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Dynamic Capabilities and Penrose’s Growth Theory: The Strategic Growth of Hon Hai

In: Strategic Management and Innovation Strategies

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  • Yawen Huang

    (Hokusei Gakuen University)

Abstract

This study uses Edith Penrose’s The Theory of the Growth of the Firm (1959/2009) and the dynamic capabilities framework to examine the growth trajectory of Hon Hai Precision Industry Co., Ltd. (Foxconn) from its founding in 1974 to 2001. This research uses these complementary theoretical perspectives to analyze how Hon Hai leveraged its historical expertise, entrepreneurial vision, and resource adaptability to evolve from a small plastic parts manufacturer into a global leader in the electronics manufacturing services industry. The study highlights three key strategic dimensions: sensing opportunities through proactive identification and utilization of unused productive services, seizing opportunities with bold managerial decision-making and resource commitment, and reconfiguring resources through technological innovation, training programs, and vertical integration. Hon Hai addressed the challenges of dynamic global markets and redefined industry standards by aligning its resource base with emerging market demands. This case underscores the enduring relevance of Penrose’s insights and dynamic capabilities in modern strategic management, providing valuable insights for firms navigating high-velocity environments to achieve sustained competitive advantage.

Suggested Citation

  • Yawen Huang, 2025. "Dynamic Capabilities and Penrose’s Growth Theory: The Strategic Growth of Hon Hai," Springer Books, in: Takabumi Hayashi & Yoshikazu Sakamoto (ed.), Strategic Management and Innovation Strategies, chapter 0, pages 79-101, Springer.
    • Handle: RePEc:spr:sprchp:978-981-96-8437-3_4
    DOI: 10.1007/978-981-96-8437-3_4
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