Innovation and Dynamic Capabilities of the Firm: Defining an Assessment Model

Abstract

Innovation and dynamic capabilities have gained considerable attention in both academia and practice. While one of the oldest inquiries in economic and strategy literature involves understanding the features that drive business success and a firm's perpetuity, the literature still lacks a comprehensive model of innovation and dynamic capabilities. This study presents a model that assesses firms' innovation and dynamic capabilities perspectives based on four essential capabilities: development, operations, management, and transaction capabilities. Data from a survey of 1,107 Brazilian manufacturing firms were used for empirical testing and discussion of the dynamic capabilities framework. Regression and factor analyses validated the model; we discuss the results, contrasting with the dynamic capabilities' framework. Operations Capability is the least dynamic of all capabilities, with the least influence on innovation. This reinforces the notion that operations capabilities as "ordinary capabilities," whereas management, development, and transaction capabilities better explain firms' dynamics and innovation.

R&D investment and the arrangement of innovation capabilities in Brazilian manufacturing firms

“…In the present study, each of the four innovation capabilities represents an independent variable, while innovation performance is the dependent one. The objective is to find a equation whose coefficients demonstrate the importance of each capability to performance, in a similar fashion to what was proposed by Alves et al, (2017) in Equation 1.…”

Conditions of Marketing and Organizational Innovation of Small and Medium-Sized Enterprises

“…It is a source of both opportunities and threats to their current and future activities. The very enterprise and above all its resources (Aas and Breunig, 2017;Barney, 2001), organizational routines, key competencies and dynamic abilities (Alves et al, 2017;Stronen et al, 2017;Teece and Leih, 2016) determine whether it is able to use them properly or not (Cohen and Levinthal, 1990;Zahra and George, 2002).…”

“…The most commonly used include the size of the enterprise (Guan and Ma, 2003;Hurley and Hult, 1998;Martinez-Roman et al, 2011). Other relevant contextual factors include the industry or sector of operation, and the type of market (domestic or foreign) (Alves et al, 2017;Liu et al, 2017;Martinez-Roman and Romero, 2017;Yam et al, 2011).…”

Paths and Challenges of New Technologies: The Case of Nanotechnology-Based Cosmetics Development in Brazil

“…In this model, the development capability and the transactional capability are the main drivers of the new product development process. These two capabilities define a firm's ability to handle the new products (Alves et al 2017).…”