IDEAS home Printed from https://ideas.repec.org/p/iim/iimawp/wp02084.html
   My bibliography  Save this paper

A Unified Theory of Capability Building: Need and Response

Author

Listed:
  • Dixit, M. R.
  • Karna, Amit
  • Sharma, Sunil

Abstract

Strategy literature is replete with isolated contributions to the jigsaw puzzle of building capabilities by firms. The isolation is primarily caused by the way resource-based view and capability literature has developed over time. There is a need to overcome this isolation and build a unified theory of capability building process which takes into account both internal as well as external perspective and explains it for new as well as established firms, successful as well as not so successful firms . We respond to this need with a unified theory that explains deliberate and emergent process of capability building by recognizing the independent and interdependent contributions of the firm and its external environment. The capability building process is characterized as a three phased process with different starting points for different categories of firms. The phases in capability building – Participative, Competitive, and Leadership – reflect the strategic intent of the firm and its position vis-à-vis the environment. Each phase in the process witnesses capability building through an interaction between internal firm dynamics and corresponding external environmental forces. The theory encompasses the evolution of capabilities not only by exploiting the opportunities but also by overcoming the external constraints and the rigidities inherent in the capability. It incorporates context, processes, antecedents and consequences within each stage and across different stages. It answers important questions like why firms are different in terms of their capability building approach. The theory is unique as it unearths the unexplored process of capability building with a holistic and temporal perspective.

Suggested Citation

  • Dixit, M. R. & Karna, Amit & Sharma, Sunil, 2008. "A Unified Theory of Capability Building: Need and Response," IIMA Working Papers WP2008-01-10, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:wp02084
    as

    Download full text from publisher

    File URL: https://www.iima.ac.in/sites/default/files/rnpfiles/2008-01-10Dixit.pdf
    File Function: English Version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    2. Ramiro Montealegre, 2002. "A Process Model of Capability Development: Lessons from the Electronic Commerce Strategy at Bolsa de Valores de Guayaquil," Organization Science, INFORMS, vol. 13(5), pages 514-531, October.
    3. Sidney G. Winter, 2000. "The Satisficing Principle in Capability Learning," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 981-996, October.
    4. Richard S. Rosenbloom, 2000. "Leadership, Capabilities, and Technological Change: The Transformation of NCR in the Electronic Era," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1083-1103, October.
    5. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    6. Dosi, Giovanni, 1993. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 22(2), pages 102-103, April.
    7. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    8. Sidney G. Winter, 2003. "Understanding dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 991-995, October.
    9. Thomas Keil, 2004. "Building External Corporate Venturing Capability," Journal of Management Studies, Wiley Blackwell, vol. 41(5), pages 799-825, July.
    10. Sendil K. Ethiraj & Prashant Kale & M. S. Krishnan & Jitendra V. Singh, 2005. "Where do capabilities come from and how do they matter? A study in the software services industry," Strategic Management Journal, Wiley Blackwell, vol. 26(1), pages 25-45, January.
    11. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    12. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    13. Daniel M.G. Raff, 2000. "Superstores and the evolution of firm capabilities in American bookselling," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1043-1059, October.
    14. Steven Klepper & Kenneth L. Simons, 2000. "Dominance by birthright: entry of prior radio producers and competitive ramifications in the U.S. television receiver industry," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 997-1016, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sharma, Sunil, 2015. "Relevance of Resource Based View Themes for Capability Evolution," IIMA Working Papers WP2015-03-30, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Andrew A. King & Christopher L. Tucci, 2002. "Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities," Management Science, INFORMS, vol. 48(2), pages 171-186, February.
    3. Giovanni Gavetti, 2012. "PERSPECTIVE—Toward a Behavioral Theory of Strategy," Organization Science, INFORMS, vol. 23(1), pages 267-285, February.
    4. Giovanni. Gavetti & Daniel A. Levinthal, 2004. "50th Anniversay Article: The Strategy Field from the Perspective of Management Science: Divergent Strands and Possible Integration," Management Science, INFORMS, vol. 50(10), pages 1309-1318, October.
    5. Giovanni Gavetti, 2005. "Cognition and Hierarchy: Rethinking the Microfoundations of Capabilities’ Development," Organization Science, INFORMS, vol. 16(6), pages 599-617, December.
    6. Corinne A. Coen & Catherine A. Maritan, 2011. "Investing in Capabilities: The Dynamics of Resource Allocation," Organization Science, INFORMS, vol. 22(1), pages 99-117, February.
    7. O'Reilly, Charles A., III & Tushman, Michael, 2007. "Ambidexterity as a Dynamic Capability: Resolving the Innovator's Dilemma," Research Papers 1963, Stanford University, Graduate School of Business.
    8. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    9. Mehmet Ali Köseoglu & John A. Parnell & Melissa Yan Yee Yick, 2021. "Identifying influential studies and maturity level in intellectual structure of fields: evidence from strategic management," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(2), pages 1271-1309, February.
    10. Kotabe, Masaaki & Jiang, Crystal Xiangwen & Murray, Janet Y., 2011. "Managerial ties, knowledge acquisition, realized absorptive capacity and new product market performance of emerging multinational companies: A case of China," Journal of World Business, Elsevier, vol. 46(2), pages 166-176, April.
    11. Bruce Rasmussen, 2010. "Innovation and Commercialisation in the Biopharmaceutical Industry," Books, Edward Elgar Publishing, number 13680.
    12. Nicolaï Foss & Nils Stieglitz, 2012. "Modern Resource-based Theory(ies)," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 20, Edward Elgar Publishing.
    13. J. P. Eggers & Sarah Kaplan, 2009. "Cognition and Renewal: Comparing CEO and Organizational Effects on Incumbent Adaptation to Technical Change," Organization Science, INFORMS, vol. 20(2), pages 461-477, April.
    14. Reha Karadag & Laura Poppo, 2023. "Strategic resource decay," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1534-1561, June.
    15. Ansari, Shahzad (Shaz) & Krop, Pieter, 2012. "Incumbent performance in the face of a radical innovation: Towards a framework for incumbent challenger dynamics," Research Policy, Elsevier, vol. 41(8), pages 1357-1374.
    16. Suresh Malodia & Shaphali Gupta & Anand Kumar Jaiswal, 2020. "Reverse innovation: a conceptual framework," Journal of the Academy of Marketing Science, Springer, vol. 48(5), pages 1009-1029, September.
    17. Gary P. Pisano, 2017. "Toward a prescriptive theory of dynamic capabilities: connecting strategic choice, learning, and competition," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(5), pages 747-762.
    18. Makkonen, Hannu & Pohjola, Mikko & Olkkonen, Rami & Koponen, Aki, 2014. "Dynamic capabilities and firm performance in a financial crisis," Journal of Business Research, Elsevier, vol. 67(1), pages 2707-2719.
    19. Björn Michaelis & Shalini Rogbeer & Lars Schweizer & Zafer Özleblebici, 2021. "Clarifying the boundary conditions of value creation within dynamic capabilities framework: a grafting approach," Review of Managerial Science, Springer, vol. 15(6), pages 1797-1820, August.
    20. Ilgaz Arikan & Ipek Koparan & Asli M Arikan & Oded Shenkar, 2022. "Dynamic capabilities and internationalization of authentic firms: Role of heritage assets, administrative heritage, and signature processes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 601-635, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iim:iimawp:wp02084. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/eciimin.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.