The role of entrepreneurship on the foundations of dynamic capabilities

Abstract

This work investigates the antecedents and consequences of dynamic capabilities using data from Portuguese and Brazilian firms. Specifically the influence of entrepreneurship as an opportunity sensing base, the effect on human resources (HR) capability to reach those opportunities, and finally knowledge management (KM) consequences on firm performance. Using a two-country questionnaire, four organisational capabilities are examined, and the link to value creation is established: entrepreneurship capabilities, knowledge management, human resources management capabilities and strategic decision flexibility. The main objective of this research is the operationalisation of a stream of thought on dynamic capabilities. To analyse our model, we have chosen to apply a path analytic technique. This multivariate analysis methodology is regularly used for empirically examining sets of relationships represented in the form of linear causal models, and allows the direct, indirect and total effects. We present the operationalisation of an aggregate construct in this field thus contributing to develop empirical research of dynamic capabilities. Measures were adapted to reflect dynamic decision making. The results show that dynamic capabilities are a complex set of capacities conjugated in sensing, seizing, and reconfiguring processes. Managerial implications for these two countries are discussed.