Grant, 1996 Toward a knowledge-based theory of the firm

Given assumptions about the characteristics of knowledge and the knowledge requirements
of production, the firm is conceptualized as an institution for integrating knowledge.
The primary contribution of the paper in exploring the coordination mechanisms through
which firms integrate the specialist knowledge of their members. In contrast to earlier
literature, knowledge is viewed as residing within the individual, and the primary role
of the organization is for the basis of organizational capability, the principles of
organization design (in particular, the analysis of hierarchy and the distribution of
decision-making authority), and the determinants of the horizontal and vertical
boundaries of the firm. More generally, the knowledge-based approach sheds new light upon
current organizational innovations and trends and has far-reaching implications for
management practice.

SESSION 11: Dynamic Views of Strategy II

Jacobson, 1992
The Austrian school of strategy

Although traditional industrial organization continues to serve as one of the conceptual
foundations for strategic thinking and research, many of its premises have come under
widespread criticism. Industrial organization largely ignores, despite their importance,
change, uncertainty, and disequilibrium in the business environment. Because these
fundamental characteristics are cornerstones of the Austrian School of Economics, this
doctrine offers unique strategic perspectives. The Austrian emphasis on the market
process and entrepreneurial discovery establishes a framework for both strategy
formulation and research.

Eisenhardt & Martin, 2000
Dynamic capabilities: what are they?

This paper focuses on dynamic capabilities and, more generally, the resource-based view
of the firm. We argue that dynamic capabilities are a set of specific and identifiable
processes such as product development, strategic decision making, and alliancing. They
are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in
their details and path dependent in their emergence, they have significant commonalities
across firms (popularly termed best practice). This suggests that they are more
homogeneous, fungible, equifinal, and substitutable than is usually assumed. In
moderately dynamic markets, dynamic capabilities resemble the traditional conception of
routines. They are detailed, analytic, stable processes with predictable outcomes. In
contrast, in high-velocity markets, they are simple, highly experiential and fragile
processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the
evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary
emphasis is on variation. In high-velocity markets, it is on selection. At the level of
RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive
advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches
a boundary condition in high-velocity markets.

Zollo & Winter, 2002
Deliberate learning and the evolution of dynamic capabilities

This paper investigates the mechanisms through which organizations develop dynamic
capabilities, defined as routinized activities directed to the development and adaptation
of operating routines. It addresses the role of (1) experience accumulation, (2)
knowledge articulation, and (3) knowledge codification processes in the evolution of
dynamic, as well as operational, routines. The argument is made that dynamic capabilities
are shaped by the coevolution of these learning mechanisms. At any point in time, firms
adopt a mix of learning behaviors constituted by a semiautomatic accumulation of
experience and by deliberate investments in knowledge articulation and codification
activities. The relative effectiveness of these capability-building mechanisms is
analyzed here as contingent upon selected features of the task to be learned, such as its
frequency, homogeneity, and degree of causal ambiguity. Testable hypotheses about these
effects are derived. Somewhat counterintuitive implications of the analysis include the
relatively superior effectiveness of highly deliberate learning processes such as
knowledge codification at lower levels of frequency and homogeneity of the organizational
task, in contrast with common managerial practice
Teece, 2007
Explicating dynamic capabilities: the nature and microfoundation of (sustainable)
enterprise performance

This paper draws on the social and behavioral sciences in an endeavor to specify the
nature and microfoundations of the capabilities necessary to sustain superior enterprise
performance in an open economy with rapid innovation and globally dispersed sources of
invention, innova- tion, and manufacturing capability. Dynamic capabilities enable
business enterprises to create, deploy, and protect the intangible assets that support
superior long- run business performance. The microfoundations of dynamic capabilitiesthe
distinct skills, processes, procedures, orga- nizational structures, decision rules, and
disciplineswhich undergird enterprise-level sensing, seizing, and reconfiguring
capacities are difficult to develop and deploy. Enterprises with strong dynamic
capabilities are intensely entrepreneurial. They not only adapt to business ecosystems,
but also shape them through innovation and through collaboration with other enterprises,
enti- ties, and institutions. The framework advanced can help scholars understand the
foundations of long-run enterprise success while helping managers delineate relevant
strategic considerations and the priorities they must adopt to enhance enterprise
performance and escape the zero profit tendency associated with operating in markets open
to global competition.