Dynamic Capabilities - Essay Example

Introduction

Analysts of key administration have seen the rise of dynamic capability as an idea that tends to answer and demonstrate the ways in which organizations have a tendency to secure upper hand in the dynamic market (Kuuluvainen, 23). Dynamic capability involve the arrangement of a productive way to deal with business operations ensuring the advancement of business execution with the thought of its asset enrichment The interest in operational administration procedure imagines the conceptualization of the dynamic abilities ensuring that the firm can perform maximally with individual to an imperative of its asset blessing . This essay reviews the emergency of the dynamic capability and its importance to the organizations.

Review of articles

The article Dynamic Capabilities: What are they? focuses on this concept of dynamic capabilities specifically and generally the organization’s resource-based view. The article states that the resource based view or RBV is relatively influential theoretical framework for internalizing how such an advantage may be viably sustained over time (Eisenhardt and Martin, 2000). It clearly explains that long term competitive advantages normally lie in resource configuration not simply dynamic capabilities. David Teece, in his paper states that for open economies that are exposed to swift technological change, the framework of dynamic capabilities shows managerial and organizational competencies that enable a firm attain competitive advantage (Teece, 2007). Unlike the other sources, Teece explores the importance of entrepreneurial management when it comes to maintaining dynamic capabilities.

Wang and Ahmed (2007), state that the concept of dynamic capabilities complements their premise of the firm’s resource-based view. The article clarifies the issue of dynamic capabilities and also identifies three principle factors that often reflect upon the features of dynamic capabilities in organizations and that can also be adopted and nurtured. Managers should however not take dynamic capabilities simply as a standalone target (Wang & Ahmed, 2007). They should also consider the change trajectory within the outer company environment, the company’s current and historical weaknesses and strengths as well as its strategic orientation so as to effectively channel the firm’s resources toward capability development (Wang & Ahmed, 2007). Ambrosini and Bowman (2009), state that the issue of dynamic capabilities came to the fore during the 1990s. The field has witnessed considerable advancement since then. The current dynamic capabilities approach is viewed as an offshoot to the RBV since it provides an explanation on how present stock of the VRIN resources can be regenerated.

Arena, et al. (2014) describes dynamic capabilities as a company’s ability to transform and leverage its core resources that have been construed by the intangible and tangible assets owned and controlled by the company. However, Jentsch, Riedel and Mueller (2012) criticizes the resource-based theory as missing out on the point that possession of resources is not enough to sustain operational advantage when faced with a turbulent environment. Wu, He and Duan (2013) state that even though dynamic capabilities are normally deployed to deal with changes in the external environment, they cannot be termed as equal to ad hoc problem-solving that normally involve improvisational firefighting strategies. Kuuluvainen (2012) exalts the importance of dynamic capabilities and the fact that this importance has been amplified due to the world economy growing more open and primary sources of manufacturing and innovation becoming even more diverse organizationally and geographically. Eltantawy (2016) describes dynamic capabilities approach as the acquisition, identification, positioning, access as well as management of resources and other organizational needs in the attainment of its supply management and strategic objectives.

Dynamic capability and operations strategy

Operations system is the aggregate example of choices which affect the long term capabilities of an operation as well as their contribution to general technique, through the compromise of market prerequisites with operational resources (Slack and Lewis, 2011). Operations procedure can likewise be defined as the methods firms employed to attain their set targets (Jentsch, Riedel and Mueller, 2012). By formulating operational methods or techniques, a company can look at and actualize successful and productive frameworks for using assets, faculty and the job procedure. Service-oriented businesses likewise employ fundamental operational methodologies to connect long and short-term corporate choices and make an effective administration team (Dangol and Kos, 2014).

