This dissertation aims to understand the capability development processes in the
early stages of a firm. Empirically, most research has focused on established firms, or
on explaining the variance in capabilities across firms at a given time. Theoretically,
despite the shift to a more dynamic view and the increasing attention to leveraging
external capabilities, our understanding of how firms achieve dynamic change or the
interaction between the external and internal sourcing of capabilities is still limited. I
address these gaps through three interrelated studies.
Paper One adopts a multiple-case study design to develop a theory on the
initiation and development ofinnovative capabilities innew firms. The existing
literature separately focuses on internal resources or network leveraging. By contrast,
this study shows how young firms combine internal building and external leveraging
strategies to facilitate faster capability development in the early stages. Based on data
from Montreal-based biotech firms, the results uncover different implications on the
path and pace of capability development, and the role of collaboration in firms with
different internal building paths.
Paper Two focuses on how collaboration contributes to the internal capability
building in new ventures. The capability effects of engaging in collaboration have
remained unclear in the literature. Using data on collaborative scenarios from
Montreal-based biotech firms, the study uncovers four knowledge building
mechanisms in the focal firms. Each mechanism involves different knowledge added
to the firm, and requires different interaction processes with its partners. This study
increases understanding ofnetwork effects regarding capability development.
Paper Three elaborates a framework oforganizational capability development
that integrates entrepreneurship and organizational routines. It addresses an ongoing
discussion on the challenge of balancing efficiency and flexibility in organizations.
Using the case of a Chinese telecoms-equipment firm, it highlights the knowledge
dynamics between entrepreneurial activities and routines, the role of entrepreneurship
on both the external and internal organizational interfaces and the exogenous and
endogenous changes in routines. This framework advances the dynamic perspective of
capability research.
Overall, this dissertation contributes to process theories on dynamic capability
development. It generates novel insightson capability initiation, extension, and change in organizations.