Selection capability: How capability gaps and internal social frictions affect internal and external strategic renewal

Organization Science

Volumn 20, Issue 2, 2009, Pages 294-312

  Capron, Laurence ^a   Mitchell, Will ^b  

^a INSEAD   (France)

^b DUKE UNIVERSITY   (United States)

Author keywords

External sourcing; Institutional gap; Internal development; Modes of capability acquisition; Resource gap; Selection capability

Indexed keywords

EID: 70350378215     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.1070.0328     Document Type: Article

References (119)

1. Abernathy, W. J., K. B. Clark. 1985. Innovation: Mapping the winds of creative destruction. Res. Policy 14 3-22.
2. Abrahamson, A. A. 1991. Managerial fads and fashions: The diffusion and rejection of innovations. Acad. Management Rev. 16(3) 586-612.
3. Amit, R., P. J. H. Schoemaker. 1993. Strategic assets and organizational rent. Strategic Management J. 14 33-46.
4. Anderson, E., D. C. Schmittlein. 1984. Integration of the sales force: An empirical examination. RAND J. Econom. 15(3) 385-395.
5. Anderson, J. C., D. W. Gerbing. 1988. Structural equation modeling in practice: A review and recommended two-step approach. Psych. Bull. 103(3) 411-423.
6. Arbuckle, J. L. 2002. Amos 4.0. Users Guide. SPSS Inc., Chicago.
7. Armstrong, J. S., T. S. Overton. 1977. Estimating non-response bias in mail surveys. J. Marketing Res. 14 396-402.
8. Arora, A., A. Gambardella. 1990. Complementary and external linkages: The strategies of the large firms in biotechnology. J. Indust. Econom. 3(4) 361-379.
9. Barkema, H., F. Vermeulen. 1998. International expansion through start-up or acquisition: A learning perspective. Acad. Management J. 41 7-26.
10. Barney, J. 1999. How a firm's capabilities affect boundary decisions. Sloan Management Rev. 40(3) 137-145.
11. Bartlett, C., S. Ghoshal. 1989. Managing innovation in the transnational corporation. C. A. Bartlett, Y. Doz, G. Hedlund, eds. Managing the Global Firm. Routledge, London, New York, 215-255.
12. Baumgartner, H., J. B. Steenkamp. 2001. Responses styles in marketing research: A cross-national investigation. J. Marketing Res. 38 143-156.
13. Benson, D., R. H. Ziedonis. 2009. Corporate venture capital as a window on new technologies: Implications for the performance of corporate investors when acquiring startups. Organ. Sci. 20(2) 329-351.
14. Bollen, K. A. 1989. Structural Equations with Latent Variables. John Wiley, New York.
15. Bonardi, J.-P., A. J. Hillman, G. D. Keim. 2005. The attractiveness of political markets: Implications for firm strategy. Acad. Management Rev. 30(2) 397-413.
16. Capron, L. 1999. The long-term performance of horizontal acquisitions. Strategic Management J. 20 987-1018.
17. Capron, L., N. Pistre. 2002. When do acquirers earn abnormal returns? Strategic Management J. 23(9) 781-794.
18. Capron, L., P. Dussauge, W. Mitchell. 1998. Resource redeployment following horizontal acquisitions in Europe and North America, 1988-1992. Strategic Management J. 19(7) 631-661.
19. Carmines, E. G., R. A. Zeller. 1979. Reliability and Validity Assessment. Sage University Paper Series in Quantitative Applications in the Social Sciences. Sage, Beverly Hills, CA.
20. Carow, K., R. Heron, T. Saxton. 2004. Do early birds get the returns? An empirical investigation of early-mover advantages in acquisitions. Strategic Management J. 25 563-585.
21. Chatterjee, S. 1990. Excess capabilities, utilization costs, and mode of entry. Acad. Management J. 33 780-800.
22. Chen, P.-L., F. C. Williams, R. Agarwal. 2006. Flexibility and change: Growing through shifting technology standards in the U.S. cellular technology. Acad. Management Conf., August 11-16, Atlanta.
23. Chi, T. 1994. Trading in strategic capabilities: Necessary conditions, transaction cost problems, and choice of exchange structure. Strategic Management J. 15 271-290.
24. Cho, T. S., D. C. Hambrick. 2006. Attention as the mediator between top management team characteristics and strategic change: The case of airline deregulation. Organ. Sci. 17(4) 453-469.
25. Cohen, W. M., D. Levinthal. 1990. Absorptive capacity: A new perspective on learning and innovation. Admin. Sci. Quart. 35 128-152.
26. Cuervo-Cazurra, A. 1999. Resource development through the co-evolution of capabilities and scope. Unpublished doctoral dissertation, MIT, Boston.
