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Sustainable Growth Through Strategic Innovation

Driving Congruence in Capabilities

Mitsuru Kodama

From detailed reviews of existing dynamic capabilities, this book presents a theoretical model of a strategic innovation system as a corporate system capability to enable a large company to achieve strategic innovation. The book includes in-depth case studies to illustrate the importance of strategic innovation capabilities.
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Chapter 2: Dynamic capabilities, ordinary capabilities and strategic innovation capabilities: a dynamic view of capabilities theory

Driving Congruence in Capabilities

Mitsuru Kodama

Extract

This chapter clarifies the differences between the two types of capabilities indispensable to companies, “dynamic capabilities” and “ordinary capabilities,” by focusing on the dynamically changing characteristics of the boundaries of informal organizations. The chapter also clarifies the dynamic innovation process that companies need to achieve strategic innovation (incremental innovation and radical innovation) to grow sustainably. In addition, the chapter extracts the factors of capabilities (strategic innovation capabilities) required for sustainable growth through the continued execution of corporate incremental and radical innovation. The chapter presents the important “strategic innovation capabilities” of leading companies that entail the dynamic spiral of the two distinct types of capabilities on the time axis – the dynamic and ordinary capabilities on the Capabilities Map – which are skillfully used appropriately or combined to achieve fast or slow incremental innovation for exploitation and radical innovation for exploration.

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