Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-22T14:04:49.417Z Has data issue: false hasContentIssue false
  • English
  • Français

Effect of relational capability on dynamic capability: exploring the role of competitive intensity and environmental uncertainty

Published online by Cambridge University Press:  16 May 2022

Ritu Singh Open the ORCID record for Ritu Singh [Opens in a new window] ,
Parikshit Charan  and
Manojit Chattopadhyay
Ritu Singh*
Affiliation:
Operations Management & Quantitative Techniques, International Management Institute Bhubaneswar, Gothapatna, Malipada, Chandaka, Bhubaneswar, Odisha 751003, India
Parikshit Charan
Affiliation:
Operations & Quantitative Methods, Indian Institute of Management Raipur, Atal Nagar, Kurru, Raipur, Chhattisgarh 493661, India
Manojit Chattopadhyay
Affiliation:
IT and Systems, Indian Institute of Management Raipur, Atal Nagar, Kurru, Raipur, Chhattisgarh 493661, India
*
*Corresponding to author: E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This study empirically examines the role of market dynamism and a firm's relational capability in the development of dynamic capability. A moderated hierarchical regression method has been used on the survey data of 218 Indian firms to test the objectives of the study. The findings suggest that relational capability (namely, customer linking capability and strategic partnering capability) is an important driver of dynamic capability. However, the effectiveness of relational capability is dependent on the market dynamism; particularly, when competition intensifies, the impact of customer linking capability declines, whereas the impact of strategic partnering capability on dynamic capability becomes stronger. Furthermore, the finding suggests that even though environmental uncertainty represents an important element of market dynamism, it is a driver, rather than a moderator, of dynamic capability. The study contributes to the extant literature by explicitly specifying the relational capability as a specific competence to develop dynamic capability under different market conditions.

Keywords

Competitive intensitydynamic capabilityemerging economiesenvironmental uncertaintyrelational capability
Type
Research Article
Information
Journal of Management & Organization , Volume 28 , Special Issue 3: Dynamic Capabilities: New Ideas , May 2022 , pp. 659 - 680
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2022

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adomako, S., Danso, A., Boso, N., & Narteh, B. (2018). Entrepreneurial alertness and new venture performance: Facilitating roles of networking capability. International Small Business Journal, 36(5), 453–472.CrossRefGoogle Scholar
Agarwal, R., & Selen, W. (2013). The incremental and cumulative effects of dynamic capability building on service innovation in collaborative service organizations. Journal of Management & Organization, 19(5), 521–543.CrossRefGoogle Scholar
Allen, N. J., & Grisaffe, D. B. (2001). Employee commitment to the organization and customer reactions: Mapping the linkages. Human Resource Management Review, 11(3), 209–236.CrossRefGoogle Scholar
Ambrosini, V., Bowman, C., & Collier, N. (2009). Dynamic capabilities: An exploration of how firms renew their resource base. British Journal of Management, 20, S9–S24. https://doi.org/10.1111/j.1467-8551.2008.00610.x.CrossRefGoogle Scholar
Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 14(3), 396–402. https://doi.org/10.1177%2F002224377701400320.CrossRefGoogle Scholar
Arndt, F. (2019). Dynamic capabilities: A retrospective, state-of-the-art, and future research agenda. Journal of Management & Organization, 20(2), 1–4.CrossRefGoogle Scholar
Arndt, F., & Bach, N. (2015). Evolutionary and ecological conceptualization of dynamic capabilities: Identifying elements of the Teece and Eisenhardt schools. Journal of Management & Organization, 21(5), 701–704.CrossRefGoogle Scholar
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99–120.CrossRefGoogle Scholar
Biesenthal, C., Gudergan, S., & Ambrosini, V. (2019). The role of ostensive and performative routine aspects in dynamic capability deployment at different organizational levels. Long Range Planning, 52(3), 350–365.CrossRefGoogle Scholar
