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Regardless of its relevance for economic development, the influence of strategic orientation by innovation orientation, and strategic marketing by marketing capability on firm performance, this interesting study focused on firms with strategic industries (defense and security) in Indonesia. It approached the gap in three ways. Initially, the examination was conducted on the role of innovation orientation, marketing capability, the interaction of innovation orientation and marketing capability on firm performance. The next step was considering the contribution of state-owned enterprise (SOE) and non-SOE. Finally, this relationship was studied in strategic industries of firms in Indonesia. The firm performance in this study, which we chose, was operational performance. The proposed conceptual model would be tested by distributing questionnaires to 41 firms in Indonesia. This study gave insight into the matters, which should be the companies’ focus, to improve their operations’ performance. By using PLS-based structural equation modeling (SEM) analysis, the results of the relationship between innovation orientation, marketing capability, and the interaction between innovation orientation and marketing capability on operational performance were identified. The findings could be clarified via the variations in the characteristics of enterprises (SOE and non-SOE). Moreover, there were clear variations in the findings, which were recognized among the firms’ relatively different characteristics. The main finding was a challenge to generalize the relationship from strategic orientation and strategic marketing to performance. The results of firm characteristics also had considerable managerial relevance. The authors recommend strategic industries (defense and security) in Indonesia in achieving operational performance excellence. Management’s importance is paying attention to the relationship between innovation orientation, marketing capability, and dynamic capability in running a company organization.

The vulnerability of capabilities – their susceptibility to depreciation of their strategic value – results from an unbalance between exploitation and exploration within a capability as well as between different levels of capabilities. This vulnerability is examined under the lens of bounded awareness in which the issues of timing, success, and beliefs affect the bias in the deployment of capabilities. Different levels of capabilities are prone to become vulnerable because of internal and external forces. Interfirm knowledge transfer is suggested as a way to reduce the vulnerability of capabilities.

This paper explains how a variety of business units within a listed corporation have tried to define their strategic capabilities, as part of a process of developing independent business strategies within the corporation's corporate strategy. This paper describes the processes by which strategic capabilities were identified in each unit, the differences and similarities between the capabilities identified at the business unit level, and their consistency (or otherwise) with an overall corporate strategic positioning.

This paper is based on the author's consulting experience with both the parent corporation and its individual business units over a period of 15 years, and most recently on an intensive relationship with one division of the corporation and its 13 business units began three years ago. An objective of these relationships has been clarifying each business unit's strategy and any basis for sustainable competitive advantage of its strategic capabilities. What emerged from this process is a set of definitions of business unit strategic capabilities which are both similar to, but in some cases different from, the corporate parent's perceptions of the strategic capabilities of its business units.

This paper describes the process by which a first representation of “strategic capabilities” emerged in each business unit. For each unit, the agreed descriptions of strategic capabilities helped guide strategic decision making and implementation and assisted each unit in clarifying its strategic positioning in its markets. However, considerable differences remain in the articulation of each unit's capabilities and in what capabilities are considered to exist in the business units.

This paper is designed to give practitioners and academics a case study through which to consider practicalities involved in articulating and operationalizing strategic capabilities in general and in defining corporate strategies in particular.

This chapter conceptually addresses outward internationalisation of small and medium sized enterprises (SMEs) from the emerging markets (EMs) by focussing on the role of prior contract manufacturing relationships with a developed market multinational enterprise (DMNE). The internationalisation of SMEs originating from EMs is a rather under-researched area and the role of prior contract manufacturing experience specifically has not been addressed in prior studies. Based on a literature review, the authors identified four capabilities developed by EM SMEs during their contract manufacturing relationships with DMNE(s) that potentially help in later outward internationalisation. The authors incorporate some insights from dynamic capabilities theory, and develop propositions addressing the role of relational capital, human capital, manufacturing productivity capabilities and product innovation capabilities in this specific context. Despite being conceptual in nature, this chapter is one of the first to explicitly highlight the role of these specific capabilities developed during contract manufacturing relationship for outward internationalisation, setting bases for future studies to further empirically investigate them in different contexts.

This paper has a threefold purpose. First, we offer a literature review on alliance capability based on strategic and competence-based management literature. Second, we extend existing literature on alliance capability by breaking this concept down into five subcapabilities, each of which is linked to a stage of the alliance life cycle. Finally, we suggest how firms can support these capabilities through structural, technological, and people-related tools and techniques. We argue that current literature has focused mainly on organization-wide characteristics, the general alliance function, and alliance experience to explain the level of alliance capability. Although we acknowledge the importance of these elements, we stress that more attention needs to be given to the various stage-specific components, actions, and supportive mechanisms that can result in an improved alliance capability.

