Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/49106

Title

Managing innovation and learning in dynamic environments

Author(s)

Grimpe, Christoph;  Sofka, Wolfgang;  Saee, John

Abstract

A broad stream of management literature has focused on resource-based firm strategies for achieving competitive advantage (Barney, 1991; Conner, 1991; Peteraf, 1993; Wernerfelt, 1984). However, relatively little is known on when and how these strategic resources can and should be activated. Gaining a head-start over competitors requires timely responsiveness, reaction to market intelligence as well as rapid and flexible product innovation (Kohli and Jaworski, 1990; Brockhoff, 1997). At the same time, competitive pressures from globalisation have forced firms to make every effort to streamline and rationalise their workflow (Franko, 1989). This has often led to outsourcing and offshoring strategies, that is, the shift of labour-intensive manufacturing to countries with significantly lower labour costs in order to decrease product prices (Teece et at., 1997). Some - and not by coincidence the most successful - companies in their sector, however, have created their own approach to coping with this situation. Spanish fashion retailer ZARA, for example, has been the prototype for a new kind of competitive strategy. It competes within the market in a dynamic manner through its rapid launch of new products. We call this a rapid response capability, which is also referred to in the literature as dynamic capabilities (Eisenhardt and Martin, 2000; Hoopes et at., 2003). More precisely, we explore its roots and antecedents to discover how firms may create and take advantage of employing such capability. This is particularly interesting as the development of rapid response capabilities is an important way to overcome competition based on price/cost advantages through speed and flexibility (Berger, 2006). Building on Nelson and Winter's (1982) view of organisations as a nexus of operational and administrative routines, we define rapid response capabilities specifically as a result of learning mechanisms directed at matching internal strategic resources with the external strategic context (Zollo and Winter, 2002). The goal of this analysis is twofold. First of all, we aim to develop a theoretical framework dealing with this particular type of capability whilst testing it empirically. As Helfat and Peteraf (2003: 997) argued, 'it is difficult to fully explain how firms use resources and capabilities to create a competitive advantage', we provide some initial indications for management on the understanding of rapid response capability development. Our study is designed to, first of all, provide a conceptual framework with accompanying hypotheses. It also presents our empirical study that validates our hypotheses. In addition, the results of this quantitative analysis are also provided here. Based on these results, we discuss our findings on rapid response capabilities and, finally, we offer our concluding remarks.

Publication type

Book chapter

Research centre

Swinburne University of Technology. Faculty of Business and Enterprise. Australian Graduate School of Entrepreneurship

Source

Contemporary corporate strategy: global perspectives, Chapter 20, pp. 328-342

Publication year

2007

Keyword(s)

Corporations;  Dynamic capabilities;  Globalisation;  International business enterprises;  Management;  Rapid response capability;  Strategic planning;  Strategic resources;  Strategies

Publisher

Routledge

ISBN

9780415385954, 0415385954

Publisher URL

http://www.routledge.com/0415385954

Publisher URL

http://books.google.com/books?id=OXNwE9txe24C

Copyright

Copyright © 2007 Christoph Grimpe, Wolfgang Sofka and John Saee.

Peer reviewed