Bitencourt, C. C., de Oliveira Santini, F., Ladeira, W. J., Santos, A. C., & Teixeira, E. K. (2020). The extended dynamic capabilities model: A meta-analysis. European Management Journal, 38(1), 108–120.CrossRefGoogle Scholar
Christensen, C. M., & Bower, J. L. (1996). Customer power, strategic investment, and the failure of leading firms. Strategic Management Journal, 17(3), 197–218.3.0.CO;2-U>CrossRefGoogle Scholar
Cohen, P., West, S. G., & Aiken, L. S. (2014). Applied multiple regression/correlation analysis for the behavioral sciences (2nd Ed.), New York, Psychology Press.CrossRefGoogle Scholar
Conner, K. R., & Prahalad, C. K. (1996). A resource-based theory of the firm: Knowledge versus opportunism. Organization Science, 7(5), 477–501.CrossRefGoogle Scholar
Danneels, E. (2003). Tight–loose coupling with customers: The enactment of customer orientation. Strategic Management Journal, 24(6), 559–576.CrossRefGoogle Scholar
D'aveni, R. A. (2010). Hypercompetition. New York, Simon and Schuster.Google Scholar
D'Aveni, R. A., Dagnino, G. B., & Smith, K. G. (2010). The age of temporary advantage. Strategic Management Journal, 31(13), 1371–1385. https://doi.org/10.1002/smj.897.CrossRefGoogle Scholar
Dawson, J. F. (2014). Moderation in management research: What, why, when, and how. Journal of Business and Psychology, 29(1), 1–19.CrossRefGoogle Scholar
Day, G. S. (2000). Managing market relationships. Journal of the Academy of Marketing Science, 28(1), 24–30.CrossRefGoogle Scholar
Day, G. S., & Wensley, R. (1988). Assessing advantage: A framework for diagnosing competitive superiority. Journal of Marketing, 52(2), 1–20. https://doi.org/10.1177/002224298805200201.CrossRefGoogle Scholar
De Marchi, V., & Grandinetti, R. (2013). Knowledge strategies for environmental innovations: The case of Italian manufacturing firms. Journal of Knowledge Management, 17(4), 569–582.CrossRefGoogle Scholar
Dess, G. G., & Beard, D. W. (1984). Dimensions of organizational task environments. Administrative science quarterly, 29(1), 52–73.CrossRefGoogle Scholar
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23(4), 660–679. https://doi.org/10.5465/amr.1998.1255632.CrossRefGoogle Scholar
Ebbers, J. J. (2014). Networking behavior and contracting relationships among entrepreneurs in business incubators. Entrepreneurship Theory and Practice, 38(5), 1–23.CrossRefGoogle Scholar
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10–11), 1105–1121. https://doi.org/10.1002/1097-0266(200010/11)21:10/11%3C1105::AID-SMJ133%3E3..CO;2-E.3.0.CO;2-E>CrossRefGoogle Scholar
Fainshmidt, S., Pezeshkan, A., Lance Frazier, M., Nair, A., & Markowski, E. (2016). Dynamic capabilities and organizational performance: A meta-analytic evaluation and extension. Journal of Management Studies, 53(8), 1348–1380.CrossRefGoogle Scholar
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104.CrossRefGoogle Scholar
Foss, N. J., & Pedersen, T. (2002). Transferring knowledge in MNCs: The role of sources of subsidiary knowledge and organizational context. Journal of International Management, 8(1), 49–67.CrossRefGoogle Scholar
Garrette, B., Castañer, X., & Dussauge, P. (2009). Horizontal alliances as an alternative to autonomous production: Product expansion mode choice in the worldwide aircraft industry 1945–2000. Strategic Management Journal, 30(8), 885–894. https://doi.org/10.1002/smj.770.CrossRefGoogle Scholar
Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(S2), 109–122.CrossRefGoogle Scholar
Grewal, R., & Tansuhaj, P. (2001). Building organizational capabilities for managing economic crisis: The role of market orientation and strategic flexibility. Journal of Marketing, 65(2), 67–80.CrossRefGoogle Scholar
Grissemann, U., Plank, A., & Brunner-Sperdin, A. (2013). Enhancing business performance of hotels: The role of innovation and customer orientation. International Journal of Hospitality Management, 33, 347–356. https://doi.org/10.1016/j.ijhm.2012.10.005.CrossRefGoogle Scholar
Gupta, A. K., & Govindarajan, V. (2000). Knowledge flows within multinational corporations. Strategic Management Journal, 21(4), 473–496.3.0.CO;2-I>CrossRefGoogle Scholar
