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Adapting to market liberalization: The role of dynamic capabilities, initial resource conditions, and strategic path choices in determining evolutionary fitness of Less Developed Country (LDC) firms

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  • Malik, Omar R.

Abstract

Economic liberalization leads to higher competitive intensity that spurs strategic changes in LDC domestic firms. I apply the dynamic capabilities lens to post-liberalization adaptation of LDC domestic firms. Based upon the logic of fit, I argue that initial resource conditions, strategic paths, and requisite dynamic capabilities must match to enhance evolutionary fitness of firms. I propose that LDC firms with strong core and complementary capabilities will adopt strategies of increasing scale and scope, along with cultivating an acquisition dynamic capability to enhance fitness. LDC firms with weak core but strong complementary capabilities could enhance fitness by forming rent-creating alliances with Multinational Enterprises (MNE), and building relational dynamic capabilities. Finally, LDC firms with weak core and complementary capabilities can gain benefits towards fitness by enacting political strategies supported by political dynamic capabilities.

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  • Malik, Omar R., 2008. "Adapting to market liberalization: The role of dynamic capabilities, initial resource conditions, and strategic path choices in determining evolutionary fitness of Less Developed Country (LDC) firms," Journal of International Management, Elsevier, vol. 14(3), pages 217-231, September.
  • Handle: RePEc:eee:intman:v:14:y:2008:i:3:p:217-231
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    References listed on IDEAS

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    Cited by:

    1. Oehmichen, Jana & Puck, Jonas, 2016. "Embeddedness, Ownership Mode and Dynamics, and the Performance of MNE Subsidiaries," Journal of International Management, Elsevier, vol. 22(1), pages 17-28.
    2. Lee, Po-Yen & Lin, Hui-Tzu & Chen, Hung-Hsin & Shyr, Yi-Hwan, 2011. "Dynamic capabilities exploitation of market and hierarchy governance structures: An empirical comparison of Taiwan and South Korea," Journal of World Business, Elsevier, vol. 46(3), pages 359-370, July.
    3. Stav Fainshmidt & Amir Pezeshkan & M. Lance Frazier & Anil Nair & Edward Markowski, 2016. "Dynamic Capabilities and Organizational Performance: A Meta-Analytic Evaluation and Extension," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1348-1380, December.

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