Hostname: page-component-848d4c4894-xm8r8 Total loading time: 0 Render date: 2024-06-23T04:59:42.209Z Has data issue: false hasContentIssue false
  • English
  • Français

The relationship between dynamic and operating capabilities as a stage-gate process: Insights from radical innovation

Published online by Cambridge University Press:  02 February 2015

Lance R Newey ,
Martie-Louise Verreynne  and
Andrew Griffiths
Lance R Newey
Affiliation:
University of Queensland Business School, University of Queensland, St Lucia, QLD, Australia
Martie-Louise Verreynne
Affiliation:
University of Queensland Business School, University of Queensland, St Lucia, QLD, Australia
Andrew Griffiths
Affiliation:
University of Queensland Business School, University of Queensland, St Lucia, QLD, Australia
Get access Rights & Permissions [Opens in a new window]

Abstract

Dynamic capabilities ‘create, extend or modify’ the firm's current operating capabilities in order to enable strategic renewal. Although widely recognized, this conceptualization of the relationship between dynamic and operating capabilities lacks empirical grounding. Using process research into the difficult radical new product development path of a new influenza drug, our data reveal that dynamic and operating capabilities have a stage-gate type relationship. We demonstrate that dynamic capabilities need to achieve certain critical outputs if successful transfer to the operating capability stage is to be reached. Furthermore progress from one stage to the next is dependent on how well dynamic capabilities co-specialize with downstream operating capabilities. This co-specialization is enabled via three processes within a dynamic capability: value network knowledge generation, value schema development and value proposition development.

