Assistant Professor of Strategy
Winner of 2017 Strategic Entrepreneurship Journal Best Paper Award
Organizational Process; Capabilities; Experience; Heuristics; Opportunity Capture; Cognition;
Journal Article | Strategic Entrepreneurship Journal | 1 | November 2007
What Makes a Process a Capability? Heuristics and the Strategic Logic of Opportunity
While organizational processes, such as internationalization, acquisition, and alliance, are a fundamental concept within many literatures and central to firm capabilities, controversy exists regarding how they become high performing. One view emphasizes the role of experience while a second view emphasizes cognition and, in particular, the role of articulated heuristics.Using qualitative and quantitative field data on the internationalization process of entrepreneurial firms from three culturally distinct regions (Finland, U.S., Singapore), the authors juxtapose these two competing theoretical views to better gain insight into organizational processes and capabilities. The core contribution of our paper is insight into the structure of firm capabilities. Results show that organizational heuristics more closely relate to the development of a high performing process and hence a firm capability.At a broader level, the authors contribute to strategy by empirically validating the strategic logic of opportunity, a logic that is particularly relevant in dynamic markets and growth oriented firms.The authors also contribute to entrepreneurship by adding to the opportunity discovery vs. opportunity creation debate, and by shedding light on the relationship between structure and performance in new ventures.Overall, the authors contribute to the emerging but growing body of research emphasizing a more cognitive view of firms.