The emergent literature on dynamic capabilities and their role in value creation is riddled with inconsistencies, overlapping definitions, and outright contradictions. Yet, the theoretical and practical importance of developing and applying dynamic capabilities to sustain a firm's competitive advantage in complex and volatile external environments has catapulted this issue to the forefront of the research agendas of many scholars. In this paper, we offer a definition of dynamic capabilities, separating them from substantive capabilities as well as from their antecedents and consequences. We also present a set of propositions that outline (1) how substantive capabilities and dynamic capabilities are related to one another, (2) how this relationship is moderated by organizational knowledge and skills, (3) how organizational age affects the speed of utilization of dynamic capabilities and the learning mode used in organizational change, and (4) how organizational knowledge and market dynamism affect the likely value of dynamic capabilities. Our discussion and model help to delineate key differences in the dynamic capabilities that new ventures and established companies have, revealing a key source of strategic heterogeneity between these firms.

Employing a sample of 180 entrepreneurial high‐technology ventures based in the United Kingdom, we examine the effects of social capital in key customer relationships on knowledge acquisition and knowledge exploitation. Building on the relational view and on social capital and knowledge‐based theories, we propose that social capital facilitates external knowledge acquisition in key customer relationships and that such knowledge mediates the relationship between social capital and knowledge exploitation for competitive advantage. Our results indicate that the social interaction and network ties dimensions of social capital are indeed associated with greater knowledge acquisition, but that the relationship quality dimension is negatively associated with knowledge acquisition. Knowledge acquisition is, in turn, positively associated with knowledge exploitation for competitive advantage through new product development, technological distinctiveness, and sales cost efficiency. Further, our results provide evidence that knowledge acquisition plays a mediating role between social capital and knowledge exploitation. Copyright © 2001 John Wiley & Sons, Ltd.

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This study examined the antecedents and outcomes of the internationalization of 61 new high-potential ventures in the U.S. The results indicate that internationalization is directly related to the use of product differentiation as a source of competitive advantage, the international work experience of the board of directors, and size at the point of the IPO. The use of low cost, product differentiation, or innovation as a source of competitive advantage, and size at the point of the IPO were directly related to sales growth in the two-year period following the IPO. Finally, the level of Internationalization at the time of the IPO is positively related to earnings two years later.

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There is mounting evidence that effective top management teams engage in cognitive conflict but limit affective conflict. Cognitive conflict is task-oriented disagreement arising from differences in perspective. Affective conflict is individual-oriented disagreement arising from personal disaffection. This study of 48 TMTs found that team size and openness were positively related to cognitive conflict. While team size was also associated with greater affective conflict, when teams had high levels of mutuality, greater openness led to less affective conflict. The findings have implications for improving strategic decision making through the use of conflict.