Strategic Reconfigurations

Strategic Reconfigurations

Building Dynamic Capabilities in Rapid Innovation-based Industries

Edited by Stuart Wall, Carsten Zimmermann, Ronald Klingebiel and Dieter Lange

This path-breaking book provides unique insights into the organisational realities of strategic reconfigurations in uncertain markets, thus advancing the dynamic capability perspective.

Chapter 3: Shaping the Context for Learning: Corporate Alignment Initiatives, Environmental Munificence and Firm Performance

Sebastian Raisch and Florian Hotz

Subjects: business and management, organisational innovation, strategic management, economics and finance, industrial organisation, innovation and technology, organisational innovation


Sebastian Raisch and Florian Hotz1 ABSTRACT In this chapter, we build on organizational theory and dynamic capabilities to explore the link of corporate initiations to environmental conditions and firm performance. We especially consider concrete and manageable corporate alignment initiatives rather than learning behaviour per se. By integrating the environment market context into the analysis we are able to engage in a quantitative and longitudinal field study to extract existing empirical studies. Our findings reveal a fundamental dilemma that give firms a Hobson’s choice between suboptimal alignment behaviors that could be called ‘flat slopes’ and ‘steep slopes’. We conclude with a discussion of the results and proportions for future research. INTRODUCTION Organizational learning, defined as an organization’s capability to create, disseminate, and act upon generated knowledge, has been regarded as a necessary dynamic capability for firms seeking to sustain a competitive advantage (Barney 1991; Teece, Pisano, and Shuen 1997). March (1991) suggested that ‘exploration’ and ‘exploitation’ are two fundamentally different learning activities between which organizations divide their attention and resources. Whereas exploitation refers to ‘learning gained via local search, experiential refinement, selection and reuse of existing routines’, exploration refers to ‘learning gained through processes of converted variation, planned experimentation and play’ (Baum, Li, and Usher 2000, 768). While organizations’ direct influence on these learning processes is limited, managers 62 Shaping the context for learning 63 may align the organizational context to enable exploration and exploitation (Goold, Campbell, and Alexander 1994; Lechner 2006). Both learning types, however, were found to require fundamentally...

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