27. Cyert, R. M., J. G. March. 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ.
28. D'Aveni, R. 1994. Hypercompetition: Managing the Dynamics of Strategic Maneuvering. Free Press, New York.
29. Delmas, M. 1999. Exposing strategic assets to create new competencies: The case of technological acquisition in the waste management industry in Europe and North America. Indust. Corporate Change 8(4) 635-671.
30. Delmas, M., Y. Tokat. 2005. Deregulation, governance structures, and efficiency: The U.S. electric utility sector. Strategic Management J. 26(5) 441-460.
31. Dierickx, I., K. Cool. 1989. Asset stock accumulation and sustainability of competitive advantage. Management Sci. 35 1504-1514.
32. Dillman, D. 1978. Mail and Telephone Surveys: The Total Design Method. Wiley, New York.
33. DiMaggio, P. J., W. W. Powell. 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. Amer. Sociol. Rev. 48 147-160.
34. Dosi, G. 1982. Technological paradigms and technological trajectories. Res. Policy 11 147-162.
35. Dosi, G., R. R. Nelson, S. G. Winter. 2000. Introduction: The nature and dynamics of organizational capabilities. G. Dosi, R. R. Nelson, S. G. Winter, eds. The Nature and Dynamics of Organizational Capabilities. Oxford University Press, New York.
36. Dussauge, P., B. Garrette, W. Mitchell. 2000. Learning from competing partners: Outcomes and durations of scale and link alliances in Europe, North America and Asia. Strategic Management J. 21 99-126.
37. Eisenhardt, K. M., J. A. Martin. 2000. Dynamic capabilities: What are they? Strategic Management J. 21 1105-1121.
38. Eisenhardt, K., C. Schoonhoven. 1990. Organizational growth: Linking founding team, strategy, environment, and growth among U.S. semiconductor ventures, 1978-1988. Admin. Sci. Quart. 35 504-529.
39. Fischoff, B. 1975. Hindsight/foresight: The effect of outcome knowledge on judgment under uncertainty. J. Experiment. Psych.: Human Perception Performance 1(3) 288-299.
40. Fornell, C., D. Larcker. 1981. Evaluating structural equation models with unobservable variables and measurement error. J. Marketing Res. 18 39-50.
41. Galunic, D. C., S. Rodan. 1998. Resource recombinations in the firm: Knowledge structures and the potential for Schumpetarian recombination. Strategic Management J. 19 1193-1201.
42. Gersick, C. J. G. 1991. Revolutionary change theories: A multilevel exploration of the punctuated equilibrium paradigm. Acad. Management Rev. 16 10-36.
43. Gibson, C. B., J. Birkinshaw. 2004. The antecedents, consequences and mediating role of organizational ambidexterity. Acad. Management J. 47(2) 209-226.
44. Ginsberg, A. 1994. Minding the competition: From mapping to mastery. Strategic Management J. 15 153-174.
45. Golden, B. R. 1992. The past is past-Or is it? The use of retrospective accounts as indicators of past strategy. Acad. Management J. 35 848-860.
46. Grant, R. 1996. Towards a knowledge-based theory of the firm. Strategic Management J. 17 109-122.
47. Greve, H. R., A. Taylor. 2000. Innovations as catalysts for organizational change. Admin. Sci. Quart. 45(1) 54-80.
48. Gulati, R., H. Singh. 1998. The architecture of cooperation: Managing coordination costs and appropriation concerns in strategic alliances. Admin. Sci. Quart. 43 781-814.
49. Hambrick, D. C., T. S. Cho, M. J. Chen. 1996. The influence of top management team heterogeneity on firms' competitive moves. Admin. Sci. Quart. 41 659-684.
50. Hannan, M. T., J. Freeman. 1984. Structural inertia and organizational change. Amer. Sociol. Rev. 49 149-164.
51. Helfat, C. E. 1994. Evolutionary trajectories in petroleum firm R&D. Management Sci. 40 1720-1747.
52. Helfat, C. E., M. B. Lieberman. 2002. The birth of capabilities: Market entry and the importance of pre-history. Indust. Corporate Change 11(4) 725-760.
53. Helfat, C. E., M. Peteraf. 2003. The dynamic-resource-based view: Capability lifecycles. Strategic Management J. 24(10) 997-1010.
54. Helfat, C. E., S. Finkelstein, W. Mitchell, M. A. Peteraf, H. Singh, D. J. Teece, S. G. Winter. 2006. Dynamic Capabilities: Understanding Strategic Change in Organizations. Blackwell, New York.
55. Henderson, R. M., K. B. Clark. 1990. Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Admin. Sci. Quart. 35 9-30.
56. Hennart, J. F., Y. Park. 1993. Greenfield vs. acquisition: The strategy of Japanese investors in the United States. Management Sci. 39 1054-1070.
