Corporate effects and dynamic managerial capabilities
Article first published online: 12 SEP 2003
Copyright © 2003 John Wiley & Sons, Ltd.
Strategic Management Journal
Special Issue: Why is there a resource-based view? Toward a theory of competitive heterogeneity
Volume 24, Issue 10, pages 1011–1025, October 2003
How to Cite
Adner, R. and Helfat, C. E. (2003), Corporate effects and dynamic managerial capabilities. Strat. Mgmt. J., 24: 1011–1025. doi: 10.1002/smj.331
- Issue published online: 12 SEP 2003
- Article first published online: 12 SEP 2003
- corporate effects;
- dynamic capabilities;
- human capital;
- social capital;
Corporate effects in variance decomposition capture heterogeneity of business performance derived from factors internal to firms at the corporate level. Most estimates of corporate effects do not include effects associated with fluctuations in returns over time, except insofar as the fluctuations affect the average corporate return for the time period in question. Exclusion of the time-varying dimension of the corporate effect makes it difficult to fully understand the effect of corporate strategy and the actions of corporate managers, particularly in response to a changing environment. The evidence in this article shows that within a single industry, where managers face the same external environment, time-varying corporate effects associated with corporate level managerial decisions are statistically significant. We introduce the concept of dynamic managerial capabilities to underpin the finding of heterogeneity in managerial decisions and firm performance in the face of changing external conditions. Copyright © 2003 John Wiley & Sons, Ltd.