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This paper conceptualised the distinctive capabilities system and tested its relationship between small and medium enterprise (SME) non-financial and financial performance, encompassing leadership and learning orientation as mediators, moderators and moderators’ mediators.

The research design is exploratory, quantitative and cross-sectional. The study employed partial least squares path modelling for testing the direct, mediation and moderation effects, and, for testing moderated mediation, the author adopted PROCESS analysis. Before testing the hypotheses, a confirmatory factor analysis procedure was applied to the measurement model validity test.

Our empirical findings confirm that (1) learning orientation has a positive and significant implication as a moderator between the distinctive capabilities system and SME performance; (2) the distinctive capabilities system has a significant relationship with leadership and learning orientation, and leadership has a significant relationship with learning orientation and (3) the distinctive capabilities system has no direct impact on performance. These findings suggest that, by nature, the distinctive capabilities system has an indirect impact on SME performance, which must be understood as a consequence of living “far-from-equilibrium” and being forced to learn and adapt to come up with better market configurations.

This study intends to contribute to the existing literature in three ways: (1) it proposes the distinctive capabilities system definition; (2) it highlights the system’s features and benefits that make it a core construct for SMEs surviving and thriving and (3) it shows the causal relationship between the leadership capability and learning orientation and the distinctive capabilities system and performance.

The purpose of this research was to develop a comprehensive measure of brand orientation and empirically examine whether a fashion retailer's brand orientation assists in explaining variations in its retail offer advantage over competitors. This study provides a conceptualisation and operationalisation of brand orientation within the context of fashion retailing. Four dimensions of brand orientation are introduced including distinctiveness, functionality, value adding and symbolic. The results suggest that the more brand oriented the fashion retailer, the greater its retail offer advantage over competitors. It concludes with new insights and suggestions for fashion retailers in driving greater differentiation and competitive advantage.

The purpose of this paper is to examine how one firm – the British Shoe Corporation – eventually failed because, as a result of the strength of its predominant managerial mental model it fell into a number of exploitative learning capability traps.

The paper uses a contemporary historical case study approach. This allows for a longitudinal study of the phenomenon. It examines the core concepts involved before moving on to consider the task environment in which the company operated, the origins and nature of its predominant managerial mental model, its performance over its lifetime and how and why it fell into the various capability learning traps.

The study found that the firm's predominant managerial mental model had a significant impact on its capability learning. It argues that to prevent other firms falling into these sorts of traps they should adopt scenario planning and seek out internal asymmetries.

The study is limited in that it only considers one specific case. More studies of the same sort need to be carried out before the findings can be considered generalisable. Again much more research is needed into the process of seeking out internal asymmetries, a recently developed concept with very little written on it.

The paper provides advice on ways to prevent firms falling into the same sorts of learning traps as the British Shoe Corporation.

The paper is original in that it relates the problem of falling into capability learning traps to the predominant managerial mental model of the organisation. It provides a practical example of the phenomenon and discusses practical strategies that other firms can adopt to avoid suffering the same outcome.

Increasingly, product companies are attempting to offer solutions rather than standalone goods. However, recent field data show product companies tend to follow their product-centric doctrine to deal with solutions. In fact, the value of a solution for customers is to get their particular problems solved in the long run.

In this chapter, a new view (a circular process view) of solutions is introduced to help product companies to cocreate sustainable solutions with their customers. Derived from this new view, the required distinctive capabilities for organizing sustainable customer solutions are elaborated. They are (1) understanding the customer’s actual and ongoing needs, (2) organizing responsive systems integration, (3) ensuring continuous customer value creation, and (4) sustaining the solution in the network.

This introduction paper to the special issue on “The twenty‐first century knowledge‐based value drivers of innovation and sustainable development” aims to focus on such relationships between knowledge, learning, capabilities, innovation and competitive advantage in different forms of organization: businesses, clusters and regions. The purpose is to point out the conceptual pillars and contribute to the ongoing debate on: how knowledge assets impact organizational performance, what are the characteristics of such value‐generating processes, what factors affect the process of building organizational capabilities and distinctive competences, and how organizations translate specific capabilities into sustainable competitive advantages.

The article is based on a thorough analysis of the management literature addressing the nature, role and relevance of knowledge, organizational capabilities, learning and knowledge management for organization competitiveness. The conceptual background sets the foundations for a better understanding of the strategic importance of knowledge‐based value drivers for innovation and sustainable organizational value creation.

As knowledge management is establishing itself as a research discipline, it is fundamental to define the conceptual pillars grounding the application of knowledge management initiatives for innovation and business performance improvements. This paper provides a framework summarizing the key assumptions at the basis of understanding the strategic relevance of knowledge‐based value drivers for growth and competitiveness.

In addressing some of the questions posed, this article provides some implications for future research that build on different perspectives and emphasize the importance of adopting multi‐disciplinary approaches to disentangle the complexities of how organizations convert knowledge resources to a long‐lasting competitive advantage.

This editorial presents the key conceptual pillars explicating the role of knowledge resources as building blocks of organizational capabilities and how firms can develop and maintain their competences by promoting and nurturing learning processes. The value of this paper is the definition of a conceptual framework outlining the relationships between knowledge management, organizational capabilities, organizational learning and competitiveness.

The purpose of this paper is to examine why large firms often fail to develop disruptive innovations. This study identifies several key inhibitors or barriers that hinder those developments. A conceptual model is presented that examines the interrelationship and interdependence of these inhibiting factors, in an effort to provide a better understanding of how companies can improve their disruptive innovation capabilities.

