Designing organizations for dynamic capabilities

California Management Review

Volumn 58, Issue 4, 2016, Pages 78-96

  Felin, Teppo ^a   Powell, Thomas C ^a  

^a UNIVERSITY OF OXFORD   (United Kingdom)

Author keywords

Crowds; Dynamic capabilities; Innovation; Organizational design; Seizing; Sensing; Strategic management

Indexed keywords

EID: 84989318656     PISSN: 00081256     EISSN: 21628564     Source Type: Journal    
DOI: 10.1525/cmr.2016.58.4.78     Document Type: Article

References (81)

1. We gathered information about Valve Corporation by interviewing Greg Coomer, one of the first employees of the company and the primary author of Valve: Handbook for New Employees.
2. See Valve: Handbook for New Employees, First Edition, March 2012.
3. For press coverage about the company, see "Game Maker Without a Rule Book", New York Times, September 8, 2012, p. BU1.
4. For an employee account of working at Valve, see Michael Abrash, "Valve: How I Got Here, What It's Like, and What I'm Doing", .
5. For a recent presentation about the structure of Valve, see Greg Coomer, "Welcome to Flatland", Seattle Interactive Conference, October 15-16, 2012, .
6. For example: D. J. Teece, G. Pisano, and A. Shuen, "Dynamic Capabilities and Strategic Management", Strategic Management Journal, 18/7(August 1997):509-533;
7. D. J. Teece, "Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance", Strategic Management Journal, 28/13(December 2007):1319-1350;
8. D. J. Teece, Dynamic Capabilities and Strategic Management (Oxford: Oxford University Press, 2009);
9. D. J. Teece, "The Foundations of Enterprise Performance: Dynamic and Ordinary Capabilities in an (Economic) Theory of Firms", Academy of Management Perspectives, 28/1(November 2014):328-352.
10. For a review of definitions of capabilities, see I. Barreto, "Dynamic Capabilities: A Review of Past Research and an Agenda for the Future", Journal of Management, 36/1(January 2010):256-280.
11. G. McNamara, P. M. Vaaler, and C. Devers, "Same as it Ever Was: The Search for Evidence of Increasing Hypercompetition", Strategic Management Journal, 24/3(March 2003):261-278.
12. Also see H. Mintzberg, "That's not 'Turbulence', Chicken Little, It's Really Opportunity", Planning Review, 22/6(November/December 1994):7-9.
13. See: G. Verona and D. Ravasi, "Unbundling Dynamic Capabilities: An Exploratory Study of Continuous Product Innovation", Industrial and Corporate Change, 12/3(2003):577-606;
14. C. Salvato, "Capabilities Unveiled: The Role of Ordinary Activities in the Evolution of Product Development Processes", Organization Science, 20/2(2009):384-409.
15. For an article on the link between dynamic capabilities, resource alteration, and cognition, see E. Danneels, "Trying to Become a Different Type of Company: Dynamic Capability at Smith Corona", Strategic Management Journal, 32/1(January 2011):1-31.
16. A. Stinchcombe, Information and Organizations (Berkeley, CA: University of California Press, 1990), p. 32.
17. K. Arrow, The Limits of Organization (New York, NY: W. W. Norton, 1974).
18. S. Kerr, "On the Folly of Rewarding A While Hoping for B", Academy of Management Journal, 18/4(December 1975):769-783.
19. For further discussion, see: P. Lawrence and J. Lorsch, Organization and Environment: Managing Differentiation and Integration (Cambridge MA: Harvard University Press, 1967);
20. T. Burns and G. M. Stalker, The Management of Innovation (London: Tavistock, 1961);
21. J. G. March and H. A. Simon, Organizations (New York, NY: Wiley, 1958);
22. R. E. Miles and C. Snow, Organizational Strategy, Structure, and Process (Stanford CA: Stanford University Press, 2008).
23. For applications of organization theory to strategies in high technology industries, see: T. C Powell, "Firm-Specific Competitive Advantage in High-Technology Firms", Journal of High Technology Management Research, 4/2(Autumn 1993):197-209;
24. D. J. Teece, "Firm Organization, Industrial Structure, and Technological Innovation", Journal of Economic Behavior & Organization, 31/2(November 1996):193-224.
25. For example, see R. Dahl, Polyarchy: Participation and Opposition (New Haven, CT: Yale University Press, 1971).
