Dynamic Capabilities: Implications for Firm Boundaries and Organizational Design

Dynamic capabilities: Implications for firm boundaries and organizational design (2015) Teece, D., & Leih, S. (Eds.), Oxford Handbook of Dynamic Capabilities, Oxford University Press

Posted: 19 Jun 2019

See all articles by Mari Sako

Mari Sako

University of Oxford - Said Business School

George Chondrakis

ESADE Business School

Date Written: May 1, 2015

Abstract

Among various theories of the firm, the dynamic capabilities approach has not fully drawn its implications for firm boundary and organizational design. Firm boundary and structural design are abstracted away when strategy scholars study capabilities and firm-level heterogeneity. This chapter corrects for this deficiency by developing a coevolutionary model, with variations in combinations of entrepreneurial management and organizational routines as primitives of coevolution. Firms choose their boundary and structure as they select and replicate different combinations of knowledge domains and organizational routines to develop ordinary capabilities. Distinct from ordinary capabilities, dynamic capabilities embodied in top management teams enable firms to break or redefine their evolutionary paths, creating heterogeneous firm choices in boundary and structure. The model demonstrates the importance of looking at dynamic capabilities, alongside transactional and contractual characteristics, to provide a robust theory of the firm.

Keywords: dynamic capabilities, ordinary capabilities, firm boundaries, organizational design, theories of the firm, knowledge domains, organizational routines

Suggested Citation

Sako, Mari and Chondrakis, George, Dynamic Capabilities: Implications for Firm Boundaries and Organizational Design (May 1, 2015). Dynamic capabilities: Implications for firm boundaries and organizational design (2015) Teece, D., & Leih, S. (Eds.), Oxford Handbook of Dynamic Capabilities, Oxford University Press, Available at SSRN: https://ssrn.com/abstract=3402597

Mari Sako (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

George Chondrakis

ESADE Business School ( email )

Av. de Pedralbes, 60-62
Barcelona, 08034
Spain

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