Developing dynamic capabilities through resource accretion: expanding the entrepreneurial solution space

Abstract

We report our findings from the analysis of crisis episodes that resulted in the development of new capabilities in eight small firms. When dealing with resource constraints in periods of crisis, entrepreneurs engaged in a number of actions to develop their firms' capabilities. By accreting resources such as knowledge, skills and other assets, entrepreneurs were able to expand their repertoire of potential solutions and change the firm's learning trajectory. Our contribution is to describe the process of resource accretion (the gradual accumulation and integration of resources) through grafting and bonding of capabilities into the firm's ambit, which is dependent on the proximities, salience and relationships of resources. We observe three patterns within the accretion pathways of the eight firms in the study, namely the combination of coping mechanisms, the extension of networks, and the reprisal of previously successful solutions. These activities support resource accretion and the subsequent expanded solution space where entrepreneurs begin the process of embedding new capabilities. Such coping routines are necessary antecedents for the development of nascent dynamic capabilities in small firms.

Effectual entrepreneuring: sensemaking in a family-based start-up

“…These interactive influences will be mediated by the 'effectual team learning' processes as entrepreneurs gain experience from their efforts to establish a new business. Ultimately, the influence of close family members will decline as individuals seek wider expertize and experience (Macpherson, Herbane, and Jones 2015;Überbacher 2014).…”

Expanding entrepreneurial solution spaces in times of crisis: Business model experimentation amongst packaged food and beverage ventures

“…In line with Macpherson et al. (2015) , we view crises as critical episodes for ventures, representing periods of concentrated activity and learning ( Cope, 2005 ; Schneider, 2019 ).…”

“…Our study pursued a two-fold design ( Appendices 2 and 3 ) in order to explore how entrepreneurs responded to the crisis, focused on understanding the responses taken by entrepreneurs during the time period when government-imposed restrictions were in place, hence the data collection spanning from the time when restrictions were introduced to the partial easing of the restrictions (mid-March to the end of May). Similar to Macpherson et al. (2015) , we view the crisis period as a critical episode of concentrated activity and learning ( Cope, 2005 ) and build on a critical incident approach ( Flanagan, 1954 ; Chell, 2004 ).…”

“…(2020 :5) suggesting that the Covid-19 pandemic can “give the permission to hustle”, freeing “entrepreneurial actors from the perceived constraints or limitations that they typically face in their day-to-day work environments”. Macpherson, Herbane and Jones (2015) also found entrepreneurs to expand the solution space of their venture through resource accretion prompted by crises. However, these studies focused on organization-specific or market-specific crises where the entrepreneurs were able to leverage skills and resources from stakeholders largely unaffected by the change or crisis.…”

Competence modelling for export performance improvement in Ethiopia

“…those knowledge intensive and performance-enhancing business activities at which the organization has become particularly skilled (Macpherson et al, 2015;Murry et al, 2011;Wu et al, 2007;Teece et al, 1997). The DCV, on the other hand, addresses the evolutionary nature of firms' resources (Teece et al, 1997).…”