57. Jacobides, M., S. Billinger. 2006. Designing the boundaries of the firm: From "Make, Buy, or Ally" to the dynamic benefits of vertical architecture. Organ. Sci. 17(2) 249-261.
58. Jacobides, M., S. Winter. 2005. The co-evolution of capabilities and transaction costs: Explaining the institutional structure of production. Strategic Management J. 26 395-413.
59. Jehn, K. 1997. A qualitative analysis of conflict types and dimensions in organizational change. Admin. Sci. Quart. 42 530-555.
60. Kale, P., J. H. Dyer, H. Singh. 2002. Alliance capability, stock market response, and long term alliance success: The role of the alliance function. Strategic Management J. 23 747-767.
61. Karim, S., W. Mitchell. 2000. Reconfiguring business resources following acquisitions in the U.S. medical sector, 1978-1995. Strategic Management J. 21 1061-1081.
62. Katila, R., A. Ahuja. 2002. Something old, something new: A longitudinal study of search behavior and new product introduction. Acad. Management J. 45(6) 1183-1194.
63. Kogut, B. 1991. Joint ventures and the option to expand and acquire. Management Sci. 37 19-33.
64. Kogut, B., U. Zander. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organ. Sci. 3 383-397.
65. Kogut, B., U. Zander. 1996. What firms do? Coordination, identity and learning. Organ. Sci. 7 502-518.
66. Kraatz, M., E. Zajac. 2001. How organizational resources affect strategic change and performance in turbulent environments: Theory and evidence. Organ. Sci. 12(5) 632-660.
67. Krishnan, R., J. Satish, H. Krishnan. 2004. The influence of mergers on firms' product-mix strategies. Strategic Management J. 25 587-611.
68. Lavie, D. 2006. Capability reconfiguration: An analysis of incumbent responses to technological change. Acad. Management Rev. 31(1) 153-174.
69. Leonard, D. 1995. Wellsprings of Knowledge. Harvard Business School Press, Boston.
70. Levinthal, D. A. 1991. Organizational adaptation and environmental selection-Interrelated processes of change. Organ. Sci. 2(1) 140-146.
71. Liebeskind, J. P. 1996. Knowledge, strategy, and the theory of the firm. Strategic Management J. 17 93-107.
72. Mayer, K., N. Argyres. 2004. Learning to contract: Evidence from the personal computer industry. Organ. Sci. 15(4) 394-411.
73. McGrath, J. E. 1984. Studying Groups. Prentice-Hall, Englewood Cliffs, NJ.
74. McNulty, T., A. Pettigrew. 1999. Strategists on the board. Organ. Stud. 20 47-74.
75. Menon, T., J. Pfeffer. 2003. Valuing internal vs. external knowledge: Explaining the preference for outsiders. Management Sci. 49(4) 497-514.
76. Miller, D. 1993. The architecture of simplicity. Acad. Management Rev. 14 116-138.
77. Mitchell, W. M. 1994. The dynamics of evolving markets: The effects of business sales and age on dissolutions and divestitures. Admin. Sci. Quart. 39(4) 575-602.
78. Monteverde, K., D. J. Teece. 1982. Supplier switching costs and vertical integration in the automobile industry. Bell J. Econom. 13 206-213.
79. Morck, R., B. Yeung. 1992. Internalization, An event study test. J. Internat. Econom. 33 41-56.
80. Nelson, R. R., S. G. Winter. 1982. An Evolutionary Theory of Economic Change. Belknap Press, Cambridge, UK.
81. Ocasio, W. 1997. Towards an attention-based view of the firm. Strategic Management J. 18 187-206.
82. Oliver, C. 1997. Sustainable competitive advantage: Combining institutional and resource-based views. Strategic Management J. 18 697-713.
83. Penrose, E. 1959. The Theory of the Growth of the Firm. John Wiley, New York.
84. Peteraf, M. A., J. B. Barney. 2003. Unraveling the resource-based tangle. Managerial Decision Econom. 24(4) 309-323.
85. Pisano, G. 1990. The R&D boundaries of the firm: An empirical analysis. Admin. Sci. Quart. 35 153-176.
86. Podsakoff, P. M., D. W. Organ. 1986. Self-reports in organizational research: Problems and prospects. J. Management 12(4) 531-544.
87. Podsakoff, P. M., S. B. MacKenzie, J. Lee, N. P. Podsakoff. 2003. Common method bias in behavioral research: A critical review of the literature and recommended remedies. J. Appl. Psych. 88(5) 879-903.
88. Powell, W. W., L. Smith-Doer. 1994. Networks and economic life. N. J. Smelser, R. Sweberg, eds. The Handbook of Economic Sociology. Princeton University Press, Princeton, NJ, 368-402.
89. Priem, R. L., J. E. Butler. 2001. Is the resource-based "view" a useful perspective for strategic management research? Acad. Management Rev. 26(1) 22-40.
