‘Meso’‐Foundations of Dynamic Capabilities: Team‐Level Synthesis and Distributed Leadership as the Source of Dynamic Creativity

Abstract

Plain language summary Globalization has transformed the international business environment into an increasingly more complex, uncertain, and diverse entity. Multinational enterprises are under greater pressure to develop their dynamic capabilities to not only adapt to, but also proactively cope with, the speed and complexities of the fast‐changing environment. Some research suggests that dynamic capabilities are closely correlated with top management functions, while counterarguments stress that dynamic capabilities are embedded in organizational activities. From the perspective of organizational knowledge creation, making a distinction between the creative and adaptive aspects of dynamic capabilities, this article argues that ‘creative’ dynamic capabilities are rooted in the activities of teams in middle levels of the organization. The article also presents leadership practices that are favorable to fostering dynamic capabilities. Technical summary This article examines the theoretical foundations of an organization's dynamic capabilities—sensing, seizing, and transforming—from the perspective of organizational knowledge creation. Making a distinction between the creative and adaptive aspects of dynamic capabilities, this article argues that the foundation of creative aspect is ‘meso:’ it stems from team‐level interactions of frontline workers' capabilities facilitated by middle managers, rather than from individual‐level (or micro‐level) capabilities. In this middle‐up‐down management model, top management sets the vision of the organization, but middle managers grasp and solve the gap between the top and the frontline by facilitating team‐level dialectic interactions of employees. The leadership practices of both top and middle management that facilitate this process are illustrated with four Japanese multinational companies—Fujifilm, Eisai, Mayekawa Manufacturing, and Toyota. Copyright © 2016 Strategic Management Society.

Developing dynamic capabilities to survive a crisis: Tourism organizations' responses to continued turbulence in Libya

“…A recent study introduced the dynamic capabilities perspective as a means for tourism businesses to convert resources into competitive advantage (Otengei, Bakunda, Ngoma, Ntayi, & Munene, ). Studying dynamic capabilities in specific local contexts helps to understand how firms access the knowledge embedded in these contexts to find solutions during critical national conditions (Nonaka, Hirose, & Takeda, ). Access to external sources of information and the ability to respond to identified changes are especially important for effectively assessing and dealing with critical external conditions when firm survival is in question (Nonaka et al, ; Otengei et al, ).…”

“…Dynamic capabilities enable firms to initiate the process of repositioning themselves in the environment in which they operate and create new value (Lessard, Teece, & Leih, ; Teece, ; Teece et al, ). Scholars representing a knowledge‐based perspective on the development of dynamic capabilities emphasize the two important aspects of dynamic capabilities, namely, adaptive and creative capabilities (Nonaka et al, ). As Nonaka (, p. 14) argues, “any organisation that dynamically deals with a changing environment ought not only to process information efficiently (to be adaptive) but also create information and knowledge (to be creative).” Although the process of interaction between adaptive and creative capabilities is well studied in the context of changing market conditions, the specific types of dynamic capabilities in conditions of market survival remain unexplored.…”

Dynamic Capabilities for Accreditation: Evidence in the Healthcare Sector

“…In line with such argument, Schoemaker, Heaton and Teece (2018) underscore how important it is that upper management get involved in the development of (and support for) dynamic capabilities in the organization. To Nonaka, Hirose and Takeda (2016), upper management has the mission to empower the tactical and operational levels with adequate resources to develop the dynamic capabilities necessary to the organization.…”

Introduction to special topic forum on developing the dynamic capabilities of global companies across levels and locations

“…Nonaka, Hirose, and Takeda (, this issue) link the concept of DCs to Nonaka's well‐established perspectives on knowledge—namely that tacit knowledge inevitably is embedded in a local context and that exploiting this knowledge across multiple national contexts requires a capability that will be unique to each organization. Using the cases of four Japanese multinational companies, Fujifilm, Eisai, Mayekawa Manufacturing, and Toyota, they show that sensing, seizing, and transforming are both top‐down and middle‐up processes, an important extension of the usual DC emphasis on top management orchestration.…”

“…While the Chinese firms in Williamson's article are not yet MNEs, those in Henisz conform—at least in this local embeddedness dimension—to the ‘polycentric’ model described by Hedlund (). Firms following Nonaka et al .’s (, this issue) model fall into another category, in which local knowledge, typically from the home country, is applied globally. This is more or less the classic model of the MNE.…”