26. See R. Dahl, A Preface to Democratic Theory (Chicago, IL: University of Chicago Press, 1956).
27. R. K. Sah and J. E. Stiglitz, "The Architecture of Economic Systems: Hierarchies and Polyarchies", American Economic Review, 76/4(September 1986):716-727;
28. T. Knudsen and D. Levinthal, "Two Faces of Search: Alternative Generation and Alternative Evaluation", Organization Science, 18/1(January/February 2007):39-54;
29. F. Csaszar and J. P. Eggers, "Organizational Decision Making: An Information Aggregation View", Management Science, 59/10(October 2013):2257-2277.
30. See T. Felin, T. Zenger, and J. Tomsik, "The Knowledge Economy: Emerging Organizational Forms, Missing Microfoundations, and Key Considerations for Managing Human Capital", Human Resource Management, 48/4(July/August 2009):555-570;
31. D. J. Teece, "Expert Talent and the Design of (Professional Services) Firms", Industrial and Corporate Change, 12/4(2003):895-916;
32. F. A. Csaszar, "Organizational Structure as a Determinant of Performance: Evidence from Mutual Funds", Strategic Management Journal, 33/6(June 2012):611-632;
33. M. Reitzig and B. Maciejovsky", Corporate Hierarchy and Vertical Information Flow inside the Firm: A B ehavioral View", Strategic Management Journal, 36/13(December 2015):1979-1999.
34. R. Smith, "Valve to Showcase SteamVR Hardware, Steam Machines and More at the GDC 2015", Anandtech Hardware Magazine, Febuary 23, 2015;
35. K. Boudreau and K. R. Lakhani, "Using the Crowd as an Innovation Partner", Harvard Business Review, 91/4(April 2013):61-69.
36. R. B. Cialdini, Influence: How and Why People Agree on Things (New York, NY: 1984).
37. C. Stangor, Social Groups in Action and Interaction (New York, NY: Psychology Press, 2004);
38. G. Le Bon, The Crowd: A Study of the Popular Mind (New York, NY: MacMillan, 1896);
39. S. Freud, Group Psychology and the Analysis of the Ego (London: International Psychoanalytic Press, 1922).
40. T. Felin and T. Zenger, "Information Aggregation, Matching and Radical Market-Hierarchy Hybrids: Implications for the Theory of the Firm", Strategic Organization, 9/2(May 2011):163-173;
41. K. Croxson, "Information Markets for Decision Making: Performance and Feasibility", Oxford University Working Paper.
42. T. Felin, "Cosmologies of Capability, Markets and Wisdom of Crowds", Managerial and Decision Economics, 33/5-6(July-September 2012):283-294;
43. J. Surowiecki, Wisdom of Crowds (New York, NY: Doubleday, 2004).
44. For an excellent, recent managerial piece, see H. Courtney, D. Lovallo, and C. Clarke, "Deciding How to Decide", Harvard Business Review, 91/11(November 2013):62-70.
45. N. Foss, "Selective Intervention and Internal Hybrids: Interpreting and Learning from the Rise and Decline of the Oticon Spaghetti Organization", Organization Science, 14/3(May/June 2003):331-349;
46. T. Zenger and W. S. Hesterly, "The Disaggregation of Corporations: Selective Intervention, High-Powered Incentives, and Molecular Units", Organization Science, 8/3(May/June 1997):209-222.
47. R. R. Faulkner and A. B. Anderson, "Short-Term Projects and Emergent Careers: Evidence from Hollywood", American Journal of Sociology, 92/4(January 1987):879-909.
48. Also see: J. Lampel and J. Shamsie, "Capabilities in Motion: New Organizational Forms and the Reshaping of the Hollywood Movie Industry", Journal of Management Studies, 40/8(December 2003):2189-2210;
49. S. Deakin, A. Lourenco, and S. Pratten, "No 'Third Way' for Economic Organization? Networks and Quasi-MarketsinBroadcasting", Industrial and Corporate Change, 18/1(February 2009):51-75.
50. D. Adam, "What Hollywood Can Teach Us about the Future of Work", New York Times, May 5, 2015.
51. E. Schmidt, J. Rosenberg, and A. Eagle, How Google Works (New York, NY: Grand Central Publishing, 2014).
52. For example, see J. B. Harreld, C. A. O'Reilly, and M. L. Tushman, "Dynamic Capabilities at IBM: Driving Strategy into Action", California Management Review, 49/4(Summer 2007):21-43.
53. D. Sumpter, Collective Animal Behavior (Princeton, NJ: Princeton University Press, 2010).
54. M. Diehl and W. Stroebe, "Productivity Loss in Brainstorming Groups: Toward the Solution of a Riddle", Journal of Personality and Social Psychology, 53/3(September 1987):497-509;
