Dynamic Capability Development in New Ventures: A conceptual Framework

Prior literature on dynamic capabilities and their development has primarily focused on large incumbents (e,g, Rosenbloom 2000), and multinational firms in global markets (e.g. Teece 2007). In this research, we would like to further explore dynamic capabilities in new firms: what are they and how are they different in product and service ventures. We control the context as both ventures are in the knowledge-intensive business. We disaggregate dynamic capability into sensing, seizing and reconfiguring capacities and identify relevant events in firm's development, and then categorize them into the three capacities guided by the conceptual framework. By addressing this research question, we contribute to understand the formation of dynamic capabilities in new ventures. This is important as the capabilities and the resources may be different for new firms if compared with established firms. In addition to this new context for studying dynamic capabilities, we provide the comparison of product and service ventures. We examine empirical data on their firm-based resources and the subsequent development of dynamic capabilities. Based on the different nature of product and service business, the study will contribute to a deeper understanding of dynamic capabilities in new ventures. We hope this can offer a foundation to other researchers for further refinements towards theorizing dynamic capabilities.