Development of operational capabilities exploring the role of micro level organisational activities

Abstract

The construct of organisational capability has gained a lot of attention in the field of strategic management as its development and constant adaptation have substantial impact on the strategic prospects of organisations (Agarwal and Helfat 2009). To be competitive in the current environmental uncertainties instead of relying on a specific set of capabilities, organisations need to improve the existing capabilities or develop new ones (Winter 2003). Despite the fact that managers play a critical role in the creation and development of capabilities (Eisenhardt and Martin 2000; Helfat 2003), there have been few efforts in strategy research to address this concern. Researchers attribute this to the existing understanding of capabilities as collective entities that drive organisational heterogeneity and strategic outcomes (Felin and Foss 2005). Understanding the managerial micro activities (Johnson,Melin and Whittington 2003) at the periphery of the organisations (Johnson and Huff 1998; Regner 2010) and their linkage with strategic outcomes is critical as organisations get geographically distributed and become increasingly complex. Studying micro activities such as what managers really do and work with in relation to the realization of strategic goals provide ample opportunity to understand capability development that create competitive advantage for organisations. This study focuses specifically on the operational capabilities that drive improvement, their development and proposes a tentative model of capability development that can be applied in varied contexts. This research examines concrete situated micro level managerial activities including how managers engage with strategising practices as they involve in operational capability development using an activity theory framework within the strategy as practice approach.