Not Only A Matter of Dynamic Managerial Capabilities: Making More of Corporate Resources in Dynamic Environments

Jung C, Foege J N, Nüesch S

Abstract

In recent years, the interplay of managers and resources, and their combined influence on organizational performance, have received considerable attention in management research. Surprisingly, empirical evidence within a corporate setting remains scarce. Building on the Dynamic Capabilities View, and the foundations of the Resource-based View, we take a configurational approach, and find that the degree of a resource's fungibility alters the options and flexibility of managerial actions; depending on how fungible they are, corporate productive resources can either support or hinder dynamic managerial capabilities from materializing into firm performance. A dynamic fixed-effects model shows that highly fungible cash resources improve the relationship between dynamic managerial capabilities and the firm's performance, whereas less-fungible human resources make that relationship worse. Similarly, bundles of abundant financial resources and constrained human resources enhance the value-creation potential of dynamic managerial capabilities. Additionally, we find that a dynamic environment is a positive combinative element for the synergistic interplay of dynamic managerial capabilities and resources, but only in the case of highly fungible resources. In conclusion, our study calls for a more holistic assessment of dynamic managerial capabilities by accounting both for a firm's resources and the market environment.