Foley, Linda M.; Vorhies, Douglas W.; Bush, Victoria D.
January 2005
AMA Winter Educators' Conference Proceedings;2005, Vol. 16, p138
Conference Proceeding
Increasingly, the dynamic capabilities view is being utilized as a favored approach to understanding a firm's competitive advantage. The dynamic capabilities view builds on the previous resource based view of the firm by supplementing its strengths while simultaneously recognizing its weaknesses (Priem and Butler 2001; Eisenhardt and Martin 2000; Teece, Pisano, and Schuen 1997). This emerging capabilities literature realizes that the possession of rare, imperfectly imitable, and valuable resources is an important step to build competitive advantage. However, dynamic capabilities also address the development and deployment of these resources and how resources are integrated together within a firm (Barney, Wright, and Ketchen 2001; Day 1994). The dynamic capabilities "view recognizes that the deployment of resources through these organizational processes may better explain firm performance variations than absolute resource levels in driving firm performance" (Ray, Barney, and Muhanna 2004). Due to its inherent advantage, researchers have studied this important concept (e.g., Teece, Pisano, and Schuen 1997; Day 1994). However, despite all the recent attention, little research has been conducted with specific regard to dynamic capabilities and marketing. Since marketing processes are constantly undergoing adaptations that parallel the changes in consumer preferences and the environment as a whole, it is extremely important to understand marketing processes in a dynamic context. A better understanding of marketing capabilities may lead to the ability to answer some fundamental questions to both academics and practitioners. For example, why are some firms better at adapting to change than others? What business processes and routines must be in place to allow firms to adequately adjust to modifications in consumer preferences, economic, or other environmental conditions? How do firms generate continual and successful innovative thinking? How does this internal reconfiguration to adapt to external changes affect overall business performance, from both a perspective of financial outcomes and positions of advantage? And, finally, how do specific marketing functions such as customer relationship and brand management play into outcomes like customer satisfaction and brand equity from a dynamic capabilities perspective? This paper attempts to answer the above questions by integrating dynamic capabilities into a single unified framework. In order to do so, we classify and subdivide the various levels of organizational routines and processes into lower and higher order capabilities constructs. Since the addition of the word "dynamic" to the term "dynamic capabilities" implies learning through reconfiguration, development, and integration, it was necessary to integrate the organizational learning literature into the framework presented here. This paper contributes to academia by tying marketing capabilities to the financial performance of the firm, which is a topic which has had numerous calls for research (e.g., Srivastiva, Shervani, and Fahey 1998) including a recent edition of the Journal of Marketing devoted to understanding this relationship. Additionally, the framework was also developed based on qualitative interviews with key informants in marketing organizations.


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