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The impact of dynamic capabilities and market orientation on firm performance: a case study of higher education consulting firms

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  • Chiarelli, Andrea

    (Research Consulting Limited. The Ingenuity Centre. University of Nottingham Innovation Park)

Abstract

Dynamic capabilities (DC) and market orientation (MO) have been described as affecting firm performance, particularly in the case of fast-changing markets. They have been analysed for a wide range of firm sizes, but research on DC in the context of sole traders and micro enterprises is scarce. To begin filling this gap, this research focuses on the effects of DC and MO on firm performance in the case of sole traders, micro and small enterprises (MSEs), using higher education (HE) consulting as a case study. HE consulting was chosen as it is comprised of numerous sole traders and MSEs and it is subjected to significant and continual change. Using a survey completed by 60 MSEs based in the UK, Europe and North America, this research found that the sensing capability is a significant determinant of firm performance, alongside what this study defines as operational MO. Furthermore, operational MO was found to significantly moderate the relationship between the learning capability and firm performance. This work suggests that (i) research on DC should be extended to sole traders and MSEs; and (ii) the business literature is ripe for a growing body of applied work on DC going beyond their theoretical validation and looking to develop practical recommendations for firms in different industry sectors.

Suggested Citation

  • Chiarelli, Andrea, 2021. "The impact of dynamic capabilities and market orientation on firm performance: a case study of higher education consulting firms," Small Business International Review, Asociación Española de Contabilidad y Administración de Empresas - AECA, vol. 5(1), pages 312-312, January.
    • Handle: RePEc:aaz:sbir01:sbir01:v:5:y:2021:i:1:p:e312
    DOI: 10.26784/sbir.v5i1.312
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    References listed on IDEAS

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    3. David J. Teece, 2019. "A capability theory of the firm: an economics and (Strategic) management perspective," New Zealand Economic Papers, Taylor & Francis Journals, vol. 53(1), pages 1-43, January.
    4. Cepeda, Gabriel & Vera, Dusya, 2007. "Dynamic capabilities and operational capabilities: A knowledge management perspective," Journal of Business Research, Elsevier, vol. 60(5), pages 426-437, May.
    5. Lorraine Uhlaner & André Stel & Valérie Duplat & Haibo Zhou, 2013. "Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth," Small Business Economics, Springer, vol. 41(3), pages 581-607, October.
    6. David J. Teece, 2012. "Dynamic Capabilities: Routines versus Entrepreneurial Action," Journal of Management Studies, Wiley Blackwell, vol. 49(8), pages 1395-1401, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    dynamic capabilities (DC); firm performance; market orientation (MO); consulting; higher education (HE);
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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