Deconstructing dynamic capabilities: the role of cognitive and organizational routines in the innovation process

Abstract

A better understanding of innovation processes might lead to productivity improvements. By focusing on a specific, economically relevant sector (construction) and on a specific type of firm (small to medium-sized enterprises, SMEs), the dynamic capabilities framework is extended by clarifying the roles of cognitive and organizational routines in organizational innovation processes. Insights generated from an in-depth case study of a medium-sized construction firm reveal that dynamic capabilities might diminish the relevance of an explicit innovation focus, because such capabilities have the potential to trigger emergent, incremental innovations. Accordingly, for construction SMEs, a development, rather than research, mode of innovation appears relatively more critical, as manifested in conscious cognitive routines and functional/integrative organizational routines.

Keywords:

• Cognitive routines
• competitiveness
• dynamic capabilities
• innovation
• organizational routines

Notes

1. Quasi- (or Ricardian) rents derive from the scarcity and value of resources and capabilities that are unique and cannot readily be replicated (Penrose, 1959; Klein et al., 1978).

2. Schumpeterian rents accrue from risky initiatives and entrepreneurial insights that lead to innovations, rendered by (new) combinations of resources and capabilities (Amit and Zott, 2001).