IDEAS home Printed from https://ideas.repec.org/a/oup/indcch/v26y2017i4p593-615..html
   My bibliography  Save this article

Restructuring in dynamic environments: a dynamic capabilities perspective

Author

Listed:
  • Jose L. Barbero
  • Alicia Ramos
  • Catherine Chiang

Abstract

Despite the assumed importance of environmental dynamism with respect to organizational decline, theory and evidence of its effect are lacking. Integrating work from firm survival and turnaround literature within a dynamic capabilities framework, we posit that dynamism positively moderates the relationship between firm retrenchment and performance. We find that dynamism positively moderates the relationship between firm performance and both asset and cost retrenchment. However, as expected from the dynamic capabilities framework, the moderating effects of dynamism differ according to the chosen retrenchment strategy.

Suggested Citation

  • Jose L. Barbero & Alicia Ramos & Catherine Chiang, 2017. "Restructuring in dynamic environments: a dynamic capabilities perspective," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(4), pages 593-615.
    • Handle: RePEc:oup:indcch:v:26:y:2017:i:4:p:593-615.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/icc/dtw042
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Johan Wiklund & Dean Shepherd, 2003. "Aspiring for, and Achieving Growth: The Moderating Role of Resources and Opportunities," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 1919-1941, December.
    2. Igor Filatotchev & Steve Toms, 2006. "Corporate Governance and Financial Constraints on Strategic Turnarounds," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 407-433, May.
    3. John A. Pearce & D. Keith Robbins, 1994. "Retrenchment remains the foundation of business turnaround," Strategic Management Journal, Wiley Blackwell, vol. 15(5), pages 407-417, June.
    4. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    5. Guoli Chen & Donald C. Hambrick, 2012. "CEO Replacement in Turnaround Situations: Executive (Mis)Fit and Its Performance Implications," Organization Science, INFORMS, vol. 23(1), pages 225-243, February.
    6. Pearce II, John A. & Robbins, D. Keith, 2008. "Strategic transformation as the essential last step in the process of business turnaround," Business Horizons, Elsevier, vol. 51(2), pages 121-130.
    7. José Á. Zúñiga‐Vicente & José D. Vicente‐Lorente, 2006. "Strategic Moves and Organizational Survival in Turbulent Environments: The Case of Spanish Banks (1983–97)," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 485-519, May.
    8. Danny Miller & Peter H. Friesen, 1982. "Innovation in conservative and entrepreneurial firms: Two models of strategic momentum," Strategic Management Journal, Wiley Blackwell, vol. 3(1), pages 1-25, January.
    9. Richard L Daft & Juhani Sormunen & Don Parks, 1988. "Chief executive scanning, environmental characteristics, and company performance: An empirical study," Strategic Management Journal, Wiley Blackwell, vol. 9(2), pages 123-139, March.
    10. Achim Schmitt & Sebastian Raisch, 2013. "Corporate Turnarounds: The Duality of Retrenchment and Recovery," Journal of Management Studies, Wiley Blackwell, vol. 50(7), pages 1216-1244, November.
    11. Thomas C. Powell, 2001. "Competitive advantage: logical and philosophical considerations," Strategic Management Journal, Wiley Blackwell, vol. 22(9), pages 875-888, September.
    12. Garry D. Bruton & David Ahlstrom & Johnny C. C. Wan, 2003. "Turnaround in East Asian firms: evidence from ethnic Overseas Chinese communities," Strategic Management Journal, Wiley Blackwell, vol. 24(6), pages 519-540, June.
    13. Ron Adner & Constance E. Helfat, 2003. "Corporate effects and dynamic managerial capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 1011-1025, October.
    14. Sucheta Nadkarni & Pamela S. Barr, 2008. "Environmental context, managerial cognition, and strategic action: an integrated view," Strategic Management Journal, Wiley Blackwell, vol. 29(13), pages 1395-1427, December.