This study proposes targeted modernization of the Department of Defense (DoD's) Joint Forces Ammunition Logistics information system by implementing the optimized innovative information technology open architecture design and integrating Radio Frequency Identification Device data technologies and real-time optimization and control mechanisms as the critical technology components of the solution. The innovative information technology, which pursues the focused logistics, will be deployed in 36 months at the estimated cost of $568 million in constant dollars. We estimate that the Systems, Applications, Products (SAP)-based enterprise integration solution that the Army currently pursues will cost another $1.5 billion through the year 2014; however, it is unlikely to deliver the intended technical capabilities.

This study investigates the role of functional area-specific managerial schemas on the attempt of strategic renewal at a large medical devices developer and manufacturer during a period of high environmental dynamism. Using data from a 16-month field study on managerial work related to the strategy process, I examine how functional area managers attempted to (re)configure organizational capabilities in response to various environmental challenges. While I did not find any disagreement between functional area managers related to what those challenges were, I did find fundamental disagreements related to what capabilities the organization can muster as a response. More specifically, disagreements surfaced in relation to how these capabilities should be assembled, and ultimately acted as triggers for the contestation of existing shared frames between functional area managers. These findings add to a growing body of evidence suggesting that there exist large differences between how managers within an organization interpret what the organization is capable of, and more specifically link these differences to the organization’s ability to adapt to environmental changes by showing how they impact the assembly of new capabilities deemed necessary for a successful response.

The human development and capability approach (HDCA) and its associated participatory method is receiving growing attention as a useful conceptual development for comparative international education. HDCA challenges the economism so prevalent in world development thinking and, instead, looks at development as a process of enhancing persons’ incrementally achieved substantive freedoms from deprivations. The centrality of the person replaces the centrality of income growth.

The application of HDCA to the study of the role of education that promotes social justice change is illustrated by using an empowerment-capability framework to the long-term study of the benefits of village schooling for rural girls in western China.

Using HDCA to identify influences on social change, we derive a much more nuanced and valuable multi-dimensional view of human development, which enables us to draw broad implications for more effective policy. National policies should use a multi-dimensional informational base including equality, sustainability, and non-market dimensions of well-being as well as market production.

Purpose: Case studies are detailed empirical investigations into a complex entity that emphasize the uniqueness of the case and are valuable for making a theoretical contribution. We aim to reveal the types of theoretical contributions case study research can make to the field of strategy and management and explore how case study design can create the opportunities for making a theoretical contribution.

Methodology/Approach: The dynamic capability approach focuses on the firm-specific processes through which firms integrate, build, or reconfigure resources. A comprehensive review of case studies in this field is conducted in five search engines, resulting in a data set of 13 in-depth case studies.

Findings: We demonstrate that using case studies to extend and refine theory enhances knowledge in the field of dynamic capabilities. In strategy and management research, case studies identify and refine constructs and their relationships, develop and confirm propositions, and embed constructs within a larger set of relationships. We reveal that sampling strategy, research setting, and multiple lenses are aspects of case study design that create opportunities for making a theoretical contribution.

Practical Implications: We suggest that case study researchers strategically and purposefully sample cases, vary the setting conditions, or draw upon numerous research fields to make a theoretical contribution.

Originality/Value of Paper: Going beyond the current discussion, we show that case studies have the potential to extend and refine theory. We shed new light on how dynamic capabilities can benefit from case study research by discovering the antecedents that shape the development of capabilities and determining the boundary conditions of the dynamic capabilities approach.

Part I of this chapter applies the principles of the philosophy of science and the derived scientific method to analyze the foundational concepts and core proposition of the Resource-Base View (RBV) as popularized by Barney (1986, 1991, 1997). This analysis identifies seven fundamental conceptual deficiencies and logic problems in Barney's conceptualization of “strategically valuable resources” and in Barney's VRIO framework for identifying strategically valuable resources that can be sources of sustained competitive advantage. Three problems – the Value Conundrum, the Tautology Problem in the Identification of Resources, and the Absence of a Chain of Causality – relate to the RBV's and VRIO's failure to provide an adequate conceptual basis for identifying strategically valuable resources. The Uniqueness Dilemma, the Cognitive Impossibility Dilemma, and an Asymmetry in Assumptions about Resource Factor Markets result in an inability of the VRIO framework to support identification of resources that can be sources of sustained competitive advantage. More fundamentally, the core proposition of the RBV – that resources that are strategically valuable, rare, inimitable, and organizationally embedded are sources of sustainable competitive advantage – is argued to result directly in the Epistemological Impossibility Problem that precludes use of the scientific method in RBV research. This chapter argues that until these conceptual deficiencies and logic problems are recognized and remedied, the RBV – in spite of its current popularity – is and will remain theoretically sterile and incapable of contributing in any systematic way to the development of strategy theory.

Part II of this chapter then suggests how foundational concepts developed within the competence perspective on strategy provide essential remedies for the identified deficiencies and problems in the RBV – and thereby provide a more conceptually adequate basis for representing the nature of firms in the scientific study of their interactions and competitive outcomes.