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All too often discussion of Capability proceeds as if it is clear what ‘Capability’ is: and that all that is required is the ascertaining of means for developing it. This paper seeks to explore the meanings of Capability. It provides two broad meanings, and discusses the paradoxes inherent in the application of these to the real world of management and business. On the one hand, Capability is defined as Potential, what the individual could achieve. Potential is an endowment, which is realised by the acquisition of skills and knowledge, i.e. the acquisition of Content. On the other hand, Capability is defined as Content: what the individual can (or has learned to) do. This Content has been acquired by, or input into, the individual, who then has the Potential to develop further. So there are different routes to Capability, depending on the definition of Capability one chooses. All of this impinges on the development of Capability. This leads us on to a consideration of whether the ‘Development of Capability’ is a meaningful concept.

To draw management and scholarly attention to two missing capabilities in a knowledge management program: segmentation capability and destruction capability.

An opinion paper based on consulting and research experiences of the authors.

Organizations that consider the two missing capabilities have witnessed significantly improved knowledge management programs compared with when the capabilities were missing from their agenda. In addition to the two missing capabilities, the third capability – protection capability – may need due attention.

The two missing capabilities can be further investigated as important constructs. The two capabilities complement and augment their peer capabilities (creation, transfer, storing, retrieving and applying). The intricacies of the missing capabilities and the known capabilities need to be further studied.

If an organization neglects the two capabilities, the benefits of their knowledge management program will be limited. Organizations can cultivate the two missing capabilities effectively and efficiently by following the suggestions of the paper.

This is the first paper that discusses the two missing knowledge management capabilities exclusively and connects their role and importance to known capabilities.

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.

Knowledge organisations perform knowledge processes, using their primary resources of intellectual capital, and their key input of information. Their effectiveness in performing these processes depends on their knowledge capabilities. In most cases these capabilities must be highly dynamic in order to respond to the changing environment of the organisation and resulting evolution of the required core knowledge processes of the organisation. All organisational development must be centred around developing those dynamic knowledge capabilities on an ongoing basis. The strategic capabilities of an organisation depend on its ability to process rapidly changing information and perspectives on the organisation and its business environment, so these are in fact high‐order knowledge capabilities. The development of organisational knowledge capabilities can be addressed most completely by considering the four fields of individual technology, organisational technology, individual skills and behaviours, and organisational skills and behaviours.

The paper aims to examine the relationship between creating capabilities and political liberalism. It argues that the reality of climate change calls for the capabilities approach to be more rooted in a relational anthropology which the Aristotelian ethical tradition is more akin to.

It discusses how traces of this ethical tradition can be found in Nussbaum's capabilities approach itself: affiliation as an architectonic capability leads to the common good being the end of political action, and practical reason as an architectonic capability leads to reasoning being structured by concerns for the common good.

The paper suggests some practical implications of an Aristotelian version of the capabilities approach.

The paper seeks to build an account of social justice based on the capabilities approach with Aristotelian roots.

Intense competition and short product life cycles in fashion retailing present a number of marketing challenges for retail firms in both the USA and abroad. In order to survive in this industry, it is vital for participants to develop and leverage core marketing capabilities. The current study examines the effectiveness of different marketing capability factors in a cross‐section of the US specialty apparel and footwear retailing sector (n = 60 retail firms). Data were collected from marketing executives in a national mail survey. Specifically, marketing capabilities in image differentiation, promotions, external‐market knowledge and customer service are examined for their impact on firm level performance. A two‐stage structural equation model is used to test the study’s hypotheses. Results suggest that the most effective marketing capabilities, in terms of performance, are image differentiation and promotional capability.

The purpose of this paper is to examine the relationship between a number of variables pertaining to core capability, competitive strategy and performance of construction small to medium size enterprises (SMEs) in China.

The paper consists of a quantitative survey. It involves mainly the development of instrument and testing of the hypotheses.

Core capability and competitive strategy are found to influence construction SMEs' performance. Moreover, there are positive relationships between core capability and competitive strategy. This suggests a need to align core capability and competitive strategy as a precondition for superior performance.

The paper has limitations as a result of data collection. A somewhat larger sample would obviously permit firmer conclusions to be drawn from the results of the statistical analysis.

This paper will contribute to the literature on SMEs, strategic management and resource‐based theory. This integration of scope is particularly new to the context of the Chinese construction industry. Similarly, this research will have implications for practice. The research findings help SMEs' managers to understand the impact of the unique resources of their enterprises and competitive strategy.

This paper aims to present a model of how incentives enhance competitive advantage by improving the sourcing, development and leveraging of firm capabilities.

The author first reviews the key findings of prominent academic and managerial papers on capability building and incentives. The author then proposes a model that advances our understanding of how incentives affect competitive advantage through capability building. The author applies this model to the empirical setting of private equity, where buyouts – by adopting the “carrot and stick” approach – improve the alignment of managerial and firm interests and, in turn, encourage capability building.

The model shows how incentives act on capabilities in three areas: the leveraging of existing capabilities, the sourcing of capabilities internally and the sourcing of capabilities externally.

The model is useful for focusing executives on how incentives impact the development of firm capabilities, which are at the core of competitive advantage.

This paper expands on existing literature by providing a model linking incentives to the competitive advantage of the firm. The model will encourage new ways of thinking about incentive programs, casting them as a method for developing firm capabilities and thereby sustaining firms’ competitive advantage.