From the past definition, operations strategy is concerned with the compromise of market necessities and operations assets (Dangol and Kos, 2014). It does this by: (1) Satisfying business sector necessities (measured by focused elements) by setting suitable execution targets for operations, and (2) taking choices on the sending of operations assets which impact the execution targets for operations. By creating dynamic abilities, firms can pick up, maintain and apply new learning that can control developments and innovations (Teece et al., 2009). Regardless of developing writing on service innovation, it stays divided mirroring the requirement for a model that catches key main thrusts for the administration development (Salunke et al., 2011). In exceptionally aggressive and constantly changing environment organizations should have the capacity to anticipate changes and prepare to roll out improvements in their system, so as to maintain and keep up upper hand. The capacity to do this systematically has been alluded as powerful ability. Its primary objective is to clarify long haul competitive advantage of the firm (Eriksson, 2014; Teece et al., 2007).

Strategy content and strategy process at times differ when it comes to their core issues. For example, content has long been concerned with matters that touch on scope of the company or competition within markets. This kind of focus parallels some of the key concerns when it comes to dynamic capabilities (Eisenhardt, 2004). The focus of strategy process as well as content is different in another aspect as well. Company content issues mostly center on the “what” questions of strategy while process on the other hand investigates the “how” aspect. These “what” and “how” questions that seek to distinguish the areas of strategy content from strategy process are closely related. Their complementarity is clear and in this respect, bringing on board the process perspective to bear on the ‘how’ questions that are related to dynamic capabilities can go a long way in building a picture that is complete (Eisenhardt, 2004).

Reconfiguration

The process of reconfiguration entails the renovation and the accumulation of assets and resources endowment of the business with a sole aim of providing an optimal strategy to utilize the property and resources. The process ensures that the firm cumulates its assets and resources and renders technical enhancements to provide an optimal value results outs of the assets and resources. Reconfiguration augments the business in a position to incorporate competitive features as well as innovative improvements to enhance the output of the assets and management (Wang, and Ahmed, 2007). Notably, reconfiguration as a crucial part of dynamic capabilities ensures that the business adopts an optimal strategy in the utilization of enterprise resources and assets (Ambrosini and Bowman, 2009).

Creative integration

Creative integration encompasses the ability of the firm to successfully integrate its assets and resources with the aim of delivering highly efficient process and systems. Creative integration entails the birth of a new and highly effective set of resources and systems targeting to foster sustainable business operation and eventually optimal returns for the firm (Kim, Song, and Triche, 2015). The process amounts to new resource configuration in business, therefore, facilitating massive improvement in the management and performance of the organization. As a process of dynamic capabilities, creative integration encompasses the recreation of business resources which subsequently facilitates the sustainable management of future uncertainties (Dangol, and Kos, 2014).

Conclusion

Conclusively, businesses are obliged to seek approaches to deliberate o efficient business operation mechanism. The concept of dynamic capabilities encompasses a general optimization of business performance. Dynamic capabilities entail the provision of operational strategy to maximize the utility of internal and external forces. The conceptualization of the dynamic capabilities incorporates processes that subsequently lead to sustainable business operations. The assessment of the business opportunities and threats provides valuable insights on the external dynamics that necessitates the adoption of operational strategies to ensure the company performs at the highest level. The understanding of dynamic capabilities provides the business with an opportunity to articulate an optimal approach to the utilization of assets and resources of the firm.

Part B

Case Study of Norrkoping Plant

Introduction

The Norrkoping Plant Case articulates the essence of adoption of dynamic capabilities approach and the development of the operational strategy. Notably, the case study signifies how companies can enhance their competitiveness and optimal performance and also the possible implication of overlooking essential business operation parameters such as dynamic capabilities concept (Hamid, 2010). In spite of remarkable success in the past, in converting machinery industry through its coating technology, the Norrkoping Plant almost ran out of business. The stiff competition from her main rival Saviste Graphics that introduced a new coating technology renders the Norrkoping plant as obsolete hence technically disadvantaged (Johnston, 2003). Notably, the coating plant makes a comeback by adopting operational strategies.

