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.

/pdf/explicating-dynamic-capabilities-the-nature-and-48rcozomaz.pdf

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

This paper examines the nature of the core capabilities of a firm, focusing in particular on their interaction with new product and process development projects. Two new concepts about core capabilities are explored here. First, while core capabilities are traditionally treated as clusters of distinct technical systems, skills, and managerial systems, these dimensions of capabilities are deeply rooted in values, which constitute an often overlooked but critical fourth dimension. Second, traditional core capabilities have a down side that inhibits innovation, here called core rigidities. Managers of new product and process development projects thus face a paradox: how to take advantage of core capabilities without being hampered by their dysfunctional flip side. Such projects play an important role in emerging strategies by highlighting the need for change and leading the way. Twenty case studies of new product and process development projects in five firms provide illustrative data.

https://www.jstor.org/stable/pdfplus/2486355.pdf

Core capabilities and core rigidities: a paradox in managing new product development

http://www.bmcommunity.sitew.com/fs/Root/8jig8-businessmodelsbusinessstrategy.pdf

Business Models, Business Strategy and Innovation

Investigates the patterns of technological evolution and their impact on environmental conditions. Seven hypotheses are offered in order to demonstrate that technology is a central force in shaping the environments within which organizations operate. These hypotheses are: (1) technological change within a product class will be characterized by long periods of incremental change punctuated by discontinuities; (1a) technological discontinuities are either competence enhancing (build on existing skills and know-how) or competence destroying (require fundamentally new skills and competences); (2) the locus of innovation will differ for competence destroying and competence-enhancing technological changes. Competence-destroying discontinuities will be initiated by new entrants, while competence-enhancing discontinuities will be initiated by existing firms; (3) competitive uncertainty will be higher after a technological discontinuity than before discontinuity; (4) environmental munificence (i.e., resource availability and support for growth) will be higher after a technological discontinuity than before the discontinuity; (5) competence-enhancing discontinuities will be associated with decreased entry-to-exit ratios and decreased interfirm sales variability (thus strengthening product leaders and increasing barriers to entry). These patterns will be reversed for competence-destroying discontinuities; (6) successive competence-enhancing discontinuities will be associated with smaller increases in uncertainty and munificence; and (7) those organizations that initiate major technological innovations will have higher growth rates than other firms in the product class. Data were collected from U.S. firms in three product classes, domestic scheduled passenger airline transport, Portland cement manufacture, and minicomputer manufacture, from the year of the niche market's inception through 1980. Results indicate that after the three niche openings, there were six competence-enhancing technological discontinuities and two competence-destroying discontinuities in total. Each of these discontinuities had a far greater impact on a key measure of cost or performance than more incremental technological events. In addition, except for the period following the introduction of semiconductor memory in minicomputers, the ability of experienced industry observers to predict demand following technological disruptions was far worse than prior to the disruption. Demand growth following the discontinuity was significantly higher than it was immediately prior to the discontinuity, which had an enormous impact on product-class demand. Also, the ratio of entries to exits was higher in each of the five years before a competence-enhancing discontinuity than during the five subsequent years, though none of the differences is statistically significant. Though market variability in sales growth was expected, it was found that some firms' sales grew explosively while other firms experienced sales declines. It is also suggested that as technology matures, successive competence-enhancing discontinuities increase both uncertainty and munificence, but not as much as those discontinuities that preceded them in establishing the product class. Finally, early adopters of technology were found to experience more growth than other firms. Using three different product types, with a wide range of years from inception, it is shown that technology does evolve through long periods of incremental change punctuated by relatively rare innovations that radically improve the state of the art. Although these incidences of change are rare, they stand out clearly and have significantly altered competitive environments. (SFL)

/pdf/technological-discontinuities-and-organizational-yqzhlxgbc2.pdf

Technological Discontinuities and Organizational Environments

https://repository.upenn.edu/cgi/viewcontent.cgi?article=1099&context=mgmt_papers

The Business Model: Recent Developments and Future Research

This paper explores the role of the business model in capturing value from early stage technology. A successful business model creates a heuristic logic that connects technical potential with the realization of economic value. The business model unlocks latent value from a technology, but its logic constrains the subsequent search for new, alternative models for other technologies later on—an implicit cognitive dimension overlooked in most discourse on the topic. We explore the intellectual roots of the concept, offer a working definition and show how the Xerox Corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day. We then show the long shadow that this model cast upon Xerox’s later management of selected spin-off companies from Xerox PARC. Xerox evaluated the technical potential of these spin-offs through its own business model, while those spin-offs that became successful did so through evolving business models that came to differ substantially from that of Xerox. The search and learning for an effective business model in failed ventures, by contrast, were quite limited.

/pdf/the-role-of-the-business-model-in-capturing-value-from-40dro16s1g.pdf

The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin‐off companies

Explaining the attacker's advantage: Technological paradigms, organizational dynamics, and the value network

This article deals with the diffusion and standardization rivalry between two similar but incompatible formats for home videocassette recorders (VCRs): the Betamax, introduced in 1975 by the Sony Corporation, and the VHS (Video Home System), introduced in 1976 by the Victor Company of Japan (Japan Victor or JVC). Despite being first to the home market, the Beta format fell behind the VHS in market share during 1978 and declined thereafter. By the end of the 1980s, Sony and its partners had ceased producing Beta models. This study analyzes the history of this rivalry and examines its context—a mass consumer market with a dynamic standardization process subject to “bandwagon” effects that took years to unfold and that were largely shaped by the strategic maneuvering of the VHS producers.

/pdf/strategic-maneuvering-and-mass-market-dynamics-the-triumph-43bo9epmgl.pdf

Strategic maneuvering and mass-market dynamics : the triumph of VHS over Beta

Scholars have advanced various theories to explain the common failure of market leaders in the face of revolutionary technological change. The history of NCR Corporation provides an instructive exception to that general pattern. This paper examines how NCR addressed the introduction of electronics to the field of business equipment and the advent of digital computers to widespread use. It describes NCR's entry into the computer industry in the 1950s and its commitment to evolutionary adaptation of its core products. It shows how persistence in old modes of practice led eventually to a crisis, which was resolved favorably when new management and fundamental organizational transformations reversed adverse trends and restored robust profitability.



While established academic theories can help to explain aspects of the story, no single theoretical perspective is sufficient to explain the path of NCR's behavior. NCR survived, we conclude, because new leadership provided the impetus to actualize latent dynamic capabilities. Copyright © 2000 John Wiley & Sons, Ltd.

Leadership, Capabilities, and Technological Change: The Transformation of NCR in the Electronic Era

This article examines a significant example of "technological pioneering"-the development of an emerging technology in pursuit of future comercial opportunity. In this case, the pioneer's efforts resulted in the birth of a major industry, the manufacture of videocassette recorders for the mass consumer market. The authors compare the actions of six firms that were pioneers in the development of this technology-two in the U.S. and four in Japan. Three firms-all Japanese-emerged in the late 1970s as the big winners in the growth of this new industry. However, this is not another case in which international differences in "competitiveness" were decisive. The real success story lies in the management practices of three pioneers, who just happened to be Japanese.

Richard S. Rosenbloom

Papers

The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin‐off companies

Explaining the attacker's advantage: Technological paradigms, organizational dynamics, and the value network

Strategic maneuvering and mass-market dynamics : the triumph of VHS over Beta

Leadership, Capabilities, and Technological Change: The Transformation of NCR in the Electronic Era

Technological Pioneering and Competitive Advantage: The Birth of the VCR Industry: