Dynamic managerial capabilities and competitive advantage : an empirical analysis of managers from the finance and insurance and real estate sectors

Abstract

This thesis empirically investigated dynamic managerial capabilities (DMCs), which are the capacities that managers use to create, extend, and modify resources. The research objectives involved identifying, classifying, and assessing DMCs in generating competitive advantage using resource-based theory (RBT). The overall research aim was to build theory in a critical yet underdeveloped area of the literature. A multi-case study using a phenomenological approach was conducted with managers from five small-to-medium sized enterprises from the finance and insurance and real estate sectors. The managers were interviewed, and described episodes when they reconfigured resources during periods of rapid change (such as the recent financial crisis and recession) in order to compete. A survey questionnaire was also used in which respondents ranked DMCs, and discussed the joint uses of them, including which capabilities were used in developing and operating others. The results of the research showed that managers used specific transformational DMCs in periods of rapid change in order to generate advantage. The DMCs are learning-based (LBDMC) and innovation-based capabilities (IBDMC) and involve participative leadership (PL). They are mutually interdependent and reinforcing, impact on ordinary capabilities, and are evolutionarily fit. They exhibited commonalities, yet are considered idiosyncratic in detail. The results are relevant to the field of strategic management in terms of theory development and practical applicability. The academic contribution exploits a gap in the extant literature, and the research shows how DMCs can be developed, used, and maintained in practice.