Organizational Capabilities in Complex Worlds

Daniel A. Levinthal

in The Nature and Dynamics of Organizational Capabilities

Published in print November 2001 | ISBN: 9780199248544
Published online November 2003 | e-ISBN: 9780191596155 | DOI:
 Organizational Capabilities in Complex Worlds

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The chapter provides a theoretical framework for the analysis of organizational capabilities, underlining complementarity and interdependence among organizational routines and assets. A crucial consequence concerns what one could call the ‘competitiveness diagnostics’ of corporate performances: precisely because of the (non‐linear) interrelatedness in the contribution of the various organizational traits to overall performances, ‘credit assignment’ is a difficult exercise. Relatedly, in terms of organizational learning, ‘local’ exploration and adjustments are likely to be the rule, since otherwise one is likely to lose any grasp on the relationships between causes (i.e. changes in organizational behaviour) and effects (i.e. changes in revealed performances). But a fundamental corollary of all this is also that organizations are likely to end up stuck into local peaks of the ‘fitness landscape’ (which is, roughly speaking, the mapping between organizational traits and ‘competitiveness’), with low probabilities of exploring radically diverse organizational arrangements.

Keywords: complementarity; interdependence; learning; organizational capabilities; performance; routines

Chapter.  8142 words. 

Subjects: Microeconomics

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