- Title
- The impact of a firm's dominant logic on dynamic capability deployment
- Creator
- Gao, Yuan
- Relation
- University of Newcastle Research Higher Degree Thesis
- Resource Type
- thesis
- Date
- 2020
- Description
- Research Doctorate - Doctor of Philosophy (PhD)
- Description
- During the past decade, researchers have begun to devote greater attention to understanding managers’ cognition in the context of dynamic capability deployment, as cognition shapes the development and deployment of capabilities. However, while cognition has been examined in the literature concerning dynamic capabilities, the mechanism underlying how cognition guides firms’ dynamic capability deployment has not yet been fully unpacked. This thesis draws on the emerging literature on firm-level (micro) competitive behavior and macro forces in dynamic capability deployment to investigate the impact of firms’ exploration- and exploitation-oriented dominant logics on the deployment of dynamic capabilities. More specifically, it explores how a firm’s dominant logic may help explain differences in the effectiveness and efficiency of the firm’s dynamic capability deployment, taking into account external environmental forces. In doing so, the thesis incorporates three studies that address the proposed research question. Study 1 (Chapter 2) unpacks the mechanism by which exploration- and exploitation- oriented dominant logics guide firms in their dynamic capability deployment. This study employs PLS-SEM and draws on survey data from 548 firms in China. The findings suggest that both exploration- and exploitation-oriented dominant logics have a significant positive effect on the effectiveness and efficiency of dynamic capability deployment and that this impact is non-linear. The findings also demonstrate the significant and positive effect of the effectiveness and efficiency of dynamic capability deployment on ordinary capabilities, which in turn are associated with greater firm performance. Study 2 (Chapter 3) investigates how a firm’s dominant logic directs it in dealing with environmental changes conditional on the institutional context in which the firm was established. Market-oriented institutional change in this study is divided into two stages: the booming market transition stage and the deepening market transition stage. I argue that in these two distinct stages, firms generate two different types of market orientation (i.e., semi market orientation and full market orientation) through a process of imprinting. Due to the imprinting that occurred at the time of the firm’s establishment, the two types of market orientation persist and interact with other firm characteristics in the present. In particular, the firm’s market orientation interacts with its dominant logic by channeling the firm’s attention in a congruent or inconsistent fashion. Multi-group analysis is used to compare two groups of firms from a sample of 450 firms in China: those established in the period 1992–2001, and those established in the period 2002–2017. By employing PLS-SEM and drawing on data from these two groups, the results indicate that the relationships between exploitation-oriented dominant logic and the effectiveness and efficiency of dynamic capability deployment are significantly different between firms established in the two different transition stages. Conversely, the relationships between exploration-oriented dominant logic and the effectiveness and efficiency of dynamic capability deployment are consistent across all firms that were established in either of the two transition stages. Study 3 (Chapter 4) identifies two sets of activity cycles governing the creation and erosion of a firm’s competitive advantage: micro and macro cycles. The micro cycle, in the form of a firm’s dominant logic (firm-level managerial schema), which guides dynamic capability deployment and, in turn, firm performance, is an internal system within a firm. The macro cycle, as an external system, imposes industry demands on a firm. In this study, I argue that the fit between the internal and external systems will encourage a firm’s adaptation, whereas a misfit between the two will undermine its adaptation efforts. In examining the impact of low versus high dynamism industries on the relationships between exploration- and exploitation-oriented dominant logics and dynamic capability deployment, I find that in highly dynamic industries firms that leverage exploration-oriented dominant logic, which promotes innovation and continuous change, are likely to achieve a better performance in dynamic capability deployment, whereas firms in low dynamic industries leveraging exploitation-oriented dominant logic to promote strategic stability are more likely to achieve a better performance in dynamic capability deployment. The thesis contributes to the strategic management literature by linking managerial cognition (firm-level dominant logic) with dynamic capability deployment. More specifically, it identifies the mechanisms by which exploration- and exploitation-oriented dominant logics guide firms in their deployment of dynamic capabilities. It compares how the impacts of exploration- and exploitation-oriented dominant logics on dynamic capability deployment are different for firms established in different institutional contexts. It also highlights the need for an appropriate fit between dominant logic, dynamic capability deployment and the level of dynamism within the external environment in which firms operate, which, in turn, leads to superior performance.
- Subject
- dynamic capability deployment; competitive behavior; firms; China; firm performance
- Identifier
- http://hdl.handle.net/1959.13/1415239
- Identifier
- uon:36878
- Rights
- Copyright 2020 Yuan Gao
- Language
- eng
- Full Text
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| View Details Download | ATTACHMENT01 | Thesis | 2 MB | Adobe Acrobat PDF | View Details Download | ||
| View Details Download | ATTACHMENT02 | Abstract | 284 KB | Adobe Acrobat PDF | View Details Download |