Drivers of dynamic learning and dynamic competitive capabilities in international strategic alliances

Research on dynamic competitive capabilities (DCCs) is critical for businesses to operate effectively in a rapidly changing environment. The driving forces of the dynamic learning mechanism (DLM) play a decisive role in the evolution of DCCs that the resource-based view (RBV) has failed to clearly identify. By engaging in an empirical study with a sample of 363 strategic alliances in Taiwanese companies, this paper shows that learning intent and embedded learning positively influence the drivers of DLM, such as manager integration power, external linkages, codification of experience, and ambiguity, to both strongly and positively affect DCC development in high-level management of international strategic alliances.     

Supply chain capabilities for facilitating the internationalisation of retailers – a multiple case study of three Swedish retail companies

ABSTRACT

Market-oriented aspects of retail internationalisation have received a lot of research attention since the 1990s. However, beyond these aspects lies also supply-chain oriented capabilities that are necessary for retailers to successfully internationalise into foreign sales markets. By using a perspective based on resource-based theories, this paper explores supply-chain oriented capabilities that facilitate retail internationalisation. The research is based on a multiple case study of three Swedish retailers. Through the perspective of research based theories, specifically capabilities, the empirical data is studied in a single-case as well as a cross-case analysis. Findings reveal three supply chain-oriented capability categories (leadership capability, integration capability and learning capability) of importance for retail internationalisation. Resources necessary for the capabilities are to be found internally at the retailer, but also externally at other firms. This research adds to the market-oriented knowledge on retail internationalisation by adding a supply-chain oriented perspective. Further, it provides an understanding of the early phases of retail internationalisation.     

International new venture performance: Role of international entrepreneurial culture,ambidextrous innovation,and dynamic marketing capabilities

International new ventures (INVs) contend with environmental dynamism in global markets, compelling firms to enhance their innovation and marketing capabilities. While the INV literature is growing, it is not informative as to how INVs develop and utilize dynamic capabilities to overcome resource-constraints to enhance performance. We utilize the concept of international entrepreneurship culture (IEC) to better understand how INVs advance innovation and dynamic marketing capabilities to succeed in their internationalization activities. Building on the dynamic capabilities view (DCV), we empirically examine the relationships among IEC, ambidextrous innovation, dynamic marketing capabilities, and INV performance under varying levels environmental dynamism. The findings highlight that IEC influences both ambidextrous innovation and dynamic marketing capabilities; and, together, these link to INV performance gains. Furthermore, this research finds support for the mediating effects of ambidextrous innovation and dynamic marketing capabilities in the IEC – INV performance relationship. Additionally, the results indicate an international entrepreneurial culture is of greater significance in developing ambidextrous innovation when environmental dynamism is present. The study context is a sample of 286 high-technology INVs from India, a large and dynamic emerging market.     

The effect of social networks and dynamic internationalization capabilities on international performance

This article explores the relationship between social networks and dynamic internationalization capabilities (DICs), and their impact on the international performance of small and medium-sized firms (SMEs) in low-tech industries. We distinguish between exploitative DICs (threshold and consolidation capabilities) and explorative DICs (value-adding and disruption capabilities). Our results, which are based on a sample of small and medium-sized Portuguese exporters, indicate that social networks are a relevant antecedent of exploitative and explorative DICs, and that consolidation and disruption capabilities positively affect international performance. Multiple mediation analysis confirms these relationships. The article concludes with a discussion of implications for research and practice.     

Exploring the role of knowledge management practices on exports: A dynamic capabilities view

Drawing on dynamic capabilities view, this work provides empirical evidence on the role of knowledge management practices on export intensity in SMEs in a mature and global, non-high-tech industry. A quantitative study with structural equation modeling was carried out on a sample of 157 Spanish and Italian manufacturing companies in the ceramic tile industry. Our results suggest the existence of a mediating effect of dynamic capabilities on exports, hence the implementation of knowledge management practices is a necessary but not sufficient condition to improve exporting, requiring the existence of dynamic capabilities to reconfigure these capabilities. Findings highlight the relevance of knowledge practices to foster exports, providing new insights for managers dealing with dynamic capabilities in SMEs.     

