New Horizons in International Business series
Chapter 9: Organisational Learning and Dynamic Capabilities
In this chapter I develop a theoretical framework that explains the linkages between organisational learning and dynamic capabilities and how they aﬀect organisational transformation. It takes the framework developed in Chapter 8 a step further by introducing the intermediary concept of dynamic capabilities between organisational learning and organisational capability outcomes. It broadly corresponds to Stages II and III of the integrative framework presented in Chapter 3. Organisational learning (Shrivastava, 1983; Fiol and Lyles, 1985) and the development of dynamic capabilities (Teece et al., 1997; Eisenhardt and Martin, 2000; Helfat et al., 2006) have become of pivotal interest to organisation scholars as well as management practice. However, the dynamics of these processes as well as their impact on organisational performance remain poorly understood. This is a particular concern for organisations facing radical change in their external environment, which thus have to accelerate their learning and the reconﬁguration of their resources (Newman, 2000; Fey and Denison, 2003). Moreover, organisational learning may be subject to contextual inﬂuences that have rarely been analysed in previous research (Tsui et al., 2004; March, 2005; Meyer, 2007). In this chapter, on the basis of the empirical research, I explain how exploitation learning is linked to the deployment function of dynamic capabilities, involving the reconﬁguration, divestment, creation and integration of resources to provide the operational capabilities required to survive in the market economy in the short term. On the other hand, exploration learning relates to the search and selection function of dynamic capabilities, involving...
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