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?

This paper draws on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability. Dynamic capabilities enable business enterprises to create, deploy, and protect the intangible assets that support superior long- run business performance. The microfoundations of dynamic capabilities—the distinct skills, processes, procedures, organizational structures, decision rules, and disciplines—which undergird enterprise-level sensing, seizing, and reconfiguring capacities are difficult to develop and deploy. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions. The framework advanced can help scholars understand the foundations of long-run enterprise success while helping managers delineate relevant strategic considerations and the priorities they must adopt to enhance enterprise performance and escape the zero profit tendency associated with operating in markets open to global competition. Copyright  2007 John Wiley & Sons, Ltd.

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Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance

Co-Planar Stereotaxic Atlas of the Human Brain—3-Dimensional Proportional System: An Approach to Cerebral Imaging, J. Talairach, P. Tournoux. Georg Thieme Verlag, New York (1988), 122 pp., 130 figs. DM 268

Defining ordinary or ‘zero-level’ capabilities as those that permit a firm to ‘make a living’ in the short term, one can define dynamic capabilities as those that operate to extend, modify or create ordinary capabilities. Logically, one can then proceed to elaborate a hierarchy of higher-order capabilities. However, it is argued here that the strategic substance of capabilities involves patterning of activity, and that costly investments are typically required to create and sustain such patterning—for example, in product development. Firms can accomplish change without reliance on dynamic capability, by means here termed ‘ad hoc problem solving.’ Whether higher-order capabilities are created or not depends on the costs and benefits of the investments relative to ad hoc problem solving, and so does the ‘level of the game’ at which strategic competition effectively occurs. Copyright © 2003 John Wiley & Sons, Ltd.

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Understanding dynamic capabilities

Emotion and Adaptation

Business insight (A special report) --- Mergers and acquisitions: The secrets of successful acquisitions

Drawing upon the knowledge-based view of the firm and transaction cost theory, this paper combines experience accumulation and governance design arguments to examine the performance of high-tech alliances. We differentiate three alliance experience trajectories – partner-specific experience (i.e., prior alliances with the same partner), technology-specific experience (i.e., prior alliances in similar product areas), and general collaborative experience – and suggest that experience accumulation at the parent firm level and governance design at the alliance level jointly influence the odds of alliance success. Based on a sample of 144 biotechnology alliances, we examine the extent to which these alliances result in knowledge accumulation, create new opportunities, and enable parent firms to achieve their objectives. We find that only partner-specific experience has a positive impact on alliance performance, and that this effect is due to the interaction between partner-specific experience and the alliance’s governance design. The development of inter-firm routines can enhance the effectiveness of partnerships, particularly non-equity alliances lacking formal coordination and control mechanisms.

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Experience trajectories, governance design, and the performance of high-tech alliances

The effect of national culture on corporate social responsibility

This document is the accepted version of an article in the International
Journal of Finance, vol. 25, no. 2 (2013), pp. 7709–7738.

Maurizio Zollo

Papers

Business insight (A special report) --- Mergers and acquisitions: The secrets of successful acquisitions

Experience trajectories, governance design, and the performance of high-tech alliances

The effect of national culture on corporate social responsibility

Can Firms Learn to Acquire

A stakeholder-based view of strategic alliances