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The Exceptional Manager

Chapter 3: Transforming Strategy

Resources Competences and the Problem of Inertia

There has been continued interest in Dynamic Capabilities and Higher Order Innovation. A recent review book (Helfat et al., Dynamic Capabilities: Understanding Strategic Change in Organizations, Blackwell, 2007) provided some structure on what otherwise has been seen by some commentators as a research domain "riddled with inconsistencies, overlapping definitions, and outright contradictions" (Shaker A. Zahra, Harry J. Sapienza, and Per Davidsson (2006), 'Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda', Journal of Management Studies 43:4 June, 917-955).
There has been some AIM related research on phenomena which might be seen as closely linked to the issue of Dynamic Capabilities such as the questions of the long run evolution of firm boundaries and particular value chains (see Jacobides, AIM) but in general the AIM research has focused on two rather different perspectives on the same general issue: the nature of managerial practice and practices and the issue of handling discontinuous innovation (see particularly AIM). See also comments later on Chapter 9.

A number of studies have identified that the issues of managing to balance operations between existing and new business models arises in Services as well as Manufactured: particularly in the nature and impact of customisation. There has been quite a lot of further work in the nature of the so-called ambidextrous organisations. Various isolating mechanisms have been identified which in general help the parallel development of activities designed around new exploratory business models whilst also encouraging the achievement of further efficiency gains within the existing model (see Birkinshaw et al., AIM).