Not Only A Matter of Dynamic Managerial Capabilities

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.