Keywords

dynamic capabilitiesoperating capabilitiesradical new product developmentco-specializationstage-gateprocess research
Type
Research Article
Information
Journal of Management & Organization , Volume 18 , Issue 1 , January 2012 , pp. 123 - 140
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adams, M. E., Day, G. S., & Dougherty, D. (1998). Enhancing new product development performance: An organizational learning perspective. Journal of Product Innovation Management, 15(5), 403–422.Google Scholar
Ambrosini, V., Bowman, C., & Collier, N. (2009). Dynamic capabilities: An exploration of how firms renew their resource base. British Journal of Management, 20S, 9–24.Google Scholar
Atuahene-Gima, K., & Murray, J. Y. (2007). Exploratory and exploitative learning in new product development: A social capital perspective on new technology ventures in China. Journal of International Marketing, 15(2), 1–29.Google Scholar
Berchicci, L., & Tucci, C. L. (2010). There is more to market learning than gathering good information: The role of shared team values in radical product definition. Journal of Product Innovation Management, 27, 972–990.Google Scholar
Bingham, C. B., Eisenhardt, K. M., & Furr, N. R. (2007). What makes a process a capability? Heuristics, strategy and effective capture of opportunities. Strategic Entrepreneurship Journal, 1(1), 27–47.Google Scholar
Burgelman, R., & Valikangas, L. (2005). Managing internal corporate venturing cycles. Sloan Management Review, 46(4), 26–34.Google Scholar
Christensen, C. M., & Rosenbloom, R. S. (1995). Explaining the attacker's advantage: Technological paradigms, organizational dynamics and the value network. Research Policy, 24, 233–257.Google Scholar
Cooper, R. G. (2001). Winning at new products: Accelerating the process from idea to launch (2nd ed.). Reading, MA: Perseus Books.Google Scholar
Cooper, R. G., & Edgett, S. J. (1999). Product deevelopment for the service sector. New York: Basic Books.Google Scholar
Danneels, E. (2002). The dynamics of product innovation and firm competences. Strategic Management Journal 23(12), 1095–1121.Google Scholar
Danneels, E. (2010). Trying to become a different type of company: Dynamic capability at Smith Corona. Strategic Management Journal, 32, 1–31.Google Scholar
Di Stefano, G., Peteraf, M., & Verona, G. (2010). Dynamic capabilities deconstructed: A bibliographic investigation into the origins, development and future directions of the research. Industrial and Corporate Change, 19(4), 1187–1204.Google Scholar
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550.Google Scholar
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1), 25–32.Google Scholar
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21, 1105–1121.Google Scholar
Ettlie, J. E., & Elsenbach, J. M. (2007). Modified stage-gate regimes in new product development. Journal of Product Innovation Management, 24, 20–33.Google Scholar
Floyd, S. W., & Lane, P. J. (2000). Strategizing throughout the organization: Managing role conflict in strategic renewal. Academy of Management Review, 25(1), 154–177.Google Scholar
Gavetti, G. (2005). Cognition and hierarchy: Rethinking the microfoundations of capabilities' development. Organization Science, 16(6), 599–617.Google Scholar
Gavetti, G., & Levinthal, D. (2000). Looking forward and looking backward: Cognitive and experiential search. Administrative Science Quarterly, 45, 113–137.Google Scholar
Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M. A., Singh, H., Teece, D. J., et al. (2007). Dynamic capabilities: Understanding strategic change in organizations. Malden, MA: Blackwell.Google Scholar
Helfat, C. E., & Peteraf, M. A. (2003). The dynamic resource-based view: Capability lifecycles. Strategic Management Journal, 24, 997–1010.Google Scholar
Hoopes, D. G., & Postrel, S. (1999). Shared knowledge, ‘glitches’ and product development performance. Strategic Management Journal, 20, 837–865.Google Scholar
Katkalo, V. S., Pitelis, C. N., & Teece, D. J. (2010). Introduction: On the nature and scope of dynamic capabilities. Industrial and Corporate Change, 19(4), 1175–1186.Google Scholar
Laamanen, T., & Wallin, J. (2009). Cognitive dynamics of capability development paths. Journal of Management Studies, 46(6), 950–981.Google Scholar
Langley, A. (1999). Strategies for theorizing from process data. Academy of Management Review, 24(4), 691–710.Google Scholar
Lavie, D. (2006). Capability reconfiguration: An analysis of incumbent responses to technological change. Academy of Management Review, 31(1), 153–174.Google Scholar
Leifer, R., McDermott, C. M., O'Connor, G. C., Peters, L. S., Rice, M. P., & Veryzer, R. W. (2000). Radical innovation: How mature companies can outsmart upstarts. Boston: Harvard Business School Press.Google Scholar
Lichtenthaler, U. (2009). Absorptive capacity, environmental turbulence and the complementarity of organizational learning processes. Academy of Management Journal, 52(4), 822–846.Google Scholar
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87.Google Scholar
Markham, S. (2002). Moving technologies from lab to market. Research Technology Management, 45(6), 31–42.Google Scholar
Markides, C. C., & Geroski, P. A. (2005). Fast second: How smart companies bypass radical innovation to enter and dominate new markets. San Francisco: Jossey-Bass.Google Scholar
Miller, R., & Floricel, S. (2004). Value creation and games of innovation. Research Technology Management, 47(6), 25–37.Google Scholar
Moran, P. (2005). Structural vs. relational embeddedness: Social capital and managerial performance. Strategic Management Journal, 26, 1129–1151.Google Scholar
Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital and the organizational advantage. Academy of Management Review, 38(2), 242–266.Google Scholar
Newey, L. R., & Zahra, S. A., (2009). The evolving firm: How dynamic and operating capabilities interact to enable entrepreneurship. British Journal of Management, 20, S81–S100.Google Scholar
O'Connor, G. C. (2008). Major innovation as a dynamic capability: A systems approach. Journal of Product Innovation Management, 25, 313–330.Google Scholar
O'Connor, G. C., & De Martino, R. (2006). Organizing for radical innovation: An exploratory study of the structural aspects of RI management systems in large established firms. Journal of Product Innovation Management, 23, 475–497.Google Scholar
O'Connor, G. C., Hendricks, R., & Rice, M. (2002). Assessing transition readiness for radical innovations. Research Technology Management, 45(6), 50–56.Google Scholar
O'Connor, G. C., Hyland, J., & Rice, M. (2004). Bringing radical and other major innovations successfully to market: Bridging the transition from R&D to operations. In Belliveau, P., Griffin, A., & Somermeyer, S. M. (Eds.), The PDMA toolbook for new product development (pp. 33–70). New York: John Wiley & Sons.Google Scholar
O'Connor, G. C., Leifer, R., Paulson, A. S., & Peters, L. S. (2008). Grabbing lightning: Building a capability for breakthrough innovation. San Francisco: Jossey-Bass.Google Scholar
Pettigrew, A. M., (1997). What is a processual analysis? Scandinavian Journal of Management, 13(4), 337–348.Google Scholar
Porac, J. F., & Thomas, H. (2002). Managing cognition and strategy: Issues, trends and future directions. In Pettigrew, A., Thomas, H., & Whittington, R. (Eds.), Handbook of strategy and management (pp. 139–164). Thousand Oaks, CA: Sage.Google Scholar
Raynor, M. E. (2007). The strategy paradox: Why committing to success leads to failure and what to do about it. New York: Doubleday.Google Scholar
Reid, S., & de Brentani, U. (2010). Market vision and market visioning competence: Impact on early performance for radically new high tech products. Journal of Product Innovation Management, 27, 500–518.Google Scholar
Siggelkow, N. (2007). Persuasion with case studies. Academy of Management Journal, 50(1), 20–24.Google Scholar
Song, M., & Thieme, J. (2009). The role of suppliers in market intelligence gathering for radical and incremental innovation. Journal of Product Innovation Management, 26, 43–57.Google Scholar
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28, 1319–1350.Google Scholar
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.Google Scholar
Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition and inertia: Evidence from digital imaging. Strategic Management Journal, 21, 1147–1161.Google Scholar
Walsh, J. P. (1995). Managerial and organizational cognition: Notes from a trip down memory lane. Organization Science, 6(3), 280–321.Google Scholar
Walsh, J. P., & Fahey, L. (1986). The role of negotiated belief structures in strategy making. Journal of Management, 12(3), 325–338.Google Scholar
Weick, K. E. (1989). Theory construction as disciplined imagination. Academy of Management Review, 14(4), 516–531.Google Scholar
Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal, 24(10), 991–995.Google Scholar
Yin, R. K. (2003). Case study research: Design and methods. Thousand Oaks, CA: Sage.Google Scholar
Zahra, S. A., Sapienza, H. J., & Davidsson, P. (2006). Entrepreneurship and dynamic capabilities: A review, model and research agenda. Journal of Management Studies, 43(4), 917–955.Google Scholar