The process of dynamic capability emergence in technology start-ups – an exploratory longitudinal study in China

This study examines what exactly dynamic capabilities look like in technology start-ups and how they emerge and evolve in the emerging market of China. Employing a case-based research method, our findings reveal that the evolutionary path of these start-ups is different than that of well-established firms. Specifically, for a start-up, (1) capabilities of sensing opportunities are shaped by the entrepreneur's existent knowledge and past experience, as well as swiftly adapted in response to external feedback over time; (2) unique competences and fast-acting capabilities at seizing opportunities rely heavily on the mobilisation and orchestration of external complementary resources; (3) a start-up is more nimble in reconfiguring internal resources and external contacts to embrace opportunities to change directions and address threats during the exploration phase and (4) capabilities of sensing, together with capabilities of seizing and transforming or/(re)configuring, form a cycle for the development of dynamic capabilities in a start-up. These results contribute to the research of dynamic capability by empirically grounding the conceptual discussion of dynamic capabilities in technology start-ups and advancing our understanding of the emergence of dynamic capabilities from scratch.

[1]  Kathleen M. Eisenhardt,et al.  Theory Building From Cases: Opportunities And Challenges , 2007 .

[2]  Roberto Filippini,et al.  Integration capabilities as mediator of product development practices-performance , 2013 .

[3]  Nicholas Dew,et al.  On the entrepreneurial genesis of new markets: effectual transformations versus causal search and selection , 2011 .

[4]  Xiaofeng Ma,et al.  Closing the gap: How should Chinese companies build the capabilities to implement ERP-driven process innovation? , 2007, Int. J. Technol. Manag..

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

[6]  Lars Mathiassen,et al.  Dynamic Capabilities in Small Software Firms: A Sense-and-Respond Approach , 2007, IEEE Transactions on Engineering Management.

[7]  Gianmario Verona,et al.  Dynamic Marketing Capabilities in Science-Based Firms: An Exploratory Investigation of the Pharmaceutical Industry , 2009 .

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

[9]  Catherine L. Wang,et al.  Dynamic Capabilities: A Review and Research Agenda , 2007 .

[10]  Frank Schirmer,et al.  Das duale Prozessmodell dynamischer Fähigkeiten – (Mikro-)Politische Desiderata und Rekonstruktionsperspektiven , 2013 .

[11]  Maurizio Zollo,et al.  Deliberate Learning and the Evolution of Dynamic Capabilities , 2002 .

[12]  Yu Cui,et al.  When should organizational change be implemented? The moderating effect of environmental dynamism between dynamic capabilities and new venture performance , 2013 .

[13]  Christine Nadel,et al.  Case Study Research Design And Methods , 2016 .

[14]  Mike Wright,et al.  Critical junctures in the development of university high-tech spinout companies , 2004 .

[15]  Constance E. Helfat,et al.  Understanding dynamic capabilities: progress along a developmental path , 2009 .

[16]  Marjorie A. Lyles,et al.  Dynamic Capabilities: Current Debates and Future Directions , 2009 .

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

[18]  D. Teece.  Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance , 2007 .

[19]  Christopher L. Tucci,et al.  Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities , 2002, Manag. Sci..

[20]  S. Winter.  Understanding dynamic capabilities , 2003 .

[21]  R. Yin,et al.  Case Study Research: Design and Methods (4th ed. , 2009 .

[22]  K. Seers.  Qualitative data analysis , 2011, Evidence Based Nursing.

[23]  Lei-Yu Wu,et al.  Entrepreneurial resources, dynamic capabilities and start-up performance of Taiwan's high-tech firms , 2007 .

[24]  Gregory N. Stock,et al.  Building Dynamic Capabilities in New Product Development through Intertemporal Integration , 2003 .

[25]  Benyamin B. Lichtenstein,et al.  The Role of Organizational Learning in the Opportunity–Recognition Process , 2005 .

[26]  O. Jones,et al.  Inter-organizational learning and strategic renewal in SMEs: extending the 4I Framework , 2006 .

