Microfoundations of innovation: A dynamic CEO capabilities perspective

Abstract

Although sustainable competitive advantages in today's hypercompetitive economy call for strong management skills, the literature lacks a holistic understanding of the specific capabilities chief executive officers (CEOs) utilize to drive innovation. This article derives the dynamic CEO capabilities (DCCs) concept to examine whether CEOs' individual‐level DCCs facilitate firm‐level innovation and proposes that CEO power moderates this relationship. Results from a longitudinal sample of S&P 900 manufacturing firms confirm that strong DCCs drive innovation. Further, powerful CEOs can exert a more significant influence on firms' innovativeness through their DCCs, yet this effect is contingent on the type of CEO power.

Walking on the gender tightrope: Unlocking ESG potential through CEOs' dynamic capabilities and strategic board composition

“…These capabilities facilitate the identification of opportunities and threats (sensing), the exploitation of these opportunities (seizing), and the transformation of the firm's resource portfolio (reconfiguring) (Helfat & Martin, 2015;Heubeck & Meckl, 2022a, 2023Teece, 2007). Differences in strategic orientation among firms are attributed to the heterogeneous capabilities of CEOs (Adner & Helfat, 2003;Hambrick & Mason, 1984;Heubeck & Meckl, 2023).…”

“…The second is the upper echelons theory, which posits that top managers make strategic decisions based on their distinct interpretations of strategic choice situations that originate from observable background characteristics (Cannella & Holcomb, 2005;Hambrick & Mason, 1984). In sum, the DCC perspective emphasizes the influence of individual top-level managers on strategic decision-making (Heubeck & Meckl, 2023).…”

“…First, human capital encompasses both firmspecific and generic aspects, quantified by a CEO's years of tenure and their highest degree of formal education (Heubeck & Meckl, 2022a, 2023. Second, social capital is the number of a CEO's active or past directorships (Heubeck & Meckl, 2023;Holzmayer & Schmidt, 2020). Third, cognition is captured through the CEO's educational background, as CEOs possess diverse cognitive foundations for decision-making based on variations in their educational pursuits.…”

“…A fixed-effects panel data regression with robust standard errors was chosen based on these tests. The choice of regression analysis as the primary methodological approach in this study is well grounded and justified based on the theoretical frameworks and prior literature in the field (e.g., Henry et al, 2019;Heubeck & Meckl, 2023;Holzmayer & Schmidt, 2020;Weerasinghe et al, 2023). Hypothesis H2 argues that BGD nonlinearly moderates the relationship between DCCs and ESG performance.…”

Cultural Influence on Corporate Sustainability: A Board of Directors Perspective

“…In the ever-evolving realm of corporate governance, the role of boards of directors has transformed from a passive overseer to an active architect of an organization's strategic vision and sustainability agenda. The literature in the field of board directors, especially in international business, has been characterized by a focus on corporate governance (Chatjuthamard et al 2023;Bolton and Zhao 2022;De Beule et al 2022;Raimo et al 2022;Asni and Agustia 2022;Attia et al 2021), corporate social responsibility (Shelton et al 2022;Ma and Chen 2023;Pucheta-Martínez et al 2022), corporate culture (Azcorra et al 2023;Pi and Yang 2023), CEO characteristics (Heubeck and Meckl 2023;Aksoy et al 2023), countries' studies (Lozano and Martínez-Ferrero 2022), and sustainability (Zhao et al 2022).…”