Gutierrez-Gutierrez, L. J., Barrales-Molina, V., & Kaynak, H. (2018). The role of human resource-related quality management practices in new product development: A dynamic capability perspective. International Journal of Operations & Production Management, 38(1), 43–66.CrossRefGoogle Scholar
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2014). Multivariate data analysis: Pearson new international edition. Essex: Pearson Education Limited, 1, 2.Google Scholar
Hair, J. F., Black, W. C., Babin, B., Anderson, R. E., & Tatham, R. (2018). Multivariate data analysis. New Jersey, USA: Cengage.Google Scholar
Håkansson, H., & Ford, D. (2002). How should companies interact in business networks? Journal of Business Research, 55(2), 133–139. https://doi.org/10.1016/S0148-2963(00)00148-X.CrossRefGoogle Scholar
Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20(4), 986–1014.CrossRefGoogle Scholar
Houston, F. S. (1986). The marketing concept: What it is and what it is not. Journal of Marketing, 50(2), 81–87.CrossRefGoogle Scholar
Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: Antecedents and consequences. Journal of Marketing, 57(3), 53–70.CrossRefGoogle Scholar
Jordan, P. J., & Troth, A. C. (2020). Common method bias in applied settings: The dilemma of researching in organizations. Australian Journal of Management, 45(1), 3–14.CrossRefGoogle Scholar
Joshi, A. W. (2016). When does customer orientation hinder (help) radical product innovation? The role of organizational rewards. Journal of Product Innovation Management, 33(4), 435–454.CrossRefGoogle Scholar
Kirca, A. H., Jayachandran, S., & Bearden, W. O. (2005). Market orientation: A meta-analytic review and assessment of its antecedents and impact on performance. Journal of Marketing, 69(2), 24–41.CrossRefGoogle Scholar
Klassen, R. D., & Jacobs, J. (2001). Experimental comparison of web, electronic and mail survey technologies in operations management. Journal of Operations Management, 19(6), 713–728.CrossRefGoogle Scholar
Kohtamäki, M., Rabetino, R., & Möller, K. (2018). Alliance capabilities: A systematic review and future research directions. Industrial Marketing Management, 68, 188–201. https://doi.org/10.1016/j.indmarman.2017.10.014.CrossRefGoogle Scholar
KPMG. (2016, April 26). The Indian services sector Poised for global ascendancy. Retrieved from https://assets.kpmg/content/dam/kpmg/pdf/2016/04/The-Indian-services-sector-Poisedfor-global-scendancy.pdf.Google Scholar
Lai, Y.-H. (2013). The moderating effect of organizational structure in knowledge management for international ports in Taiwan. International Journal of Computer and Information Technology, 2(2), 240–246.Google Scholar
Lakshman, C., Kumra, R., & Adhikari, A. (2017). Proactive market orientation and innovation in India: The moderating role of intrafirm causal ambiguity. Journal of Management & Organization, 23(1), 116–135.CrossRefGoogle Scholar
Lee, Y.-M., & Yang, C. (2014). The relationships among network ties, organizational agility, and organizational performance: A study of the flat glass industry in Taiwan. Journal of Management & Organization, 20(2), 206–226.CrossRefGoogle Scholar
Li, D., & Liu, J. (2014). Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China. Journal of Business Research, 67(1), 2793–2799. https://doi.org/10.1016/j.jbusres.2012.08.007.CrossRefGoogle Scholar
Lin, M.-J. J., Tu, Y.-C., Chen, D.-C., & Huang, C.-H. (2013). Customer participation and new product development outcomes: The moderating role of product innovativeness. Journal of Management & Organization, 19(3), 314–337.CrossRefGoogle Scholar
Lin, Y., & Wu, L.-Y. (2014). Exploring the role of dynamic capabilities in firm performance under the resource-based view framework. Journal of Business Research, 67(3), 407–413. https://doi.org/10.1016/j.jbusres.2012.12.019.CrossRefGoogle Scholar
Lubatkin, M. H., Simsek, Z., Ling, Y., & Veiga, J. F. (2006). Ambidexterity and performance in small-to medium-sized firms: The pivotal role of top management team behavioral integration. Journal of Management, 32(5), 646–672. https://doi.org/10.1177%2F0149206306290712.CrossRefGoogle Scholar
Makadok, R. (2001). Toward a synthesis of the resource-based and dynamic-capability views of rent creation. Strategic Management Journal, 22(5), 387–401. https://doi.org/10.1002/smj.158.CrossRefGoogle Scholar
