A Temporally Contingent View of Dynamic Managerial Capabilities

Abstract

This article contributes to research on dynamic managerial capabilities, which examines managerial impact on firms' strategic change. Specifically, we study the role of managerial social capital—a key underpinning of dynamic managerial capabilities—in organizations' strategic change. We propose a temporally contingent account that elucidates how the fitness of dynamic managerial capabilities unfolds across life cycle stages and varying degrees of change pressures. We start by testing our theoretical model using data on 20,593 individuals in 5522 new ventures over a period of 5 years. A key insight from our quantitative analysis is that dynamic managerial capabilities are particularly valuable during convergent periods, when both external pressures to accomplish strategic change and inertial forces are increasing. Our subsequent interpretivist study, aimed at elaborating the mechanisms underlying the social capital-funding effect, reveals that the types of resources and strategic changes spurred by social capital differ markedly across time. Overall, our paper enriches dynamic capabilities scholarship by highlighting that the effects of these capabilities are substantially time-variant.