A Cognitive Theory of the Firm
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A Cognitive Theory of the Firm

Learning, Governance and Dynamic Capabilities

Bart Nooteboom

In this important and timely book, Bart Nooteboom develops and applies a social cognitive theory of firms and organizations with a focus on learning and innovation.
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Chapter 5: Dynamic Capabilities

Bart Nooteboom


INTRODUCTION The present chapter is dedicated to a further analysis of dynamic capabilities (Teece et al., 2000), that is capabilities to develop or change capabilities. These entail learning, that is the change of knowledge and change of competencies more generally, including organizational capabilities. Learning can entail the adoption of knowledge from others and development of new knowledge. Development of new knowledge can arise from intellectual inference, from interaction with others and from own experience, and usually arises from a combination and interplay between the three. Ideas arise from thought, experience and debate, and they yield experiments, alone or in collaboration with others, which yield new ideas. Collaboration and debate are important especially from the constructivist, interactionist perspective of knowledge used in this book and set out in Chapter 2. Here, differences in cognition, in cognitive distance, form a source of variety as a basis for innovation. In preceding chapters several dynamic capabilities have already been discussed. In Chapter 3 there was an analysis of the capability to employ organizational cognitive focus that enables a combination of exploitation and exploration within and between organizations. A second capability is the ability to find or develop outside partners at sufficient cognitive distance, and the intellectual and behavioural capability to collaborate across such distance, taking into account issues of both competence and governance. In Chapter 4 the capability was added to design networks of optimal density, if such design lies within the power of an organization, or to select such a network, and to...

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