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.

/pdf/dynamic-capabilities-and-strategic-management-4iyi34iyh6.pdf

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.

/pdf/dynamic-capabilities-what-are-they-3cn0mb9rpo.pdf

Dynamic capabilities, what are they?

Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output The dominant logic focused on tangible resources, embedded value, and transactions Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships The authors believe that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators

/pdf/evolving-to-a-new-dominant-logic-for-marketing-bnlxqi06a2.pdf

Evolving to a New Dominant Logic for Marketing

Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

https://memberfiles.freewebs.com/84/90/65819084/documents/TOWARD%20A%20KNOWLEDGE-BASED%20THEORY%20OF%20THE.pdf

Toward a Knowledge-Based Theory of the Firm

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

This paper gives a fresh account of competition in the digital economy. Economic analysis in the field of industrial organization remains largely focused on a sophisticated version of the Schumpeter-Arrow debate, which is unresolved and largely irrelevant. We posit the need to look at competition anew. Static models of monopoly firms and markets in equilibrium are often used to characterize Big Tech firms’ size and scope. We suggest that this characterization is inappropriate because the growth and diversification of many digital firms lead to a situation of broad-spectrum competition that cuts across markets. Current market positions do not reflect monopoly power but are vulnerable to the competitive pressure of disequilibrating forces arising from the use of data-driven operating models, astute resource orchestration, and the exercise of dynamic capabilities. A few strategic errors by management in handling internal transitions and/or external challenges and big tech firms could be competitively impaired. The implications of a more dynamic understanding of the competition process in the digital economy are explored. We consider how big data and entrepreneurial management impacts firm performance. We also explore the nature of different types of rents (Schumpeterian, Ricardian, and monopoly rents) and suggest a modified long-term consumer welfare standard for competition policy. We formulate preliminary tests and predictors to assess dynamic competition. Our perspective advances a policy stance that favors innovation.

/pdf/innovating-big-tech-firms-and-competition-policy-favoring-30yw8y8yru.pdf

Innovating Big Tech firms and competition policy: favoring dynamic over static competition

The following sections are included:Monopoly vs. Efficiency Interpretations of the Multinational EnterpriseHost-Country ControlsDynamic ConsiderationsConclusionREFERENCES

Multinational Enterprise, Internal Governance, and Industrial Organization

I. PERSPECTIVES 1. Alfred Chandler's Managerial Revolution 2. The Dynamics of Industrial Capitalism: Perspectives on Alfred Chandler's Scale and Scope 3. Alfred Chandler and 'Capabilities' Theories of Strategy and Management 4. The Chandlerian Corporation and the Theory of Innovative Enterprise II. STRATEGY 5. The Role of Professionals in the Chandler Paradigm 6. Management Innovation in Supply Chain: Appreciating Chandler in the Twenty-First Century 7. The Decision to Make or Buy a Critical Technology: Semiconductors at Ericsson, 1980-2010 III. ORGANIZATION 8. The Evolution of Science-Based Businesses: Innovating How We Innovate 9. Alfred Chandler and Knowledge Management within the Firm 10. The Rise and Decline of Managerial Development IV. FINANCE 11. Finance of Industrial Enterprise 12. The Hand of Management in Capital Allocation

Management innovation : essays in the spirit of Alfred D. Chandler, Jr.

This book presents for the first time a careful selection of David Teece’s most important writings on the theory of the firm and its implications for economic performance.

Economic Performance and the Theory of the Firm

/pdf/telecommunications-in-transition-unbundling-reintegration-5dw6fl7w5p.pdf

David J. Teece

Papers

Innovating Big Tech firms and competition policy: favoring dynamic over static competition

Multinational Enterprise, Internal Governance, and Industrial Organization

Management innovation : essays in the spirit of Alfred D. Chandler, Jr.

Economic Performance and the Theory of the Firm

Telecommunications in Transition: Unbundling, Reintegration, and Competition