Technological capabilities and firm performance: The case of small manufacturing firms in Japan

The purpose of this study is to investigate the relationship between technological capabilities and firm performance. We divide technological capabilities into two types—refinement capability, which involves the improvement of the existing asset portfolio, and reconfiguration capability, which involves the restructuring of the asset portfolio through the integration of new assets. The results of an analysis of a sample of 302 small and medium-sized manufacturing firms in Japan suggest that refinement capability relates more positively to operational efficiency than does reconfiguration capability, and that reconfiguration capability relates more positively to strategic performance than does refinement capability. The results also suggest that firms with superior refinement capability tend to possess superior reconfiguration capability. Our findings show that both external and internal factors, such as technological volatility, inter-firm collaboration, and firm age and size, are significantly associated with the level of refinement and reconfiguration capabilities possessed by a firm.

[1]  J. Scott Armstrong,et al.  Estimating nonresponse bias in mail surveys. , 1977 .

[2]  Richard Makadok.  Toward a synthesis of the resource‐based and dynamic‐capability views of rent creation , 2001 .

[3]  A. Zaheer,et al.  Bridging ties: a source of firm heterogeneity in competitive capabilities , 1999 .

[4]  P. Schoemaker,et al.  Strategic assets and organizational rent , 1993 .

[5]  B. Hamilton,et al.  Correcting for Endogeneity in Strategic Management Research , 2003 .

[6]  P. M. Podsakoff,et al.  Self-Reports in Organizational Research: Problems and Prospects , 1986 .

[7]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[8]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[9]  D. Leonard-Barton.  CORE CAPABILITIES AND CORE RIGIDITIES: A PARADOX IN MANAGING NEW PRODUCT DEVELOPMENT , 1992 .

[10]  Margaret A. Peteraf.  The cornerstones of competitive advantage: A resource‐based view , 1993 .

[11]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[12]  R. Gulati.  Network location and learning: the influence of network resources and firm capabilities on alliance formation , 1999 .

[13]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[14]  M. Hitt,et al.  Corporate distinctive competence, strategy, industry and performance , 1985 .

[15]  Cynthia A. Montgomery,et al.  An Exploration of Common Ground: Integrating Evolutionary and Strategic Theories of the Firm , 1995 .

[16]  Karel Cool,et al.  Asset stock accumulation and sustainability of competitive advantage , 1989 .

[17]  J. Mathews.  Dragon multinationals: New players in 21st century globalization , 2006 .

[18]  Richard N. Langlois,et al.  Capabilities and Coherence in Firms and Markets , 1995 .

[19]  Peter J. Lane,et al.  Strategizing Throughout the Organization: Managing Role Conflict in Strategic Renewal , 2000 .

[20]  J. March.  Exploration and exploitation in organizational learning , 1991, STUDI ORGANIZZATIVI.

[21]  Richard L. Priem,et al.  Is the Resource-Based “View” a Useful Perspective for Strategic Management Research? , 2001 .

[22]  Phillip H. Phan,et al.  Knowledge Creation in Strategic Alliances: Another Look at Organizational Learning , 2000 .

[23]  Peter J. Lane,et al.  Relative absorptive capacity and interorganizational learning , 1998 .

[24]  B. Kogut,et al.  Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology , 1992 .

[25]  Choonwoo Lee,et al.  Internal capabilities, external linkages, and performance. A study on technology-based ventures , 2001 .

[26]  M. Porter.  Towards a dynamic theory of strategy , 1991 .

[27]  W. Mitchell.  Whether and When? Probability and Timing of Incumbents' Entry into Emerging Industrial Subfields , 1989 .

[28]  Daniel A. Levinthal,et al.  Co-Evolution of Capabilities and Industry: The Evolution of Mutual Fund Processing , 1994 .

[29]  Constance E. Helfat,et al.  Know-how and asset complementarity and dynamic capability accumulation : The case of R&D , 1997 .

[30]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[31]  J. E. Butler,et al.  Tautology in the resource-based view and the implications of externally determined resource value: f , 2001 .

[32]  John A. Mathews,et al.  Competitive Advantages of the Latecomer Firm: A Resource-Based Account of Industrial Catch-Up Strategies , 2002 .

[33]  F. Rothaermel.  Strategic Management Journal Research Note Incumbent's Advantage through Exploiting Complementary Assets via Interfirm Cooperation , 2022 .

[34]  K. Eisenhardt,et al.  The Art of Continuous Change : Linking Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations , 1997 .

[35]  Mikael Holmqvist,et al.  Experiential Learning Processes of Exploitation and Exploration Within and Between Organisations : An Empirical Study of Product Development, Department of Business Studies , 2003 .

[36]  Joel A. C. Baum,et al.  Don't go it alone: alliance network composition and startups' performance in Canadian biotechnology , 2000 .

[37]  W. Powell,et al.  Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology. , 1996 .

[38]  Robert E. Hoskisson,et al.  BOARD OF DIRECTOR INVOLVEMENT IN RESTRUCTURING: THE EFFECTS OF BOARD VERSUS MANAGERIAL CONTROLS , 1993 .

[39]  M. Tushman.  Special Boundary Roles in the Innovation Process. , 1977 .

[40]  W. Mitchell,et al.  Path-dependent and path-breaking change: reconfiguring business resources following acquisitions in the U.S. medical sector, 1978–1995 , 2000 .

[41]  Sidney G. Winter,et al.  FOUR Rs OF PROFITABILITY: RENTS, RESOURCES, ROUTINES, AND REPLICATION , 1995 .

[42]  J. Pennings,et al.  Internal capabilities, external networks, and performance: a study on technology‐based ventures , 2001 .

[43]  R. Duane Ireland,et al.  MERGERS AND ACQUISITIONS AND MANAGERIAL COMMITMENT TO INNOVATION IN M-FORM FIRMS , 1990 .

[44]  K. Boal,et al.  Strategic resources: Traits, configurations and paths to sustainable competitive advantage , 2007 .

[45]  J. Nunnally.  Psychometric Theory (2nd ed), New York: McGraw-Hill. , 1978 .

[46]  M. Tushman,et al.  Technological Discontinuities and Organizational Environments , 1986 .

[47]  E. Penrose.  The theory of the growth of the firm twenty-five years after , 1960 .

[48]  I. Cockburn,et al.  Measuring competence?: exploring firm effects in pharmaceutical research , 1994 .

[49]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[50]  G. Hamel.  Competition for competence and interpartner learning within international strategic alliances , 1991 .

[51]  K. R. Conner.  A Historical Comparison of Resource-Based Theory and Five Schools of Thought Within Industrial Organization Economics: Do We Have a New Theory of the Firm? , 1991 .

[52]  Andrew Delios,et al.  What determines the scope of the firm over time and around the world? An Asia Pacific perspective , 2007 .

[53]  Garry D. Bruton,et al.  Knowledge management in technology-focused firms in emerging economies: Caveats on capabilities, networks, and real options , 2007 .