Strategy scholars have argued that capabilities can influence firm performance through a variety of means and mechanisms. However, the role of capabilities and their proposed contributions have been narrowly theorized and insufficiently tested. We contribute to resolving these issues by considering the conditions under which ordinary and dynamic capabilities contribute to higher relative firm performance. We do so by examining the positive and negative contributions of capabilities to relative firm performance as well as the effects of environmental dynamism and the degree of capability heterogeneity. We utilize measures of relative firm performance at both the process and firm level within a sample of Chilean firms, which due to a dynamic environment allows for a clearer link between the environment and the use of capabilities. We find that environmental dynamism negatively affects the contribution of ordinary capabilities and positively affects the contribution of dynamic capabilities to relative firm performance. Further, heterogeneity strengthens the contribution of dynamic capabilities to relative firm performance, but is less important for ordinary capabilities. Interestingly, we find support for the direct effects of capabilities to be stronger with a process-level performance measure, whereas the influences of environmental dynamism and heterogeneity are stronger with a firm-level measure.higher. The reason for this, as explained above, is that ordinary capabilities allow the firm to enhance existing processes, products, and services. Therefore, we propose the following relationship:Hypothesis 1a: The greater the use of ordinary capabilities, the greater the relative performance of the firm.

Firms in transition economies experienced a large exogenous shock in their external business environment in the late 1980s when these economies moved from a socialist-oriented economic environment to a more market-oriented economic environment. This paper examines the following research question in the context of this change: What are some factors that influence transition economy firms to successfully change their operating know-how or knowledge sets to reflect the demands of their new environment? Building on some core ideas from literature on organizational imprinting, knowledge-based view of the firm, and firm search, we suggest that two factors have a profound impact on a firm's ability to change. The imprinting effect of firms' prior socialist institutional and market environment adversely impacts their ability to change their operating knowledge. At the same time, firms that search for new knowledge from distant sources (located in mainly non-socialist countries) are able to successfully change their knowledge to meet the demands of the new market-oriented economy. Both of these aspects also have joint interdependent effects on the success of change; distant search mitigates some of the adverse impact of socialist market imprinting, but that is not the case for the impact of socialist institutional imprinting. These findings have interesting implications for both researchers and practitioners involved in transition economy settings.

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Northian institutional theory argues that firms adapt to their current institutional environments. Organizational imprinting theory argues that firms will be constrained by their founding institutional environments. We explore the combined influence of these two institutional environments on the strength of competitive aspirations using a unique dataset of firms in the shifted institutional environment of Central European transition economies. Our results indicate founding institutional environments temper adaptation to current institutional environments for certain competitive aspirations and this effect increases as the size of the shift between current and founding institutional environments increases.The direct effect of founding institutions is significant alone, but loses significance in combination with the current institutional variable.

Accepted practices for survey research in medium and large firms in developed economies are well established. However, as scholars explore fine‐grained phenomena in nontraditional contexts, sampling, survey design, and administration tasks may need adjusting. Through three case studies and an analysis of a decade of published work, we find that sample frame creation and survey administration require the greatest degree of adaptation, while survey instrument creation most closely follows established practices. We recommend using context‐specific sampling frames and administration techniques, though established survey instruments and scales may be used. The conclusions highlight the importance of overlaying unique adaptations onto established practices to achieve acceptable response rates, obtain accurate and robust data, and provide the basis for subsequent meaningful analysis. Copyright © 2011 John Wiley & Sons, Ltd.