organizational capabilities and agility studies · organizational capabilities and agility studies...

Organizational capabilities and agility studies

Raimo Hälinen 27.8.2019 Metodifestivaali, Tampereen yliopisto

Raimo Hälinen 27.8.2019 Metodifestivaali, Tampereen yliopisto 1


The research questions are:1. What is ordinal and dynamic organizational capabilities?2. How to measure dynamic organizational capabilities?3. What is the value of the dynamic organizational capabilities?4. How is it possible to integrate agile software development methods to

organizational processes and activities and to achieve agility?5. How is reasonable to measure agility in organizational level, group level,

and team level? 6. Is the dynamic organizational capabilities a better concept to use in the

organizational studies.7. Is the agility similar concept as is the flexibility?



Schumpeter’s (1934, p. 66) concept of new combination:

1. The introduction of a new good

2. The introduction of new method of production

3. The opening of a new market

4. The conquest of a new source of supply or raw materials of half-manufactured goods

5. The carrying out of the new organization of any industry.

Drucker (1984, p. 35-36) the source of innovation:

1. The unexpected success, failure

2. The incongruity between reality as it is actually and reality as it is assumed

3. Innovation based on process need

4. Changes in industry structure or market structure

5. Demographics

6. Changes in perception, mood, and meaning

7. New knowledge, both scientific and non-scientific



The concepts of organizational capabilities:

1. Ordinal organizational capabilities

2. Dynamic organizational capabilities

3. Organizational agility

The resource-based view or theory of the firm (RBV or RBT)

(Schumpeter 1934, Porter (1979), Nelson and Winter (1982), Wernerfelt (1984), Drucker (1984), Prahalad and Hamel (1990), Barney (1991), Grant (1996), Teece and Pisano (1997),Eisenhardt and Martin (2000)


Organizational capabilities and agility studiesGill and Delahaye (2004) suggested the model of organizational capability based on three domains:

• Strategic intent (RBTF)

• Explicit direction, qualities of workforce, inform organizational processes, inform future direction

• Organizational structure

• Meaningful job roles, guided performance management

• Individual knowledge

• Clearly defined core knowledge , skills , and abilities



Source: Sambamurthy et al. (2003, p. 254)




Source: Shreyögg G. , and M. Kliech-Eberl (2007), p. 924



Source: Teece D.J. (2018, p. 44, and Teece D.J. (2017, p. 363


Schilke O., S. Hu, and C.E. Helfat(2018) conducted systematic literature review, in which they explored both theoretical and empirical studies concerning dynamic organizational capabilities from 2008 to 2016).

Suggestions for future researches are:

1) Mixed-method studies

2) Archival data and empirical proxy variables

3) Meta-analyses




Source: Galliers R.D. (2007), and Mårtensson (2007)


Oosterhout et al. (2007) studied business agility in Netherland.

Research question:

What are the contributing factors that require business agility, and what IT strategies can be implemented for enhancing business agility?

Results: Business agility is the ability to sense highly uncertain external and internal changes and respond reactively or proactively, based on innovation of the internal operational processes, involving the customer in exploration and exploitation while leveraging the capabilities of partners in the business network.


Organizational capabilities and agility studiesConboy and Fitzgerald (2007) proposed a framework for agile system development. The idea is originally from the agile alliance’s manifesto. Agile methods were suggested to use for software development.

e.g. eXtreme programming (XP), Scrum, Lean programming, rational unified process.

The definition of agile: “it is the continual readiness of an entity to rapidly or inherently create change, proactively or reactively embrace change, and learn from change, through customer value-adding components and relationships with its environment.”


Source: Comboy and Fitzgerald (2007)


Leffingwell et al. (2016) in Scaled Agile Framework for enterprise suggested to think agile software development work in large-organizations applying lean-agile mindset as it is illustrated in the SAFe house of lean.


Organizational capabilities and agility studiesLaaksonen and Peltoniemi (2018) conducted systematic literature review of dynamic capabilities and their measurement.