    15. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    16. Gilson, Stuart C., 1990. "Bankruptcy, boards, banks, and blockholders : Evidence on changes in corporate ownership and control when firms default," Journal of Financial Economics, Elsevier, vol. 27(2), pages 355-387, October.
    17. Kalle Pajunen, 2006. "Stakeholder Influences in Organizational Survival," Journal of Management Studies, Wiley Blackwell, vol. 43(6), pages 1261-1288, September.
    18. J. Robert Baum & Stefan Wally, 2003. "Strategic decision speed and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 24(11), pages 1107-1129, November.
    19. Neil M. Kay, 2010. "Dynamic capabilities as context: the role of decision, system and structure," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1205-1223, August.
    20. David J Teece, 2014. "A dynamic capabilities-based entrepreneurial theory of the multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(1), pages 8-37, January.
    21. J. L. Morrow & David G. Sirmon & Michael A. Hitt & Tim R. Holcomb, 2007. "Creating value in the face of declining performance: firm strategies and organizational recovery," Strategic Management Journal, Wiley Blackwell, vol. 28(3), pages 271-283, March.
    22. Donald D. Bergh & Elizabeth Ngah‐Kiing Lim, 2008. "Learning how to restructure: absorptive capacity and improvisational views of restructuring actions and performance," Strategic Management Journal, Wiley Blackwell, vol. 29(6), pages 593-616, June.
    23. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    24. Pamela S. Barr & Anne S. Huff, 1997. "Seeing isn’t Believing: Understanding Diversity in the Timing of Strategic Response," Journal of Management Studies, Wiley Blackwell, vol. 34(3), pages 337-370, May.
    25. Maurizio Zollo & Sidney G. Winter, 2002. "Deliberate Learning and the Evolution of Dynamic Capabilities," Organization Science, INFORMS, vol. 13(3), pages 339-351, June.
    26. Jaideep Anand & Harbir Singh, 1997. "Asset Redeployment, Acquisitions And Corporate Strategy In Declining Industries," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 99-118, July.
    27. Vincent L. Barker Iii & Irene M. Duhaime, 1997. "Strategic Change In The Turnaround Process: Theory And Empirical Evidence," Strategic Management Journal, Wiley Blackwell, vol. 18(1), pages 13-38, January.
    28. Margaret Peteraf & Giada Di Stefano & Gianmario Verona, 2013. "The elephant in the room of dynamic capabilities: Bringing two diverging conversations together," Post-Print hal-00982438, HAL.
    29. Marc Gruber & Florian Heinemann & Malte Brettel & Stephan Hungeling, 2010. "Configurations of resources and capabilities and their performance implications: an exploratory study on technology ventures," Strategic Management Journal, Wiley Blackwell, vol. 31(12), pages 1337-1356, December.
    30. John A. Mathews, 2003. "Strategizing by firms in the presence of markets for resources," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(6), pages 1157-1193, December.
    31. Donald C. Hambrick & Richard A. D'Aveni, 1992. "Top Team Deterioration as Part of the Downward Spiral of Large Corporate Bankruptcies," Management Science, INFORMS, vol. 38(10), pages 1445-1466, October.
    32. Chanchai Tangpong & Michael Abebe & Zonghui Li, 2015. "A Temporal Approach to Retrenchment and Successful Turnaround in Declining Firms," Journal of Management Studies, Wiley Blackwell, vol. 52(5), pages 647-677, July.
    33. Laurie W. Paint, 1991. "An Investigation Of Industry And Firm Structural Characteristics In Corporate Turnarounds," Journal of Management Studies, Wiley Blackwell, vol. 28(6), pages 623-643, November.
    34. Valery S. Katkalo & Christos N. Pitelis & David J. Teece, 2010. "Introduction: On the nature and scope of dynamic capabilities," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1175-1186, August.
    35. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    36. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    37. Brian Boyd, 1990. "Corporate linkages and organizational environment: A test of the resource dependence model," Strategic Management Journal, Wiley Blackwell, vol. 11(6), pages 419-430, October.
    38. Cynthia A. Montgomery & Birger Wernerfelt & Srinivasan Balakrishnan, 1989. "Strategy content and the research process: A critique and commentary," Strategic Management Journal, Wiley Blackwell, vol. 10(2), pages 189-197, March.
