Book Description

The relationship between resources and capabilities and performance has been discussed since Edith Penrose addressed the mechanisms behind the growth of the firm (Penrose, 1959). Early contributions to this area of research suggest that valuable and inimitable resources and capabilities are the primary sources of superior performance and sustained competitive advantage (Barney, 1991; Wernerfelt, 1984), while more recent contributions suggest that the ability to change and re-configure resources and capabilities (dynamic capabilities) are the most important for performance, especially when the market is unstable (Teece, 2014; Teece, Pisano & Shuen, 1997). It has also been argued that firms may utilize their resources and capabilities through the development of innovations in the form of new products, services or processes (Hill, Brandeau, Truelove & Lineback, 2015), and empirical research has confirmed that there is a positive relationship between the implementation of innovation activities and the future performance of firms (Bowen, Rostami & Steel, 2010; Rubera & Kirca, 2012). However, innovation as a phenomenon entails change, as opposed to resources and capabilities that represents a firm’s ability to reproduce a certain performance – and as such involves stability. Viewed in this way the very term innovation capability can constitute an oxymoron. The study of innovation capabilities is therefore a complex field of study that is emerging. The topic has already attracted interest from a number of scholars (e.g. Forsman, 2011; Guan & Ma, 2003; Hertog, van der Aa & de Jong, 2010; Wang, Lu & Chen, 2008; Yam, Lo, Tang & Lau, 2011), but despite these important advances there is still a lack of consensus in the literature and a pressing need to clarify what type of resources and capabilities drive innovation in different contexts (Lidija & Robert, 2014), and how these capabilities are developed and utilized (Helfat & Peteraf, 2003).