Session 4

Processes and Practices of Building Dynamic Capabilities

Track D

Date: Thursday, March 18, 2010


Time: 17:00 – 18:30


Room: Kokoustila 4

Session Chair:

Title: Dynamic Capabilities as the Catalyst of Operational Capability Development


  • Hanna-Kaisa Ellonen, Lappeenranta University of Technology
  • Ari Jantunen, Lappeenranta University of Technology
  • Olli Kuivalainen, Lappeenranta University of Technology

Abstract: The purpose of this study is to explore the role the dynamic capabilities have in the development of operational capabilities. As dynamic capabilities by nature are processes and practices that advocate change, we aim to uncover the actual practices through which change strategies are implemented. Our research includes a single case study from the publishing industry. Building on a triangulated data set of interviews and secondary data we analyze the development of their capabilities over the time period of five years. The results of the study imply that dynamic capabilities act as a catalyst and spark off the mechanisms of operational capability development. Our study demonstrates how different types of dynamic capabilities (sensing, seizing and reconfiguring) all have an impact of the development of market and technological capabilities.

Title: Dynamic Human Capital Strategy: A New Way to Strategic Human Resource Management


  • Christian Scholz, University of Saarland
  • Stefanie Müller, University of Saarland

Abstract: Human capital is crucial to survive in a competitive environment: But how to create, use, measure, and develop these human assets in a strategically both dynamic and sustainable way? To provide some tentative suggestions as how to answer these questions, we present evidences from an empirical study of the German DAX 30 companies. It shows which human capital strategies these companies follow and it allows conclusions as how to deliver an additional value in strategy process and practice. Our study was able to predict the breakdown of the German Hypo Real Estate Holding, by locating a high risk in their human capital equipment and strategy. In this paper we build upon the potential of merging the logic of human capital management with the logic of dynamic capabilities, allowing us to give new insights in both bodies of knowledge.

Title: Flexible Resources Availability as Decisive Root of Dynamic Competencies


  • Volker Stein, University of Siegen
  • Torsten Klein, ThyssenKrupp Steel AG

Abstract: In research on organizational competencies, it is undoubted that the “logic of stabilization” will no longer meet the dynamic requirements of fast changing environments. Organizational research perceives an urgent need for dynamization of organizational competencies, as different approaches concerning dynamic capabilities show. Most of them discuss prerequisites for dynamization such as organizational learning. Interestingly, they tend to neglect the resources themselves. However, since organizational competencies are configurations of resources, dynamization cannot be discussed without stressing resource acquisition and strategic resource positioning for reconfiguration. This conference paper will present a concept of flexible resources availability as decisive root of dynamic competencies. Based on the “logic of dynamization”, it will show how internal and external organizational slack contribute to the dynamization-oriented reconfiguration of organizational competencies.

Title: Flexible Strategy Execution: A Matter of Options and Capabilities


  • Ronald Klingebiel, Frankfurt School of Finance and Management

Abstract: Strategic options theory maintains that, in uncertain markets, firms investing in suitable flexibility outperform those that do not. But do all firms manage to benefit from flexibility? In this paper, I analyse the life of 61 options, each created for and exercised during the execution of separate firms’ strategic initiatives. Though each option was valuable, there was significant variation in the degree to which firms actually realised performance benefit. The variance seems to result from heterogeneous organisational capability, not only regarding option creation but also option maintenance, exercise, and governance. This implies that realisable option value is firm-specific. Holding valuable options does not predict performance unless accompanied by active management of the option lifecycle. The paper thus contributes to an augmented options perspective that helps to explain performance differentials among firms in uncertain markets.

Title: Real-Time Human Capital Valuation: Tentative Results to an Innovative Strategy Practice from German SME


  • Volker Stein, University of Siegen
  • Christian Scholz, University of Saarland
  • Ingo Juergens, University of Siegen
  • Stefanie Müller, University of Saarland

Abstract: For companies, innovations are crucial for survival in a competitive world. Exceeding technical innovations, they can also relate to the way in which companies deal with their resources. Taking human resources not just as pure cost factors but as important owners of skills, competencies, and experience, we must look for an innovative strategy of dealing with these resources. The objective of this conference paper is to contribute an innovative advancement to human capital strategy by using a monetary human capital valuation, which works in real-time. Tentative findings from an empirical research project show that real-time human capital valuation is possible, and how the results can be integrated in a dynamic human capital reporting. Experiences with three German SMEs proof the benefits of such an approach.

All Sessions in Track D...

Thu: 13:15 – 14:45
Session 2: Capability Dynamics in MNCs
Thu: 15:15 – 16:45
Session 6: Processes and Practices of Decision Making
Thu: 17:00 – 18:30
Session 4: Processes and Practices of Building Dynamic Capabilities
Fri: 10:15 – 11:45
Session 7: Orchestrating Dynamic Capabilities
Fri: 13:15 – 14:45
Session 8: Operationalizing the Concept of Dynamic Capabilities

Strategic Management Society