Determinants of website traffic: the case of European fashion apparel retailers

The globalization process together with the extraordinary growth in the use of Internet offer firms new growth opportunities. Retail firms are using a multichannel approach, involving the Internet, in their internationalization strategies. Website traffic as measured by unique users and online awareness is among the measures for assessing the success of the online channel. There is little evidence, however, linking website traffic and the characteristics of the retail multichannel internationalization process. In order to fill this gap, this paper analyses the factors explaining the retailer's international website traffic. Website traffic data for a sample of European fashion apparel retailers are modelled as dependent on characteristics of the organization and of its physical and virtual internationalization strategy. Following the results of several linear regression models, we infer the complementarity of online and offline channels in the international operation, as well as the contribution of social networks as traffic generators.     

Exploring the role of internationalization knowledge in fostering strategic renewal: A dynamic capabilities perspective

Internationalization knowledge (IK) is important to successfully enter and develop competitive strategies abroad. Yet, how IK is advanced and improved across the multinational enterprise (MNE), and how this contributes to the MNE’s strategic renewal is less understood. This analysis is based on an in-depth case study of Microsoft International to explore how IK is advanced, improved, and integrated across the enterprise. Our findings suggest that IK plays a critical role in fostering strategic renewal of an MNE. More specifically, sensing, seizing, and transforming capabilities jointly provide the necessary basis that enable IK to facilitate strategic renewal. We contribute to the literature by (1) explicating three categories of IK and their hierarchical relationship; (2) reveal how three distinct capabilities required by MNEs capture and integrate the three categories of IK across the enterprise; and, (3) offering that strategic renewal is triggered by routines based on the development and integration of IK.     

How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm

This research explores the relationship between international entrepreneurship characteristics and the use of Internet capabilities for the international business processes of the firm. It has been suggested, that the accumulation of a firms Internet capability can assist international operations, especially when operating in fast changing dynamic Internet environments. However, international entrepreneurship characteristics which are seen as a precursor to leveraging Internet capabilities are still vague. Given this finding, eight case studies of small and medium sized travel and tourism firms were selected to investigate the influence of international entrepreneurship characteristics, and Internet capabilities for international business processes. Based on the eight in-depth case studies, the results signify that successful international entrepreneurial firms which encompass high levels of international innovativeness and proactiveness behaviour integrate Internet capabilities to a greater degree. Our findings also indicate that the prior international business experience, international risk-taking propensity and international networking characteristics are not necessarily precursors to successful integration of Internet capabilities for international business processes. On the contrary, international business experience and international networks actually lead to a reliance on traditional mechanisms of internationalisation and can dilute the development of Internet capabilities for international business processes.     

Alliance capabilities,interpartner attributes,and performance outcomes in international strategic alliances

This study tests, using a sample of cross-border alliances, how different alliance capability components intersect to develop resource complementarity and trust and how such interpartner attributes themselves intersect to enhance performance. We find that management capability allows firms to build resource complementarity and trust. High formulation capability is required for management capability to positively shape resource complementarity. Search capability is only positively linked to resource complementarity when formulation capability is low. International alliance experience drives resource complementarity. Trust has an inverted U-shaped relationship with performance, and resource complementarity drives trust and performance. Resource complementarity positively moderates the trust–performance link.     

H&M – documenting the story of one of the world's largest fashion retailers

The interest of fashion companies in documenting their history has been almost non-existent in Sweden until recently. For the Centre for Business History in Stockholm, the commission to secure the history of Sweden's largest fashion company and one of the world's largest fashion retailers, H&M, therefore offers new challenges. This study analyses the methods being used in this project. Apart from collecting, saving and digitising all existing documents from the company's 60 year-history, the documentation will be based on a considerable number of interviews with past and current employees. These oral history interviews will deal with a number of questions important to scholars doing contemporary business history.     

The role of love in satisfied customers' relationships with retailers

This study proposes and tests a model that includes customer love as a measure of satisfied customers' emotional responses to retailers specifically in apparel and grocery store contexts. Customer love was found to partially mediate the effect of service quality on positive word-of-mouth and willingness to pay more. In contrast, customer love was proven to fully mediate the effect of service quality on self-disclosure and competitive insulation. As a control variable, emotional intensity had a positive effect on customer love. The implications of the customer love construct are discussed, as well as limitations and areas for future research.     

