Explaining the Causes and Effects of Dynamic Capabilities Generation: A Multiple‐Indicator Multiple‐Cause Modelling Approach
| DOI | http://doi.org/10.1111/j.1467-8551.2012.00829.x |
| Author | Vanesa Barrales‐Molina,Óscar F. Bustinza,Leopoldo J. Gutiérrez‐Gutiérrez |
| Published date | 01 December 2013 |
| Date | 01 December 2013 |
Explaining the Causes and Effects of
Dynamic Capabilities Generation:
A Multiple-Indicator Multiple-Cause
Modelling Approach*
Vanesa Barrales-Molina, Óscar F. Bustinza and
Leopoldo J. Gutiérrez-Gutiérrez
University of Granada, School of Business and Economics, Campus Cartuja, s. n. E-18071 Granada, Spain
Corresponding author email: vanesabm@ugr.es
The purpose of this paper is to develop a multiple-indicator multiple-cause model to
explain dynamic capabilities generation. We use one of the main common effects of
dynamic capabilities (operational, structural and strategic flexibility) to design a meas-
urement tool for dynamic capabilities generation. Based on this measurement tool, we
test the influence of several factors identified in the specialized literature as potential
causes that trigger and promote dynamic capabilities generation. We use data from a
survey of 200 CEOs of Spanish firms to test the model. The results show that only
organizations whose managers have perceived a high degree of environmental dynamism
have generated dynamic capabilities. The results also show that knowledge codification
and technical innovation are significantly related to dynamic capabilities generation. We
attempt to shed light on current theoretical debates about dynamic capabilities genera-
tion and provide a practical guide to explain the origin and results of dynamic capabili-
ties that have been tested empirically.
Introduction
In recent years, dynamic capabilities have become
one of the most active research areas in the
field of strategic management (Hodgkinson and
Healey, 2011). Teece, Pisano and Shuen (1997, p.
516) developed the first definition of dynamic
capabilities, using it to refer to the firm’s abilities
to integrate, construct and reconfigure internal
and external competences and thus to respond to
competitive environments rapidly. Since the pub-
lication of this seminal paper, many scholars have
attempted to develop a framework to explain
how firms can generate and use such dynamic
capabilities.
The growing interest in this topic has generated
a rich but complex body of research that points in
different directions (Barreto, 2010). Most contri-
butions are theoretical and study the concept,
nature and role of dynamic capabilities, the
mechanisms for their creation and generation,
and their results. Despite this effort, the concept is
still in need of theoretical and empirical develop-
ment (Ambrosini and Bowman, 2009; Di Stefano,
Peteraf and Verona, 2010). There is still no con-
sensus on the conceptualization of key features of
dynamic capabilities, although scholars in the
field express the urgent need for a coherent theory
and model of dynamic capabilities (Arend and
Bromiley, 2009; Katkalo, Pitelis and Teece, 2010).
Empirical studies represent the main challenge in
*A free Teaching and Learning Guide to accompany this
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journal/10.1111/(ISSN)1467-8551/homepage/teaching
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British Journal of Management, Vol. 24, 571–591 (2013)
DOI: 10.1111/j.1467-8551.2012.00829.x
© 2012 The Author(s)
British Journal of Management © 2012 British Academy of Management. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
this field, as they may help to resolve the discrep-
ancies between the diverse understandings and
theoretical interpretations (Easterby-Smith, Lyles
and Peteraf, 2009).
Recent empirical work on dynamic capabilities
measures primarily either their components or a
specific dynamic capability. For example, Pavlou
and El Sawy (2011) measure four components of
dynamic capabilities (sensing capability, learn-
ing capability, integrating capability and coordi-
nating capability). Lee, Hung-Hsin and Shyr
(2011) measure alliance development as a specific
dynamic capability. We find few studies, however,
that use the effects and outcomes to study dynamic
capabilities. Moreover, many issues concerning
the process of dynamic capabilities generation
have yet to be analysed, enabling simultaneous
integration of the origins and the outcomes.
To resolve the issues explained above, we have
developed a multiple-indicators and multiple-
causes (MIMIC) model (Bohrnstedt, 1977;
Jöreskog and Goldberger, 1975). This methodo-
logy has not been used to explain how organiza-
tions develop dynamic capabilities, but it is
appropriate for studying the theoretical causes
and effects of a latent phenomenon (Maltritz,
Bühn and Eichler, 2012; Rahman, Mittelhammer
and Wandschneider, 2010) such as dynamic capa-
bilities generation. Our first goal will thus be to
design a measurement tool for the level of
dynamic capabilities generation, using the main
outcomes or effects. Our second goal is to test the
influence of a set of theoretical antecedents of
dynamic capabilities generation, such as environ-
mental dynamism, learning mechanisms and tech-
nical innovation.
The analysis was conducted using data from
200 CEOs of Spanish firms from different indus-
try sectors in the economy. The results indicate
that perceived dynamism in the competitive envi-
ronment, technical innovation and the promotion
of learning mechanisms (such as knowledge codi-
fication) are significantly related to dynamic capa-
bilities generation. The MIMIC model also allows
us to study the relative importance of the causes
of dynamic capabilities generation. We find that
knowledge codification exerts the strongest influ-
ence on the process, although environmental
dynamism has a nearly equivalent influence.
Our study contributes to the literature by devel-
oping a simple model to operationalize and
measure dynamic capabilities generation. The
empirical results of this model can be extrapolated
to the study of any dynamic capability. The main
difficulties in explaining dynamic capabilities
derive from their heterogeneity: (i) organizations
can use different dynamic capabilities to obtain
the same goal (long-term competitive advantage),
and (ii) the nature of dynamic capabilities is idi-
osyncratic (even when organizations generate the
same dynamic capability). We thus find multiple
different paths for generating dynamic capabili-
ties. Despite this, scholars recommend focusing
on commonalities of dynamic capabilities to
develop empirical studies (Barreto, 2010; Wang
and Ahmed, 2007). We thus measure dynamic
capabilities generation through three indicators of
organizational flexibility that can be identified as
the common outcome of any dynamic capability
(Pavlou and El Sawy, 2011; Volberda, 1996; Zollo
and Winter, 2002; Zott, 2003). Additionally, we
study the influence of the most discussed anteced-
ents of any dynamic capability with the aim of
shedding light on theoretical debates in the
specialized literature.
The paper proceeds as follows. We first describe
the main features of the theory of dynamic capa-
bilities. Next, we present the details of the MIMIC
model used in this paper and the set of hypoth-
eses. We then present the research methodology
and results. The final section includes the discus-
sion of results, managerial implications, future
research lines and limitations.
Theoretical framework, MIMIC model
and hypotheses
Literature review
The dynamic capabilities view has evolved from
the resources and capabilities theory (Barney,
1991; Peteraf, 1993; Wernerfelt, 1984). This
theory proposes to identify the conditions under
which firms achieve sustained competitive advan-
tage based on their resources and capabilities
(valuable, rare, inimitable and non-substitutable).
The theory is extremely valuable for developing
studies in strategic management, but it has some
limitations in explaining how competitive advan-
tage evolves when firms are facing hypercompeti-
tive environments. As a result, Teece, Pisano and
Shuen (1997) published a seminal article to intro-
duce the concept of dynamic capabilities. Since
then, several authors have suggested alternative
572 V. Barrales-Molina, Ó. F. Bustinza and L. J. Gutiérrez-Gutiérrez
© 2012 The Author(s)
British Journal of Management © 2012 British Academy of Management.
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