Workshop proceeding - final.pdf - Faculty of Information and ...

Developing Dynamic Capability through Partnership: The Role of
Capabilities
Wei Jiang 1 * , Felix Mavondo 1
* Presenter
1. Department of Marketing, Monash University, Clayton Compus, Wellington Rd, Clayton
3800, Australia
Partnerships have been adopted by most organizations as a major source of competitive
advantage and to manage technological turbulence and dynamic market environments. The
paper aims to investigate some key organizational capabilities in partnerships that were
proposed to contribute to the improvement of the organization’s agility—a dynamic capability
for managing capricious environments. The role of trust between partnering organizations as a
moderating variable is examined. A samples (n=300) from Chinese managers in
manufacturing industries was used for this study. The results indicate that trust is an important
moderator of the relationship between market orientation and learning orientation and
organisational agility.
1. Introduction
The business environment has been described in the literature as hyper turbulent, unpredictable,
hypercompetitive [39] [42] [45]. Environmental changes force acquired skills and capabilities to
become obsolete or create new opportunities, both of which may require firms to build new
capabilities [3]. Failure or slowness of building new capabilities endangers firm’s prosperity or even
survival. Such environments, thus, have been recognized as the cause of most organizations’ failures
[38]. Dynamic capability theory contends that dynamic capabilities underlie the source of sustainable
competitive advantage in such market environments; they are the important mechanisms for
reconfiguring, recombining and deleting ordinary organizational resources to achieve a fit with the
environment and strategic imperatives [43] [50] [28]. Despite its importance to firm development and
the scholarly attention devoted to it, dynamic capability remains underspecified [3], and empirical
work is still in its infancy [36] [55]. It has been generally acknowledged in the literature that firms can
develop dynamic capabilities through long-term partnerships [53], but ‘the how question’ has not been
systematically conceptualized or empirically grounded. To address this gap, this research seeks to
examine the implications of organizational capabilities for the development of dynamic capabilities
and to identify any boundary limiting conditions. Since trust is an important relational variable this is
conceptualized as a possible boundary condition—a moderator of the various relationships.
The paper is organized as follows: first, the conceptual framework is presented. Second, relevant
literatures and propositions are presented, followed by a discussion of methodological issues. Finally,
the results and discussion are presented with limitations of the study and its potential implications for
managers and academics.
2. Literature review
2.1. Dynamic capability
Dynamic capability theory provides a compelling explanation for the ability of some companies to
continuously create, define, discover and exploit entrepreneurial opportunities [55]. It proposes that
possessing strategic resources and capabilities is not a sufficient condition to generate rents, but that
the dynamic capabilities which grow and evolve in response to the external environment are the real
source of rent generation [44]. Capabilities are the skills and routines that combine both tangible and
intangible resources together coherently in a synergistic manner to enable firms to produce efficiently
and/or effectively valued market offerings [5]. While dynamic capabilities can be any capabilities
which enable firm to modify its resources and routines to changing environment, so it can continue
producing market offerings efficiently and/or effectively [28] [55].
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