55. S. E. Asch, "Group Forces in the Modification and Distortion of Judgments", in S. E. Asch, Social Psychology (New York, NY: Prentice-Hall, 1952), pp. 450-501.
56. For example, see K. E. Stanovich, Rationality and the Reflective Mind (New York, NY: Oxford University Press, 2011).
57. For additional work on the relationship between individual and group biases, see W. G. Luhan, M. G. Kocher, and M. Sutter, "Group Polarization in the Team Dictator Game Reconsidered", Experimental Economics, 12/1(March 2009):26-41.
58. Also see M. G. Kocher and M. Sutter, "The Decision Maker Matters: Individual Versus Group Behavior in Experimental Beauty Contest Games", The Economic Journal, 115/500(January 2005):200-223.
59. T. C. Powell, D. Lovallo, and C. R. Fox, "Behavioral Strategy", Strategic Management Journal, 32/13(December 2011):1369-1386;
60. D. Lovallo and O. Sibony, "The Case for Behavioral Strategy", McKinsey Quarterly, Issue 2(March 2010):1-16.
61. T. C. Powell, "Neurostrategy", Strategic Management Journal, 32/13(December 2011):1484-1499.
62. R. H. Thaler and C. R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008);
63. C. Heath, R. P. Larrick, and J. Klayman, "Cognitive Repairs: How Organizations Compensate for the Shortcomings of Individual Learners", Research in Organizational Behavior, 20(1998):1-37;
64. D. Kahneman and D. Lovallo, "Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk-Taking", Management Science, 39/1(January 1993):17-31;
65. D. A. Levinthal and J. G. March, "The Myopia of Learning", Strategic Management Journal, 14(Winter 1993):95-112.
66. B. Levitt and J. G. March, "Organizational Learning", Annual Review of Sociology, 14(1988):319-340.
67. T. C. Powell, "Strategic Management and the Person", Strategic Organization, 12/3(August 2014):200-207.
68. D. V. Budescu and E. Chen, "Identifying Expertise to Extract the Wisdom of Crowds", Management Science, 61/2(February 2015):267-280.
69. T. Felin and T. R. Zenger, "Closed or Open Innovation: Problem Solving and the Governance Choice", Research Policy, 43/5(June 2014):914-925;
70. H. W. Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology (Boston, MA: Harvard Business School Press, 2003).
71. L. B. Jeppesen and L. Frederiksen, "Why Do Users Contribute to Firm-Hosted User Communities: The Case of Computer-Controlled Music Instruments", Organization Science, 17/1(January/February 2006):45-63;
72. N. Franke and S. Shah, "How Communities Support Innovative Activities: An Explorationof Assistance and Sharing among End Users", Research Policy, 32/1(January 2003):157-178.
73. L. Dahlander and H. Piezunka, "Open to Suggestions: How Organizations Elicit Suggestions through Proactive and Reactive Attention", Research Policy, 43/5(June 2014):812-827.
74. K. J. Boudreau, N. Lacetera, and K. R. Lakhani, "Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis", Management Science, 57/5(May 2011):843-867.
75. L. B. Jeppesen and K. R. Lakhani, "Marginality and Problem-Solving Effectiveness in Broadcast Search", Organization Science, 21/5(September/October 2010):1016-1033.
76. P. Belleflamme, T. Lambert, and A. Schwienbacher, "Crowdfunding: Tapping the Right Crowd", Journal of Business Venturing, 29/5(September 2014):585-609.
77. For example, see: O. E. Williamson, "Strategy Research: Governance and Competence Perspectives", Strategic Management Journal, 20/12(December 1999):1087-1108;
78. T. C. Powell, "Competitive Advantage: Logical and Philosophical Considerations", Strategic Management Journal, 22/9(September 2001):875-888;
79. S. G. Winter, "Understanding Dynamic Capabilities", Strategic Management Journal, 24/10(October 2003):991-995;
80. M. Peteraf, G. Di Stefano, and G. Verona, "The Elephant in the Room of Dynamic Capabilities: Bringing Two Diverging Conversations Together", Strategic Management Journal, 34/12(December 2013):1389-1410;
81. J. Denrell and T. C. Powell, "Dynamic Capability as a Theory of Competitive Advantage: Contributions and Scope Conditions", in S. Leih and D. Teece, eds., Oxford Handbook of Dynamic Capabilities (forthcoming 2016).