The role of service embeddedness in the internationalisation process of manufacturing firms

Over the last decade the growth of service firms, and their internationalisation, has attracted considerable attention from researchers, with a special focus on characteristics that distinguish services from goods. However, as the composition of a firm's product can contain both good and service elements, this paper argues that it is somewhat misleading to categorise a product simply as either a ‘good’ or a ‘service’. Manufactured goods often contain client-related services embedded in them. Further, the nature of these embedded services may vary with respect to their degree of separability of production and consumption. Based on several case studies of Australian manufacturing subsidiaries in the UK, this paper examines the impact of inseparable embedded services on a firm's entry-mode choice. It reveals that the extent and nature of embedded services have a considerable impact on a firm's choice of foreign entry mode. The research findings are likely to contribute to the existing marketing and internationalisation literature.     

Microfoundations of dynamic new venture partnering capabilities

Managing relationships with new venture suppliers require the adaptation of supplier management practices and routines. This research builds upon the dynamic capabilities perspective to explicate the ability to partner effectively with new venture suppliers as a dynamic capability. We argue that new venture partnering capability (NVPC) encompasses sensing, seizing, and transforming capabilities. Firms with sensing capabilities can interpret new ventures' value propositions and then match them to the needs of their business units. Seizing capabilities allow firms to coordinate and develop the relationship with a new venture supplier to capture value. Transforming capabilities enable firms to adapt resources and reconfigure their sensing and seizing capabilities. Our findings suggest that firms accelerate the transformation and strengthen dynamic NVPCs by applying entrepreneurial behavior through high-quality and regular interactions with new venture suppliers and embedding a dedicated new venture function. We also find that dynamic NVPCs can reside at different levels and that entrepreneurial managers can stimulate the development of organizational NVPCs. In general, we provide further empirical evidence on how buying firms can more effectively leverage the potential of new venture suppliers.     

The impact of reverse logistics process coordination on third party relationship quality: A moderated mediation model for multichannel retailers in the fashion industry

Multichannel retailing is a widely adopted strategy in the fashion industry. Companies in this industry find it a source of competitive advantage to invest in reverse logistics infrastructure. However, limited empirical studies investigate the enablers of the relationship quality between the retailers and their reverse logistics service providers. This study quantifies the impact of reverse logistics process coordination between retailers and logistics service providers on relationship quality. Moreover, it tests the mediating role of reverse logistics service quality and the moderating role of conflict frequency in this relationship. Data were collected through a survey using a purposive sample of 241 retail store managers from the fashion retail industry of Pakistan. For this purpose, a self-administered questionnaire was developed using a five-point Likert Scale to gauge the responses. Conditional process analysis was used to evaluate the moderated mediation model. The findings showed a significant positive impact of reverse logistics process coordination on the relationship quality with a logistics service provider, a significant positive mediation effect of reverse logistics service quality, and a significant moderation effect of conflict frequency on the indirect relationship. However, conflict frequency, contrary to the hypothesis in the study, strengthened the indirect relationship. Furthermore, the moderation effect of conflict frequency on the direct relationship was insignificant. This study will help managers better understand the best practices leading to effective management of reverse logistics processes, particularly product returns.     

MNE performance during a crisis: An evolutionary perspective on the role of dynamic managerial capabilities and industry context

As the likelihood of worldwide crises increases due to globalization and the resulting economic contagion, understanding why some multinational enterprises (MNEs) prevail in such environments becomes ever more critical. Drawing from the concept of dynamic managerial capabilities, we posit that MNE in-crisis performance is associated with the pre-crisis development of asset management capabilities, or the capacity of managers to orchestrate assets so as to extract more value from the firm’s resource pool. Specifically, we argue that because dynamic managerial capabilities evolve as a response to a firm’s task environment, MNEs that operate in dynamic industries develop stronger asset management capabilities. However, we also posit that whether these capabilities contribute to in-crisis performance is contingent upon the munificence of the industry environment in which the capability evolves. Asset management capabilities that evolve in munificent environments would encompass a wider spectrum of routine-altering activities, and thus increase the ability of the MNE to react to more revolutionary events, such as global economic crises. Conversely, asset management capabilities that evolve in resource-scarce environments will result in more strategic lock-in due to firms' constrained ability to experiment with novel resource configurations, resulting in poorer in-crisis performance. We test our hypotheses using a sample of 854 MNEs in the context of the global financial crisis of 2008, and find support for our hypotheses. We discuss implications for the dynamic capabilities view and MNE resilience.     

