Implementing dynamic capabilities for corporate strategic change toward sustainability

Abstract

Dynamic scanning, identification, and reconfiguration capabilities can facilitate firms' strategic change toward sustainability and higher competitive advantage in an evolving market environment.

Environmental regulations, innovation and firm performance: A revisit of the Porter hypothesis

“…If regulations are flexible enough firms can choose to adopt a dynamic approach to improving environmental performance by: (1) redesigning polluting production processes; (2) the adoption of environmental management practices such as energy conservation and waste management; and (3) strategically positioning themselves as a leader in environmental protection (Wu et al, 2012). Alternatively, they might choose to carry on as before, paying increasing taxes and levies resulting from the regulations, and/or implementing costly end-of-pipe solutions.…”

How dynamic capabilities affect adoption of management innovations

“…Given that the context in which firms deal with various emerging sustainable issues is highly complex and sometimes ambiguous, some studies suggest that dynamic capabilities be applied throughout the entire process by which firms undertake sustainable innovation. For example, Clausen's (2013) research shows both direct and indirect relationships between dynamic capabilities and management innovation; Kohlbacher (2013) empirically examines the impact of dynamic capabilities on innovation performance through continuous improvement; Lazonick and Prencipe (2005) seek to analyze the role of dynamic capabilities in sustaining the entire innovation process, and argue that innovation depends on 'strategic control' and 'financial commitment' (i.e., two dynamic capabilities); Liao et al (2009) argue that the firm's ability to mobilize its resources and capabilities and align them dynamically with changing opportunities is of vital importance to constantly innovate, survive and create a competitive advantage and Wu, He, Duan, and O'Regan (2012) show that dynamic capabilities facilitate firms' strategic changes toward sustainability and higher competitive advantage through searching, prioritizing, positioning, planning, modifying, and leveraging. In summary, researchers emphasize the relationship between dynamic capabilities and management innovation throughout the process, and argue that a firm's dynamic capabilities could significantly enhance its ability to innovate, especially in the case of radical management innovation (O'Conner, 2008).…”

“…Therefore, such research reflects a macro-level of analysis emphasizing the key role of dynamic capabilities in strategic management (Teece et al, 1997). From a similar macrolevel, and seeing dynamic capabilities as the antecedent organizational routines by which managers alter their resource deployment to generate new value-creation strategies (Eisenhardt & Martin, 2000), Wu et al (2012) identify three distinct but related dynamic capabilities: scanning, identification, and reconfiguration capabilities. From a micro-level of analysis, Helfat & Peteraf (2003) and Helfat et al (2007) argue that dynamic capabilities could be people-resource based or material-resource based.…”

Building Theory at the Intersection of Ecological Sustainability and Strategic Management

“…Borland and Lindgreen (2013), Gladwin et al (1995), Iyer (1999), and Purser et al (1995) have started examining marketing and management aspects from an ecocentric perspective, yet the field remains underresearched, with a dearth of investigations of strategy and, in particular, the dynamic capabilities view of the firm using anything but a conventional, anthropocentric perspective (Castiaux 2012;Wu et al 2012). A dynamic capabilities view-which primarily addresses how firms renew and refresh their valuable resources and capabilities in changing environments to maintain their competitive advantage by engaging in sensing, seizing, and reconfiguring activities (Teece 2007;Teece et al 1997)-also might inform perspectives on ecocentrism and ecological sustainability.…”