    39. Matthew Semadeni & Albert A. Cannella Jr. & Donald R. Fraser & D. Scott Lee, 2008. "Fight or flight: managing stigma in executive careers," Strategic Management Journal, Wiley Blackwell, vol. 29(5), pages 557-567, May.
    40. E. Geoffrey Love & Nitin Nohria, 2005. "Reducing slack: the performance consequences of downsizing by large industrial firms, 1977–93," Strategic Management Journal, Wiley Blackwell, vol. 26(12), pages 1087-1108, December.
    41. Bruce Kogut & Udo Zander, 1996. "What Firms Do? Coordination, Identity, and Learning," Organization Science, INFORMS, vol. 7(5), pages 502-518, October.
    42. Dominic Elliott & Denis Smith, 2006. "Cultural Readjustment After Crisis: Regulation and Learning from Crisis Within the UK Soccer Industry," Journal of Management Studies, Wiley Blackwell, vol. 43(2), pages 289-317, March.
    43. Thomas P. Moliterno & Margarethe F. Wiersema, 2007. "Firm performance, rent appropriation, and the strategic resource divestment capability," Strategic Management Journal, Wiley Blackwell, vol. 28(11), pages 1065-1087, November.
    44. Vincent L. Barker & Mark A. Mone, 1994. "Retrenchment: Cause of turnaround or consequence of decline?," Strategic Management Journal, Wiley Blackwell, vol. 15(5), pages 395-405, June.
    45. David J. Teece, 2012. "Dynamic Capabilities: Routines versus Entrepreneurial Action," Journal of Management Studies, Wiley Blackwell, vol. 49(8), pages 1395-1401, December.
    46. Constance E. Helfat, 1997. "Know‐how and asset complementarity and dynamic capability accumulation: the case of r&d," Strategic Management Journal, Wiley Blackwell, vol. 18(5), pages 339-360, May.
    47. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    48. Ensley, Michael D. & Pearce, Craig L. & Hmieleski, Keith M., 2006. "The moderating effect of environmental dynamism on the relationship between entrepreneur leadership behavior and new venture performance," Journal of Business Venturing, Elsevier, vol. 21(2), pages 243-263, March.
    49. Vincent L. Barker III & Paul W. Patterson Jr & George C. Mueller, 2001. "Organizational Causes and Strategic Consequences of the Extent of Top Management Team Replacement During Turnaround Attempts," Journal of Management Studies, Wiley Blackwell, vol. 38(2), pages 235-270, March.
    50. Shaker A. Zahra & Harry J. Sapienza & Per Davidsson, 2006. "Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda," Journal of Management Studies, Wiley Blackwell, vol. 43(4), pages 917-955, June.
    51. Yan Zhang, 2008. "Information asymmetry and the dismissal of newly appointed CEOs: an empirical investigation," Strategic Management Journal, Wiley Blackwell, vol. 29(8), pages 859-872, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adilson Carlos Yoshikuni & José Eduardo Ricciardi Favaretto & Alberto Luiz Albertin & Fernando de Souza Meirelles, 2022. "How can Strategy-as-Practice Enable Innovation under the Influence of Environmental Dynamism?," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 26(1), pages 200131-2001.
    2. Manuel Rico & Naresh R. Pandit & Francisco Puig, 2021. "SME insolvency, bankruptcy, and survival: an examination of retrenchment strategies," Small Business Economics, Springer, vol. 57(1), pages 111-126, June.
    3. Manuel Rico & Santiago Cantarero & Francisco Puig, 2021. "Regional Disparities and Spatial Dependence of Bankruptcy in Spain," Mathematics, MDPI, vol. 9(9), pages 1-20, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fainshmidt, Stav & Nair, Anil & Mallon, Mark R., 2017. "MNE performance during a crisis: An evolutionary perspective on the role of dynamic managerial capabilities and industry context," International Business Review, Elsevier, vol. 26(6), pages 1088-1099.
    2. Lars Schweizer & Andreas Nienhaus, 2017. "Corporate distress and turnaround: integrating the literature and directing future research," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 3-47, June.
    3. Achim Schmitt & Sebastian Raisch, 2013. "Corporate Turnarounds: The Duality of Retrenchment and Recovery," Journal of Management Studies, Wiley Blackwell, vol. 50(7), pages 1216-1244, November.