How Performance Objectives have changed at Norrkopin

The Norrkoping Plant is built around the notion of a rebirth targets whereby the machine is labeled as ‘the monster’ signifying the greatest achievement of the plant in its lifetime. The advancement in the technological endowment of Norrkoping Plant is a thrilling manifestation of the desired need to enhance its competitiveness in the market (Johnston, 2003). The rise of Saviste Graphics to the top positions renders the needs to consider dynamic capabilities conceptualization which resulted in the development of ‘the monster’ of Norrkoping Plant. Evidently, the advancement of performance objectives of the Norrkoping Plant has hugely contributed to the devising and implementation of particular operational strategy up to the current design and technology which is the most advanced.

The change of the plant's objectives includes the development of the most advanced coater machinery assisting the plant to increase its manufacturing capacity and the achievement of new standards of quality (Johnston, 2003). Notably, the Norrkoping Plant regains its position as the biggest and most advanced plant in the world whereby the production capacity and quality of production is significantly enhanced.

Initial Performance objectives

• Maintaining its market share
• Keeping its competitors at bay
• Growing its market share

The plant’s new performance Objectives

• Regain its market share
• Improving on its competitive edge
• Revamp its obsolete machinery
• Become the market leader by upstaging Saviste Graphics

Norrkoping Plant operations strategy analysis

Operations procedure is characterized as the strategies firms employ to attain their goals (Hamid, 2010). By coming up with operational procedures, a firm can look at and execute powerful and proficient frameworks for using assets, faculty and the task’s procedure. Administration situated organizations also make use of fundamental operational procedures to connect long and here-and-now managerial choices and make a viable administration team.

The technology Norrkoping Plant picked was a customary approach which was drying has it utilize generally low vitality levels connected to the material over a long web way, gradually drying the material and making for less demanding controls of the drying process. The more radical arrangement was to subject the materials to higher vitality levels over a shorter web way. A noteworthy preferred standpoint of high vitality drying was that it required a shorter machine and in this way a littler plant to house it. They also decided on the self-managed work teams which will Increase workers’ ownership, more fulfilling for all staff members involved. This leads to pride, as well as high quality services.

Slacks Matrix for operational strategy at Norrkoping Plant

Resource Development

Quality of products and services

The newer plant has a higher capacity than the obsolete previous plant.

Plant “Monster” upgrading

The monster is currently regarded as the most advanced coater machinery

Flexibility and response to the market and competition

The company responded to stiff competition from its main rival Saviste Graphics that had come up with a new coating technology

Minimizing cost

The more advanced machine is energy efficient leading to reduced costs

Capacity

Technology/Process Development

Capacity

The change of the plant's objectives includes the development of the most advanced coater machinery assisting the plant to increase its manufacturing capacity and the achievement of new standards of quality (Johnston, 2003). Notably, the Norrkoping Plant regains its position as the biggest and most advanced plant in the world whereby the production capacity and quality of production is significantly enhanced.

Technology/process development

The Norrkoping Plant is built around the notion of a rebirth targets whereby the machine is labeled as ‘the monster’ signifying the greatest achievement of the plant in its lifetime. The advancement in the technological endowment of Norrkoping Plant is a thrilling manifestation of the desired need to enhance its competitiveness in the market (Johnston, 2003). The rise of Saviste Graphics to the top positions renders the needs to consider dynamic capabilities conceptualization which resulted in the development of ‘the monster’ of Norrkoping Plant. Evidently, the advancement of performance objectives of the Norrkoping Plant has hugely contributed to the devising and implementation of particular operational strategy up to the current design and technology which is the most advanced.

Conclusion

In summary the Norrkoping Plant reveals the optimization of an operational strategy upon the prompt shake up that almost pushed the plant out of existence. Carlsen group hugely indebts a complete reliance on performance objectives and operation strategies to augment the best business establishment in the photo resist imaging industry. Evidently, the success of the operational strategy of the Norrkoping Plant indicates a substantial applicability of the concept of dynamic capabilities attributable to use of internal and external resources to deliver an optimal functioning business. Ultimately, the case of the Norrkoping Plant substantially manifests the essence of understanding of dynamics capabilities knowledge and its applicability in operation strategy formulation.

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