Martin, S. L., Javalgi, R. R. G., & Ciravegna, L. (2020). Marketing capabilities and international new venture performance: The mediation role of marketing communication and the moderation effect of technological turbulence. Journal of Business Research, 107, 25–37.CrossRefGoogle Scholar
Mediano, J. M., & Ruiz-Alba, J. L. (2019). Customer orientation in highly relational services. Marketing Intelligence & Planning, 38(2), 209–223.Google Scholar
Möller, K. E. K., & Törrönen, P. (2003). Business suppliers’ value creation potential: A capability-based analysis. Industrial Marketing Management, 32(2), 109–118. https://doi.org/10.1016/S0019-8501(02)00225-0.CrossRefGoogle Scholar
Ngugi, I. K., Johnsen, R. E., & Erdélyi, P. (2010). Relational capabilities for value co-creation and innovation in SMEs. Journal of Small Business and Enterprise Development, 17(2), 260–278. https://doi.org/10.1108/14626001011041256.CrossRefGoogle Scholar
Osiyevskyy, O., Shirokova, G., & Ritala, P. (2020). Exploration and exploitation in crisis environment: Implications for level and variability of firm performance. Journal of Business Research, 114, 227–239.CrossRefGoogle ScholarPubMed
Pandit, D., Joshi, M. P., Sahay, A., & Gupta, R. K. (2018). Disruptive innovation and dynamic capabilities in emerging economies: Evidence from the Indian automotive sector. Technological Forecasting and Social Change, 129, 323–329.CrossRefGoogle Scholar
Pavlou, P. A., & El Sawy, O. A. (2011). Understanding the elusive black box of dynamic capabilities. Decision Sciences, 42(1), 239–273. https://doi.org/10.1111/j.1540-5915.2010.00287.x.CrossRefGoogle Scholar
Payne, R. L., & Mansfield, R. (1973). Relationships of perceptions of organizational climate to organizational structure, context, and hierarchical position. Administrative Science Quarterly, 18(4), 515–526. doi: 10.2307/2392203CrossRefGoogle Scholar
Pinkse, J., Kuss, M. J., & Hoffmann, V. H. (2010). On the implementation of a ‘global’ environmental strategy: The role of absorptive capacity. International Business Review, 19(2), 160–177.CrossRefGoogle Scholar
Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879. https://doi.org/10.1037/0021-9010.88.5.879.CrossRefGoogle ScholarPubMed
Podsakoff, P. M., MacKenzie, S. B., & Podsakoff, N. P. (2012). Sources of method bias in social science research and recommendations on how to control it. Annual Review of Psychology, 63, 539–569.CrossRefGoogle ScholarPubMed
Porter, M. E., & Millar, V. E. (1985). How information gives you competitive advantage, Massachusetts, Harvard Business Review Reprint Service. https://hbr.org/1985/07/how-information-gives-you-competitive-advantage.Google Scholar
Rodríguez-Díaz, M., & Espino-Rodríguez, T. F. (2006). Developing relational capabilities in hotels. International Journal of Contemporary Hospitality Management, 18(1), 25–40. https://doi.org/10.1108/09596110610641957.CrossRefGoogle Scholar
Singh, R., Charan, P., & Chattopadhyay, M. (2020). Relational capabilities and performance: Examining the moderation-mediation effect of organisation structures and dynamic capability. Knowledge Management Research & Practice, 18, 1–15.CrossRefGoogle Scholar
Slater, S. F., & Narver, J. C. (1998). Customer-led and market-oriented: Let's not confuse the two. Strategic Management Journal, 19(10), 1001–1006. https://doi.org/10.1002/(SICI)1097-0266(199810)19:10%3C1001::AID-SMJ996%3E3.0.CO;2-4.3.0.CO;2-4>CrossRefGoogle Scholar
Stringfellow, A., Nie, W., & Bowen, D. E. (2004). CRM: Profiting from understanding customer needs. Business Horizons, 47(5), 45–52. doi: 10.1016/j.bushor.2004.07.008CrossRefGoogle Scholar
Su, H., & Linderman, K. (2016). An empirical investigation in sustaining high-quality performance. Decision Sciences, 47(5), 787–819. https://doi.org/10.1111/deci.12210.CrossRefGoogle Scholar
Tajeddini, K. (2010). Effect of customer orientation and entrepreneurial orientation on innovativeness: Evidence from the hotel industry in Switzerland. Tourism Management, 31(2), 221–231. https://doi.org/10.1016/j.tourman.2009.02.013.CrossRefGoogle Scholar
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350. https://doi.org/10.1002/smj.640.CrossRefGoogle Scholar