This paper focuses on disruptive innovation rather than incremental innovation and is limited to research findings on large corporations. Recently published works (1990‐2004) have examined success factors as the determinants of disruptive innovation capability. A complementary approach is to examine the inhibitors of disruptive innovation and investigate their interrelationship and interdependence. The study is based on an extensive review of literature available, and examines both internal and external inhibiting factors to develop a conceptual model of disruptive innovation capabilities.

Many large corporations fail to develop disruptive innovations. It is argued that the basic constraints to creating successful disruptive innovation stem in large part from several inhibiting factors, and we have identified different clusters of interrelated and partly‐interdependent inhibitors: the inability to unlearn obsolete mental models, a successful dominant design or business concept, a risk‐averse corporate climate, innovation process mismanagement, lack of adequate follow‐through competencies and the inability to develop mandatory internal or external infrastructure. The conceptual disruptive innovation capability model provides a better understanding of the interrelationship among these limiting factors. There is still a vast gap between intention and actual disruptive innovation capability. Developing distinctive capabilities to bridge this gap should be an integral part of a company's strategy for growth.

This paper is based on an extensive review of literature on disruptive innovation barriers. In it is proposed a conceptual interrelationship model of innovation inhibitors as a basis for determining and improving a company's disruptive innovation capability. It is suggested that, in addition to the theory presented in this paper, further empirical research studies be carried out to validate the key inhibitors of our conceptual model, their interrelationship and interdependence, and the impact on disruptive innovation development.

The study is intended to provide practical insight into clusters of inhibiting factors that prevent large organisations from improving their disruptive innovation capability. The conceptual model facilitates the development of distinctive competencies and mindsets to improve these capabilities.

The purpose of this paper is to identify the key capabilities required in supply net management.

Uses the Management Capability Framework to break down supply net management into different modes and identify capabilities required in them.

Reveals that the supply activity of companies increasingly takes place in intentionally developed strategic networks called supply nets. These networks pose distinctive challenges for supply chain management. Identifies four diverse but simultaneously extant modes of management in the supply net context, and discusses the key managerial capabilities in each mode.

Provides a conceptual framework to fulfill the identified need to understand management in the network management context. This paper enables researchers and business practitioners to identify the strategic focus and key capabilities required in managing supply nets.

Despite the growing importance of logistics in corporate strategy and the global economy, the logistics literature reveals little effort to build a unified theory of logistics (i.e. a theory of the role of logistics in the firm). Thus, the purpose of this paper is to move toward a unified theory of logistics within the contexts of the strategic role and capabilities of logistics. Considering the importance of logistics in today's corporate strategy, various theories of the firm are adapted to explain the reasons for logistics activities within the firm. The proposed theory should serve as a conceptual reference point for future theory development and empirical research in logistics.

The study here responds to the view that the crucial problem in strategic management (research) is firm heterogeneity – why firms adopt different strategies and structures, why heterogeneity persists, and why competitors perform differently. The present study applies complexity theory tenets and a “neo-configurational perspective” of Misangyi et al. (2016) in proposing complex antecedent conditions affecting complex outcome conditions. Rather than examining variable directional relationships using null hypotheses statistical tests, the study examines case-based conditions using somewhat precise outcome tests (SPOT). The complex outcome conditions include firms with high financial performances in declining markets and firms with low financial performances in growing markets – the study focuses on seemingly paradoxical outcomes. The study here examines firm strategies and outcomes for separate samples of cross-sectional data of manufacturing firms with headquarters in one of two nations: Finland (n = 820) and Hungary (n = 300). The study includes examining the predictive validities of the models. The study contributes conceptual advances of complex firm orientation configurations and complex firm performance capabilities configurations as mediating conditions between firmographics, firm resources, and the two final complex outcome conditions (high performance in declining markets and low performance in growing markets). The study contributes by showing how fuzzy-logic computing with words (Zadeh, 1966) advances strategic management research toward achieving requisite variety to overcome the theory-analytic mismatch pervasive currently in the discipline (Fiss, 2007, 2011) – thus, this study is a useful step toward solving the crucial problem of how to explain firm heterogeneity.

Supplier codes of conduct (CoC) are the primary mechanism companies use to drive corporate social responsibility (CSR) upstream in their supply chains. Companies have traditionally used CoC to tackle systemic social issues (e.g. forced labor, wages and working conditions). More recently, CoC have included environmental concerns (e.g. waste treatment, toxic chemicals and pollution). The purpose of this paper is to analyze how companies have evolved their CoC across four points in time between 1999 and 2017. By evaluating changes in the scope, depth and possible regime of sanctions included in CoC, the authors consider whether companies use CoC as either a leveling or a differentiating mechanism.

The authors employ a competing-theories approach to examine how companies have employed CoC. Specifically, the authors examine the content of CoC between four data points: 1999, 2005, 2010 and 2017 to determine whether CoC are used to maintain comparative parity (institutional theory) or to achieve a distinctive market presence (awareness–motivation–capability (AMC) framework). The sample includes 36 transnational companies. To enable replication, the authors maintained consistent sampling and coding procedures across the four time periods.

The authors find a significant harmonization and standardization of CoC over time. Alignment occurs at the lower end of acceptable norms – i.e. a lowest-common-denominator approach. Companies have not chosen to take a more aspirational approach that involves raising the bar on social and environmental performance. That is, companies have not attempted to use CoC to differentiate themselves as CSR standard bearers. Provision specificity dropped for the 2010 sample before rebounding in 2017.

The authors juxtapose the findings with a theoretical framework based on the tenets of institutional theory and the AMC framework. The authors conclude that changes in CoC are largely driven by coercive, normative and mimetic isomorphism as opposed to attempts to leverage CoC to create a distinctive image that could be used for competitive advantage. This finding provides context for how the public, investors and managers should view these documents.