2b) KBV & Dynamic Capabilities Flashcards
Teece 1997; 2007;2011
PURPOSE: Introduce D.C
“Unique competencies can’t be acquired , they must be built” (using D.C’s)
Draws on: Schumpeter, Penrose, & Barney
Claims that RBV can not explain how firms reconfigure resources in a “Schumperian world” (dynamic changing world). (I think RBV might actually explain this just not as eloquently as Teece has done. He could have framed D.Cs as a special type of “resource”.
- The strength of a firm’s D.C’s determines the speed/ degree to which the firm’s resources/competences can be realigned to match the opportunities/threats.
- Dynamic capabilities are also used to assess when and how the enterprise is to ally with other enterprises.
2007 ADDS:
• D.C’s are the only thing that can lead to SCA
o Porter model is “coping” with competition, whearas DCs create of new opportunities (Kim Blue Ocean Strategy).
2011:
D.C’s (1) Sensing (identification and assessment of an opportunity). entrepreneurial set of competences probing markets, managemers to build and “test” hypotheses about market (effectual process)
(2) Seizing (mobilization of resources)
(3) transforming (continued renewal)
CRITIQUE:
- empirical validation is still in its early stages (so far mostly case studies confirming the importance of D.Cs)
Eisenhardt (2000)
DEFN I like “The tools used to reconfigure resources”
- Distinguishes between high velocity markets (unpredictable non-linear change) and moderately dynamic industries (frequent change but relatively predictable).
- D.C’s can never lead to SCA (but can contribute to a temp Comp Advantage)
- D.Cs follow learning before doing (much like work from Saravathy, 2001)
MY CRITISICMS
1) It is hard not clear how industries change from H.V to M.D (what about sub-industries within each?)
2) I think D.Cs can lead to SCA.
Explain the connection between the RBV, D.C’s, the relational view, and the attention based view.
think through this.
Kim (2005)
Blue Ocean Strategy
- Compete in uncontested market space by making the competition irrelevant (using D.Cs)
- Introduced the Strategy Canvas (a framework for developing blue ocean strategies).
- 3 tiers of noncustomers (WW) (Tier 1: buy industry products out of necessity, but would look for a better way (Vita); Tier 2; general refuse to buy the industry player’s offering (NWC/Price Choppers); Tier 3: have never even considered the industries offerings (Gyms/On-Offs Stores that could meet UNFI minimums)
Grant 1996 / The KBV
- The firm is a pool of (1) tangible and intangible resources (that are easily exploitable by the firm) & (2) inarticulable or “tacit” capabilities (knowledge) that guide exploitation of resources.
- KBV’s central argument =firm-wide “tacit capabilities” (could be conceptualized as a resource like D.C’s) determine S.C.A.
(Again you could think of this tacit knowledge (KBV) as being encompassed in Barney’s definition the way he defined it.) - A firm builds awareness and dexterity of its resources (like a sports team whose play is refined/enhanced through practice)
- KBV scholars have increasingly focused attention on how firm capabilities promote the absorption of external knowledge (absorptive capacity; Cohen, 1990).
- An employee “knows more than he can tell.” Much like one’s inability to explain “gut” feelings, a firms/employees possesses in-depth knowledge but cannot effectively codify this knowledge (Polanyi, 1962)
- Capabilities are rooted not in the mind of any single employee but rather exist within the social fabric of the firm, competitors theoretically could not acquire a firm’s capabilities by hiring away firm employees. – making these met the definition of V/R/I (Barney86/91; Deitrikx&Cool’89)
CRITICISM:
1) some disagreement exists about the appropriate level of analysis (i.e., knowledge exists within the individual vs. knowledge exists within the firm).
2) Tacit capabilities, by definition, cannot be identified and measured and since they are firm-specific measures could not be used across firms.
3) Some scholars find KBV largely indistinguishable from the RBV and DCs. (Knowledge certainly plays a part in establishing which resources to build and maintain and which to disregard and thus seems central to the message put forth in RBV work).
Cohen, 1990
KBV scholars have increasingly focused attention on how firm capabilities promote the absorption of external knowledge (absorptive capacity;
Polanyi, 1962
- An employee “knows more than he can tell.” Much like one’s inability to explain “gut” feelings, a firms/employees possesses in-depth knowledge but cannot effectively codify this knowledge.
Kirzner
(entrepreneurialism)
Dyer & Singh (1998)
Relational View: Theory for considering networks/dyads of firms as the unit of analysis to explain relational rents
- Relational Rents: Generated in exchange relationships/ interfirm linkages (resulting from the interaction of two firms co-operating). Could not have been obtained from either firm on their own.
Four sources of relational rents:
1) relation-specific assets,
2) knowledge-sharing routines,
3) complementary resources/capabilities
4) effective governance.
Supplements existing views:
- RBV/KBV - Explains superior returns with firm heterogeneity.
- Within Industry structure view (SCP), RelationalView explains superior returns with a firm’s membership in an industry
Gavetti (2005)
PURPOSE: Micro foundations of DCs (combines Behavioral Strat/DCs)
METHOD:SImulation model
CONCLUSION: (1) individual decision makers cognition, (2) routines and (3) experience (history) –> stronger DCs.
- IMPLICATION: New Ventures are most vulnerable to make wrong decisions.
Sampson (2007)
PURPOSE: What makes firm’s share knowledge?
Drawing on KBV
1) Moderate Technology Diversity (rather than H or L) –> InfoSharing/Innovation
2) Equity joint venture alliance –> InfoSharing/Innovation
— could link this to agency.
Kor & Mesko (2013)
Linking DMC, Cognition, and DL
DMC (which are made from 1) human capital 2) social capital 3) Cognition
impact —> Configuration & Orchestration —> Dominant Logic/adaptive capacity
CRITIQUE: Untestable propositions