Dynamic capabilities are operationalized using by the following:

1. Managers’ evaluations

2. Financial data

3. Company’s experience, actions, and performance

4. Managers’ or employees’ experience, actions, and performance.


Synthesis of recommendations


Laaksonen and Peltoniemi (2018, p.193

Organizational capabilities and agility studiesReferences

Coase R.H. (1937), The nature of the firm, Economica, New Series, Vol. 4, No. 16, pp. 386-405.

Collis D.J. (1994), Research note: how valuable are organizational capabilities?, Strategic Management Journal, Vol. 15, pp. 143-152.

Conner K.R. and C.K. Prahalad (1996), A resource-based theory of the firm: knowledge versus opportunism, Organization science, Vol. 7, Issue 5, pp. 477-501.

Desouza K. C. (2007), Agile information systems: conceptualization, construction, and management, Elsevier Inc.

Drucker P. F. (1984), Innovation and entrepreneurship, practice, and principles, Harper &Row, New York,

Eisenhardt K. M. and J. A. Martin (2000), Dynamic capabilities: what are they?, Strategic Management Journal, Vol. 21, pp. 1105-1121.

Grant R. M (1996), Toward a knowledge-based theory of the firm, Strategic Management Journal, Vol. 17, special issue, pp. 109-122.

Laaksonen, O., & Peltoniemi, M. (2018). The Essence of Dynamic Capabilities and their Measurement. International Journal of Management Reviews, 20 (2), 184-205. doi:10.1111/ijmr.12122

Laanti M. (2012), Agile methods in large-scale software development organizations, applicability and model for adoption, University of Oulu graduate school, Faculty of science, Department of information processing science, A605.

Lu Y, and K. (Ram) Rahamurthy (2011), Understanding the link between information technology capability and organizational agility: am empirical examination, MIS Quarterly, Vo. 34, No. 4, pp. 931-954.

Madsen Lier E. (2010), A dynamic capability framework – generic types of dynamic capabilities and their relationship to entrepreneurship. In Wall S. C. Zimmerman, R. Klingebiel, and D. Lange (eds,) Strategic reconfiguration: Building dynamic capabilities in rapid-innovation-based industries, Cheltenham, Edward Elgar.

Mathiassen L. and J. Pries-Heje (2006), Business agility and diffusion of information technology, European Journal of Information Systems, Vol. 15, pp. 116-119.



References

Nelson R.R. and S.G. Winter (1982), An evolutionary theory of economic change, the President and Fellows of Harvard College,

Polanyi M. (1948/1962), Personal knowledge, towards a post-critical philosophy, Routledge, London.

Schumpeter J. (1934), The theory of economic development, Cambridge, MA, Harvard University Press.

Tallon P.P., M. Queiroz, T. Coltman, and R. Sharma (2019), Information technology and the search for organizational agility: a systematic review with future research possibilities, Journal of Strategic Information Systems, Vol. 28, pp. 218-237.

Teece D. and G. Pisano (1994), The dynamic capabilities of firms: An introduction, Working paper, WP-94-103, IIASA, International Institute for Applied Systems Analysis, Laxenburg, Austria.

Teece D.J. (2012), Dynamic capabilities: Routines versus Enterpreneurial action, Journal of Management Studies, Vol. 49, No. 8, pp. 1395-1401.

Teece D., M. Peteraf, and S. Leih (2016), Dynamic capabilities and organizational agility: risk, uncertainty, and strategy in the innovation economy, California Management Review, Vol. 58, No. 4, pp. 13-35.

Teece D. J. (2017), Dynamic capabilities as (workable) management systems theory, Journal of Management & Organization, Vol. 24,No. 3, pp. 359-368.

Teece D.J. (2018), Business models and dynamic capabilities, Long Range Planning, Vol. 51, pp. 40-49.

Wang X., and Y Zeng (2017), Organizational capability Model: toward improving organizational performance, Transactions of SDPS: Journal of Integrated Design and Process Science, Vol. 21, No. 1, pp. 5-24.


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