined by IMVP researcher John Krafcik) is "lean" because it uses less of everything compared with mass production. Also, it requires keeping far less than half the needed inventory on site, results in many fewer defects, and produces a greater and ever growing variety of products. Lean production changes how people work. Most will find their jobs more challenging and will become more productive, but, at the same time, they may find their work more stressful. Lean production calls for learning far more professional skills (than in mass production) and applying these creatively in a team setting (rather than a rigid hierarchy). This book is organized in three sections. The first, "The Origins of Lean Production," traces the evolution of lean production. The second, "The Elements of Lean Production," looks at how lean production works in factory operations, product development, supply-system coordination, customer relations and as a total lean enterprise. Finally, in the third section, "Diffusing Lean Production," the authors examine how lean production is spreading across the world and to other industries and, in the process, is revolutionizing how people live and work. Also examined are the barriers that are preventing companies and countries from becoming lean. Creative ways leanness can be achieved are suggested.

The Machine That Changed the World

When James Womack, Daniel Jones, and Daniel Roos wrote THE MACHINE THAT CHANGED THE WORLD in 1990, Japanese automakers, and Toyota in particular, were making a strong showing by applying the principles of lean production. However, the full power of lean principles was unproven, and they had not been applied outside of the auto industry. Today, the power of lean production has been conclusively proved by Toyota's unparalleled success, and the concepts have been widely applied in many industries. Based on MIT's pioneering global study of industrial competition, THE MACHINE THAT CHANGED THE WORLD offers a groundbreaking analysis of the entire lean business system, including product development, supplier management, sales, service, and production - an analysis even more relevant today as GM and Ford struggle to survive and a wide range of British abd American companies embrace lean production. A new Foreword by the authors brings the story up to date and details how their predictions were right. As a result, this reissue of a classic is as insightful and instructive today as when it was first published.

The machine that changed the world : the story of lean production -- Toyota's secret weapon in the global car wars that is revolutionizing world industry

This volume carefully traces the rise of the Toyota system from its take-off point in Ford's mass production system to its spread across the world, starting with the NUMMI joint venture with General Motors in California and now advancing in Europe, Latin America, and East Asia as well. It then identifies and describes the advantages of this system, which needs less of everything including time, human effort, inventories, and investment to produce products with fewer defects in smaller volumes at lower costs for fragmenting markets. The Machine That Changed the World even gave the system its name: lean.In the decade since its launch in the fall of 1990, The Machine That Changed the World has sold more than 600,000 copies in 11 languages and has introduced a whole generation of managers and engineers to lean thinking. No lean library is complete without this groundbreaking book. "The fundamentals of this system are applicable to every industry across the globea[and] will have a profound effect on human society. It will truly change the world." - New York Times Paperback / 1990 / 323 pages

Daniel Roos

Papers

The Machine That Changed the World

The machine that changed the world : the story of lean production -- Toyota's secret weapon in the global car wars that is revolutionizing world industry

The machine that changed the world : the story of lean production

The machine that changed the world : based on the Massachusetts Institute of Technology 5-million dollar 5-year study on the future of the automobile

Die zweite Revolution in der Autoindustrie : Konsequenzen aus der weltweiten Studie aus dem Massachusetts Institute of Technology