90. Puranam, P., H. Singh, S. Chaudhuri. 2009. Integrating acquired capabilities: When structural integration is (un)necessary. Organ. Sci. 20(2) 313-328.
91. Rao, H., R. Drazin. 2002. Overcoming resource constraints on product innovation by recruiting talent from rivals: A study of the mutual fund industry, 1986-94. Acad. Management J. 45 491-507.
92. Reed, R., R. DeFillippi. 1990. Causal ambiguity, barriers to imitation and sustainable competitive advantage. Acad. Management Rev. 15(1) 88-102.
93. Romanelli, E., M. L. Tushman. 1994. Organizational transformation as punctuated equilibrium: An empirical test. Acad. Management J. 37 1141-1166.
94. Rosenkopf, L., P. Almeida. 2003. Overcoming local search through alliances and mobility. Management Sci. 49(6) 751-766.
95. Rosenkopf, L., A. Nerkar. 2001. Beyond local search: Boundaryspanning, exploration, and impact in the optical disc industry. Strategic Management J. 22 287-306.
96. Santos, F. M., K. K. Eisenhardt. 2005. Organizational boundaries and theories of organization. Organ. Sci. 16(5) 491-508.
97. Sastry, A. 1997. Problems and paradoxes in a model of punctuated organizational change. Admin. Sci. Quart. 42 237-275.
98. Scott, W. R. 1987. The adolescence of institutional theory. Admin. Sci. Quart. 32 493-511.
99. Shaver, M., W. Mitchell. 2003. Who buys what? How integration capability affects acquisition incidence and target choice. Strategic Organ. 1 171-202.
100. Siggelkow, N. 2001. Change in the presence of fit: The rise, the fall and the renaissance of Liz Clairbone. Acad. Management J. 44(4) 838-858.
101. Singh, K., W. Mitchell. 2005. Growth dynamics: The bi-directional relationship between interfirm collaboration and business sales in entrant and incumbent alliances. Strategic Management J. 26 497-522.
102. Stuart, T. E., J. M. Podolny. 1996. Local search and the evolution of technological capabilities. Strategic Management J. 17 21-38.
103. Sudman, S., N. M. Bradburn. 1973. Effects of time and memory on response. J. Amer. Statist. Assoc. 68(344) 805-815.
104. Szulanski, G. 1996. Exploring internal stickiness: Impediments to the transfer of best practice within the firm. Strategic Management J. 17 27-43.
105. Teece, D. J. 1986. Profiting from technological innovation: Implications for integration, collaboration, licensing, and public policy. Res. Policy 15 285-305.
106. Teece, D. J., G. Pisano, A. Shuen. 1997. Dynamic capabilities and strategic management. Strategic Management J. 18 509-533.
107. Tripsas, M., G. Gavetti. 2000. Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic Management J. 18 509-533.
108. Tushman, M. L., P. Anderson. 1986. Technological discontinuities and organizational environments. Admin. Sci. Quart. 31 439-465.
109. Tushman, M. L., C. A. O'Reilly. 1996. The ambidextrous organization: Managing evolutionary and revolutionary change. California Management Rev. 38(4) 8-30.
110. Uzzi, B. 1996. The sources and consequences of embeddedness for the economic performance of organizations: The network effect. Amer. Sociol. Rev. 61(4) 674-698.
111. Vermeulen, F., H. Barkema. 2001. Learning through acquisitions. Acad. Management J. 44(3) 457-476.
112. Walker, G., T. Madsen, G. Carini. 2002. How does institutional change affect heterogeneity among firms? Strategic Management J. 23(2) 89-105.
113. White, S. 2000. Competition, capabilities, and the make, buy, or ally decisions of Chinese state-owned firms. Acad. Management J. 43(3) 324-341.
114. Williams, C., W. Mitchell. 2004. Focusing firm evolution: The impact of information infrastructure on market entry by U.S telecommunications companies, 1994-1998. Management Sci. 50(11) 1561-1575.
115. Williamson, O. E. 1975. Markets and Hierarchies. Free Press, New York.
116. Winter, S. 1990. Survival, selection and inheritance in evolutionary theories of evolution. J. V. Singh, ed. Organizational Evolution: New Directions. Sage, Newbury Park, CA, 269-296.
117. Yip, G. S. 1982. Diversification entry: Internal development versus acquisition. Strategic Management J. 3 331-345.
118. Zollo, M., H. Singh. 2004. Deliberate learning in corporate acquisitions: Post-acquisition strategies and integration capability in U.S. bank mergers. Strategic Management J. 25 1233-1256.
119. Zollo, M., S. G. Winter. 2002. Deliberate learning and the evolution of dynamic capabilities. Organ. Sci. 13(3) 339-351