Content area
Full text
This paper discusses some developments in the theory of the organizational capabilities of the business enterprise. Antecedents are recognized, and some promising new developments and areas for future research are identified. The role of managers in the economic system is highlighted and discussed within the context of economic and organizational research. Suggestions for future developments of dynamic capability research involve employment of evolutionary and behavioral theories.
Key words: strategy; organizational changes; organizational capabilities
1. Introduction
Management and organization lie at the heart of the performance of both individual enterprises and national economies. The purpose of organization is to enable and facilitate coordination and collective effort by individuals. However, such activity requires entrepreneurial and professional management-the price system alone cannot "manage" economic activity. The invisible hand must have fingers that can work in a coordinated fashion.
This paper helps outline a framework that can be used to help organize ideas about management and strategy. Recognized business historians such as Chandler (1990) attribute a large part of the reason why the United States overtook Britain in economic performance to differences in strategy, management, and enterprise structure. Many other writers see the organization of Japanese firms after 1950 as a major factor enabling Japanese postwar growth. Mowery and Nelson (1999, p. 371) ascribe descriptive power to the "dynamic capabilities" framework in helping illuminate the importance of enterprise performance to industrial leadership.
Three central themes are developed in this paper. First, there is a role for managers and leaders not just in managing the business enterprise, but also in the theory of a properly functioning economic system and in industrial leadership. Second, the emerging paradigm of dynamic capabilities helps explicate the role (strategic) managers and management play in a market economy. The dynamic capabilities framework can be used as a foundation for understanding the processes of opportunity sensing and seizing, as well as the processes of strategic renewal. Managers in this paradigm play an essential role in both identifying and capturing new strategic opportunities, in orchestrating the necessary complementarities and other organizational assets, and in inventing business models and new organizational forms. Third, dynamic capabilities rest on assumptions and intellectual foundations that can be traced to the behavioral theory of the firm, to evolutionary theory, as well as...