Innovation performance: The effect of knowledge-based dynamic capabilities in cross-country innovation ecosystems

This study operationalizes the knowledge-based dynamic capabilities (KBDC) that act as drivers of innovation performance in innovation ecosystems, across different market economies. Innovation ecosystems facilitate the flow of resources to transform ideas into reality. In turn, KBDC provide a means to create and share expertise, which contributes to the diversification of the economy, and allow businesses to reach beyond their own boundaries to create value for customers in new ways. Employing partial least squares path analysis, four constructs, namely knowledge creation, knowledge diffusion, knowledge absorption and knowledge impact, are comparatively analyzed. Across all four constructs, knowledge creation is the biggest driver of innovation performance, and the strongest predictor of innovation performance in developed and developing market economies. Knowledge absorption is the strongest predictor of innovation performance in transition economies. A KBDC-centered innovation ecosystem framework is proposed to highlight the innovation performance and competitive advantage inherent in each knowledge-related capability.     

Dynamic capabilities and firm performance in a financial crisis

In this study, an organization means an active actor that can, at least to some extent, adapt to the environment, mainly within the limits of its resources and capabilities. The article enhances understanding of and explains organizational adaptive behavior in weathering the storm in the business environment resulting from the global financial crisis of 2008. The literature on dynamic capabilities, organizational change, and innovation in the context of organizational performance and survival captures this kind of adaptive behavior. The empirical study builds on a quantitative survey and a qualitative case study covering the food processing, maritime, and media industries. Structural equation modeling, group analysis, and qualitative case comparisons shed light on the connection between the constructs in question. Implications for theory and practice culminate in suggestions for future research.     

The MNC as an externally embedded organization: An investigation of embeddedness overlap in local subsidiary networks

MNCs have been conceptualized as differentiated networks that, in turn, are embedded in external networks. Previous research has predominantly focused on the embeddedness of established subsidiaries into their local environment, omitting to shed light on the phenomenon of headquarters linkages to the local context which creates embeddedness overlap. We develop a model of why MNCs develop overlapping linkages to local subsidiary networks even if the subsidiaries have grown out of the initial start-up phase. Using detailed information on 168 European subsidiaries, we find that MNCs build and maintain more overlapping network ties when subsidiaries are high performers, hold important resources, operate in turbulent environments, and are closely connected to multinational actors as opposed to purely domestic firms.     

The function-specific microfoundations of dynamic capabilities in cross-border mergers and acquisitions

In mergers and acquisitions, the acquiring firm must combine two firms’ resources and capabilities so that the outcome yields value. In individual firms, the marketing & sales, and R&D functions have typically developed intertwined and complex relationships over time. These multifaceted dependencies may obscure the integration of the firms and their functions. In order to reveal to what extent cross-functional relationships determine the success or failure of an acquisitions, we have made one of the first attempts to study merging firms’ function-specific capabilities, underlying microfoundations, and their cross-functional relationships during the integration process—instead of focusing on acquisition capabilities as such. We use longitudinal data from two cross-border acquisitions between US and Finnish SMEs. Our results indicate that major differences between merging firms’ cross-functional microfoundations—that is, their structures, processes, routines, and skills—might either enforce or erode the seemingly promising synergies at the product and market levels, depending on managerial awareness of their nature.     

Core competences,strategy and performance: the case of international retailers in China

This research aims to analyse the central role of core competences in retail internationalisation. The authors analyse field data generated from in-depth interviews of top Chinese subsidiary managers, using the principles of the grounded theory methodology. The inductive process identified two types of core competences in the subsidiaries of international retailers: basic competences and architectural competences. This classification leads to research propositions on the impact of the core competences on strategy choice, and on the performance of the subsidiaries of international retailers.