Teece, D. J., & Al-Aali, A. (2012). Knowledge assets, capabilities, and the theory of the firm. Handbook of organizational learning and knowledge management (2nd ed.). United Kingdom, John Wiley and Sons Ltd.Google Scholar
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3..CO;2-Z.3.0.CO;2-Z>CrossRefGoogle Scholar
Theoharakis, V., Sajtos, L., & Hooley, G. (2009). The strategic role of relational capabilities in the business-to-business service profit chain. Industrial Marketing Management, 38(8), 914–924. https://doi.org/10.1016/j.indmarman.2009.04.006.CrossRefGoogle Scholar
Tzokas, N., Kim, Y. A., Akbar, H., & Al-Dajani, H. (2015). Absorptive capacity and performance: The role of customer relationship and technological capabilities in high-tech SMEs. Industrial Marketing Management, 47, 134–142. https://doi.org/10.1016/j.indmarman.2015.02.033.CrossRefGoogle Scholar
Wang, G., Dou, W., Zhu, W., & Zhou, N. (2015). The effects of firm capabilities on external collaboration and performance: The moderating role of market turbulence. Journal of Business Research, 68(9), 1928–1936. https://doi.org/10.1016/j.jbusres.2015.01.002.CrossRefGoogle Scholar
Wang, P., Jiang, X., & Dong, M. C. (2021). Alliance experience and performance outcomes: A meta-analysis. Strategic Organization, 20(2), 412–432.CrossRefGoogle Scholar
Wang, L., Jin, J. L., Zhou, K. Z., Li, C. B., & Yin, E. (2020). Does customer participation hurt new product development performance? Customer role, product newness, and conflict. Journal of Business Research, 109, 246–259.CrossRefGoogle Scholar
Weaven, S., Quach, S., Thaichon, P., Frazer, L., Billot, K., & Grace, D. (2021). Surviving an economic downturn: Dynamic capabilities of SMEs. Journal of Business Research, 128, 109–123.CrossRefGoogle Scholar
West, J., & Mace, M. (2010). Browsing as the killer app: Explaining the rapid success of apple's iPhone. Telecommunications Policy, 34(5–6), 270–286. https://doi.org/10.1016/j.telpol.2009.12.002.CrossRefGoogle Scholar
Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal, 24(10), 991–995. https://doi.org/10.1002/smj.318.CrossRefGoogle Scholar
Workman, J. P. Jr (1993). Marketing's limited role in new product development in one computer systems firm. Journal of Marketing Research, 30(4), 405–421. https://doi.org/10.1177/002224379303000402.CrossRefGoogle Scholar
Wu, J. (2014). Cooperation with competitors and product innovation: Moderating effects of technological capability and alliances with universities. Industrial Marketing Management, 43(2), 199–209. https://doi.org/10.1016/j.indmarman.2013.11.002.CrossRefGoogle Scholar
Xu, H., Guo, H., Zhang, J., & Dang, A. (2018). Facilitating dynamic marketing capabilities development for domestic and foreign firms in an emerging economy. Journal of Business Research, 86, 141–152. https://doi.org/10.1016/j.jbusres.2018.01.038.CrossRefGoogle Scholar
Zheng, N., Wei, Y., Zhang, Y., & Yang, J. (2016). In search of strategic assets through cross-border merger and acquisitions: Evidence from Chinese multinational enterprises in developed economies. International Business Review, 25(1), 177–186. https://doi.org/10.1016/j.ibusrev.2014.11.009.CrossRefGoogle Scholar
Zhou, K. Z., Brown, J. R., Dev, C. S., & Agarwal, S. (2007). The effects of customer and competitor orientations on performance in global markets: A contingency analysis. Journal of International Business Studies, 38(2), 303–319.CrossRefGoogle Scholar
Zhou, K. Z., & Li, C. B. (2010). How strategic orientations influence the building of dynamic capability in emerging economies. Journal of Business Research, 63(3), 224–231. https://doi.org/10.1016/j.jbusres.2009.03.003.CrossRefGoogle Scholar
Zhou, S. S., Zhou, A. J., Feng, J., & Jiang, S. (2019). Dynamic capabilities and organizational performance: The mediating role of innovation. Journal of Management & Organization, 25(5), 731–747.CrossRefGoogle Scholar
Zollo, M., & Winter, S. G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13(3), 339–351. https://doi.org/10.1287/orsc.13.3.339.2780.CrossRefGoogle Scholar
Zou, B., Guo, F., & Guo, J. (2019). Antecedents and outcomes of breadth and depth of absorptive capacity: An empirical study. Journal of Management & Organization, 25(5), 764–782.CrossRefGoogle Scholar