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Why Firms Win

Why Firms Win

Samuel_Phineas_Upham
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Why Firms Win

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  1. Why Firms Win By Samuel PhineasUpham

  2. The Dynamic Capabilities View • Might explain why some firms have sustainable competitive advantage • Powerful group of ideas that: • Explains successes, failures, and sources of struggle • Valuable in times of uncertainty to change • Added value overstated

  3. Organizational Capabilities and Behavior • Nelson and Winter’s point of view: • Individuals: skilled behavior is a product of routine, tacit knowledge and past behavior/learning. • Author’s argument: • decisions in organizations may not be optimal • where organizational memory exists • Authors generalize from individual view to apply “evolutionary economics” to organizational level. • Theory builds up from the micro to the macro level: • conceptual parallel between micro and macro • causal link between behavior of individuals and nature and behavior of capabilities

  4. Truce Between Motivations • Organizational routines allow for organizational capabilities. • This view provides the foundation of the capabilities view and also generates some interesting consequences. • organizational routines resist changes • organizational capabilities are very hard to imitate • This resistance to change: can be seen as a competitive advantage. • Path dependency and lack of simplicity of capabilities lends the power as sources of durable competitive advantage.

  5. Not of the Common Garden Variety • Capabilities cannot be of the common garden variety if they are to be valuable. • Jay Barney (1991) • If capabilities are to confer strategic advantage, they must be of a special type. • Dericks and Cool (1989) • Describe strategic asset stocks seen as flowing over time – either rising or falling. • Many capabilities grow over time, they cannot be acquired immediately. • Jan Rivkin (2001) • describes how capabilities must not be too complex • nor to simple • Capabilities must be of a certain sort to be durable competitive advantages

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