The acquisition of capabilities: How firms use dynamic and ordinary capabilities to manage uncertainty

Abstract

How organizations utilize capabilities to achieve competitive advantage and improve performance has received an abundance of scholarly attention. Both ordinary and dynamic capabilities (DC) enable organizations to achieve higher performance when leveraged appropriately and under favorable conditions. The complexity of an organization's motives for why and how different capabilities are acquired drives us further to explore what complementarities organizations might achieve and under what contexts. Specifically, we explore how firms engaging in mergers and acquisitions (M&A) to acquire dynamic and/or ordinary capabilities experience different market reactions and levels of short- and long-run value creation given environmental uncertainty. Our results support the acquisition of ordinary capabilities for predicting positive short-term market reactions and of DC for longer-run firm performance post-M&A, with uncertainty factors moderating these relationships. We discuss both the theoretical and practical implications of uncertainty and acquisitions of these capabilities and offer suggestions for future research.

Dynamic capabilities: New ideas, microfoundations, and criticism

“…Both inductive exploration and deductive approaches to test moderation and mediation models and across organizational levels will benefit this line of research. Second, research into the theoretical and empirical connections between DCs and other strategic concepts, such as CEO or more generally managerial cognition (Durán & Aguado, 2022) or the link between DC and M&A (Irwin et al, 2022), has plenty of space to explore. We may benefit from expanding research on dynamic capabilities in the area of international business taking into account (ambi-)cultural ideas (Arndt & Ashkansy, 2015).…”

Tourism digital transformation and future supply chain competition: an integrated perspective on real options theory and digital competencies

“…ROT emphasizes identifying the ability to process multiple pieces of information to implement the selected option effectively (Irwin et al, 2022;Salvoldi and Brock, 2023). Previous research has pointed out that digital transformation requires mature digital technologies collaboration (Tsou and Chen, 2023), and tourism enterprises should evaluate their technological capabilities and calculate the benefit-cost ratio (Cheng et al, 2023) to formulate better digital transformation strategies.…”

Cognitive styles and dynamic managerial capabilities: implications for SMEs in a transition economy

“…DC focuses on the firm level and consists of three essential components: sensing, sizing, and reconfiguring; each component is vital for firms to reach a competitive advantage (Teece, 2007;Teece et al, 1997). DC significantly predicts a firm's long-term performance (Irwin et al, 2022), and Adner and Helfat (2003) proposed (DMC) at the individual level, which is defined as "the capabilities with which managers build, integrate, and reconfigure organizational resources and competencies" (Adner andHelfat, 2003: p. 1012). Another definition of DMC is the "capacity of the managers IJEBR 30,1 to create, extend, or modify the resource base of the organization" (Helfat et al, 2007: p.3).…”

“…, 1997). DC significantly predicts a firm's long-term performance (Irwin et al. , 2022), and Adner and Helfat (2003) proposed (DMC) at the individual level, which is defined as “the capabilities with which managers build, integrate, and reconfigure organizational resources and competencies” (Adner and Helfat, 2003: p. 1012).…”