    4. Wohlgemuth, Veit & Wenzel, Matthias & Berger, Elisabeth S.C. & Eisend, Martin, 2019. "Dynamic capabilities and employee participation: The role of trust and informal control," European Management Journal, Elsevier, vol. 37(6), pages 760-771.
    5. Ferreira, Jorge & Coelho, Arnaldo & Moutinho, Luiz, 2020. "Dynamic capabilities, creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation," Technovation, Elsevier, vol. 92.
    6. Jean-Philippe Vergne & Colette Depeyre, 2015. "How do firms adapt? A fuzzy-set analysis of the role of cognition and capabilities in U.S. defense firms’ responses to 9/11," Post-Print hal-01274005, HAL.
    7. Michailova, Snejina & Zhan, Wu, 2015. "Dynamic capabilities and innovation in MNC subsidiaries," Journal of World Business, Elsevier, vol. 50(3), pages 576-583.
    8. Björn Michaelis & Shalini Rogbeer & Lars Schweizer & Zafer Özleblebici, 2021. "Clarifying the boundary conditions of value creation within dynamic capabilities framework: a grafting approach," Review of Managerial Science, Springer, vol. 15(6), pages 1797-1820, August.
    9. Jutta Wollersheim & Koen H. Heimeriks, 2016. "Dynamic Capabilities and Their Characteristic Qualities: Insights from a Lab Experiment," Organization Science, INFORMS, vol. 27(2), pages 233-248, April.
    10. Ilgaz Arikan & Ipek Koparan & Asli M Arikan & Oded Shenkar, 2022. "Dynamic capabilities and internationalization of authentic firms: Role of heritage assets, administrative heritage, and signature processes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 601-635, June.
    11. Wittenstein, Daniel, 2020. "Champions of digital transformation? The dynamic capabilities of hidden champions," ZEW Discussion Papers 20-065, ZEW - Leibniz Centre for European Economic Research.
    12. Quan Anh Nguyen & Gillian Sullivan Mort, 0. "Conceptualising organisational-level and microfoundational capabilities: an integrated view of born-globals’ internationalisation," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-23.
    13. Ralf Meinhardt & Sebastian Junge & Martin Weiss, 2018. "The organizational environment with its measures, antecedents, and consequences: a review and research agenda," Management Review Quarterly, Springer, vol. 68(2), pages 195-235, April.
    14. Shaker A. Zahra & Olga Petricevic & Yadong Luo, 2022. "Toward an action-based view of dynamic capabilities for international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 583-600, June.
    15. Richard Arend, 2013. "Ethics-focused dynamic capabilities: a small business perspective," Small Business Economics, Springer, vol. 41(1), pages 1-24, June.
    16. Darshana Mudalige & Noor Azizi Ismail & Marlin Abdul Malek, 2016. "Exploratory Study on Relationship between Entrepreneur Characteristics and Dynamic Capabilities in Export SMES," Paradigm, , vol. 20(2), pages 113-130, December.
    17. Wolfgang H. Güttel & Stefan Konlechner & Barbara Müller, 2012. "Entscheidungsmuster und Veränderungsarchitekturen in Wandelprozessen: Eine Dynamic Capabilities-Perspektive," Schmalenbach Journal of Business Research, Springer, vol. 64(6), pages 630-654, September.
    18. Claudia D’Annunzio & Mariela Carattoli & Dolores Dupleix, 2015. "Dynamic Capabilities Associated with a Firm’s Growth in Developing Countries. A Comparative Study of Argentinean SMEs in the Software and Tourism Industries," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 11(4), pages 25-62.
    19. Khan, Zaheer & Lew, Yong Kyu, 2018. "Post-entry survival of developing economy international new ventures: A dynamic capability perspective," International Business Review, Elsevier, vol. 27(1), pages 149-160.
    20. Richard Arend, 2014. "Entrepreneurship and dynamic capabilities: how firm age and size affect the ‘capability enhancement–SME performance’ relationship," Small Business Economics, Springer, vol. 42(1), pages 33-57, January.

    More about this item

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:indcch:v:26:y:2017:i:4:p:593-615.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/icc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.