[27]  Kathrin M. Möslein,et al.  Selection strategies for discontinuous innovation , 2011, Int. J. Technol. Manag..

[28]  Darren Dalcher,et al.  Developing Knowledge Management Capabilities: A Structured Approach , 2011, J. Knowl. Manag..

[29]  Christoph Zott,et al.  DYNAMIC CAPABILITIES AND THE EMERGENCE OF INTRAINDUSTRY DIFFERENTIAL FIRM PERFORMANCE: INSIGHTS FROM A SIMULATION STUDY , 2003 .

[30]  David G. Hoopes,et al.  A capability-based view of competitive heterogeneity , 2008 .

[31]  P. Davidsson,et al.  From Resource Base to Dynamic Capabilities: An Investigation of New Firms , 2009 .

[32]  S. Zahra,et al.  A Capabilities Perspective on the Effects of Early Internationalization on Firm Survival and Growth , 2006 .

[33]  Chris J. Sablynski,et al.  Qualitative Research in Organizational and Vocational Psychology, 1979–1999 , 1999 .

[34]  John H. Friar,et al.  Instilling the Entrepreneurial Spirit in Your R&D Team: What Large Firms Can Learn from Successful Start-ups , 2012, IEEE Transactions on Engineering Management.

[35]  Sidney G. Winter,et al.  Capabilities: Their Origins and Ancestry , 2012 .

[36]  R. Hill,et al.  Metaphors and Mental Models: Sensemaking and Sensegiving in Innovative and Entrepreneurial Activities , 1995 .

[37]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[38]  S. Zahra,et al.  Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda , 2006 .

[39]  Haiyang Li,et al.  Innovation search of new ventures in a technology cluster: the role of ties with service intermediaries , 2010 .

[40]  Erwin Danneels.  Trying to become a different type of company: dynamic capability at Smith Corona , 2011 .

[41]  R. Garud,et al.  Bricolage versus breakthrough: distributed and embedded agency in technology entrepreneurship , 2003 .

[42]  Scott Shane,et al.  Guest editors' introduction to the special issue on technology entrepreneurship , 2003 .

[43]  Matthew S. Wood,et al.  THE PRODUCTION OF ENTREPRENEURIAL OPPORTUNITY: A CONSTRUCTIVIST PERSPECTIVE (SUMMARY) , 2010 .

[44]  M. Feldman,et al.  Reconceptualizing Organizational Routines as a Source of Flexibility and Change , 2003 .

[45]  Andrew Campbell.  Corporate-level strategy , 2013 .

[46]  David Obstfeld,et al.  Creative Projects: A Less Routine Approach Toward Getting New Things Done , 2012, Organ. Sci..

[47]  Jing Li,et al.  DEVELOPMENT OF GEOGRAPHIC INFORMATION SYSTEMS (GIS) IN CHINA: AN OVERVIEW , 2002 .

[48]  Martha S. Feldman,et al.  Dynamics of Organizational Routines: A Generative Model , 2012 .

[49]  David J. Teece,et al.  Dynamic Capabilities: Routines versus Entrepreneurial Action , 2012 .

[50]  Lowell W. Busenitz,et al.  Dynamic capabilities and venture performance: The effects of venture capitalists , 2006 .

[51]  A. Langley.  Strategies for Theorizing from Process Data , 1999 .

[52]  Anne S. Miner,et al.  Improvising firms: bricolage, account giving and improvisational competencies in the founding process , 2003 .

[53]  V. Ambrosini,et al.  How the Resource‐based and the Dynamic Capability Views of the Firm Inform Corporate‐level Strategy , 2003 .

[54]  M. Magnusson,et al.  Dynamic Capabilities in Early-Phase Entrepreneurship , 2006 .

[55]  Alison Kraft,et al.  Corporate venturing: the origins of Unilever's pregnancy test , 2004 .

[56]  Carlo Salvato,et al.  Capabilities Unveiled: The Role of Ordinary Activities in the Evolution of Product Development Processes , 2009, Organ. Sci..

[57]  S. Shane,et al.  Does business planning facilitate the development of new ventures , 2003 .