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Historically, dynamic alliance portfolio management capabilities have undoubtedly been intrinsic to heightening the likelihood of realising the successful enhancement of sustained enterprise entrepreneurial growth. However, their relevance is contemporaneously amplified because the global economy has rapidly mutated, thus, the sources of invention, innovation, and manufacturing are increasingly diverse, both geographically and organisationally, and multiple solutions must be combined to realise the success of the enhancement of sustained enterprise entrepreneurial growth. Achieving evolutionary fitness is contemporaneously tougher than it was before the millennium. Furthermore, regulatory and institutional structures must often be reshaped for new markets to emerge; and as forwarded later, the ubiquity of ‘platforms’ must now be recognised.
While the essentiality of the development and astute management of seemingly inimitable and intangible organisational resources (i.e., difficult-to-replicate enterprise capabilities) is well acknowledged as central to the enhancement of sustained entrepreneurial growth success, the understanding of how and in what ways these seemingly inimitable and intangible organisational resources are contemporaneously critical, still remains opaque – and is not addressed by orthodox frameworks. Therefore, a need for a progressive framework for enterprise and economic analysis is in order. The dynamic alliance portfolio management capabilities approach developed herein endeavours to take some initial steps towards demystifying these pertinent discrepancies at the enterprise-level. These soon-to-be demystified pertinent discrepancies at the enterprise-level are herein related to deepening the understanding of the endogenous entrepreneurial processes of building dynamic alliance portfolio management capabilities that heterogeneously enhance the sustained entrepreneurial growth of E.F.SMEs. E.F.SMEs endogenous entrepreneurial processes of building dynamic alliance portfolio management capabilities refer to the micro-foundations that undergird this dynamic interplay. This dynamic interplay disentangles the intricacies involved in incorporating varied functional-level alliance portfolios to enhance sustained enterprise entrepreneurial growth.
As a consequence, the idiosyncratic nature of the underlying dynamic alliance portfolio management capability is identified and succeeding efforts made to demarcate the micro-foundations of this peculiar capability from an operational capability. Put differently, important distinctions are made amongst endogenous entrepreneurial processes that undergird this idiosyncratic dynamic alliance portfolio management capability, and an operational capability. Relevantly, the identification of the micro-foundations of dynamic alliance portfolio management capabilities must expectedly be incomplete, inchoate, and somewhat opaque and/or their implementation must be arduous. Otherwise, the successful enhancement of sustained enterprise entrepreneurial growth would erode following the effective communication and application of dynamic alliance portfolio management capability concepts.
Admittedly, the existence of endogenous entrepreneurial processes hitherto ubiquitously adopted by counterparts/competitors does not imply that they have been immune to sources of past success of the enhancement of sustained entrepreneurial growth in certain contexts. For instance, studies examining the diffusion of organisational innovation (De Massis et al., 2016; Clinton et al., 2018; Goel & Jones, 2016; Kammerlander et al., 2015; Schumpeter, 1934) demonstrate that diffusion does not happen instantaneously, and that profits can continuously persist before being competed away. Decade-long adoption cycles for new endogenous entrepreneurial processes (e.g., performance measurement systems) are not uncommon. Furthermore, uncertain imitability may restrain the diffusion process and foster persistent differential performance.
Auspiciously, the existing literature on strategic entrepreneurship, and organisation, together with the burgeoning literature on dynamic capabilities that forms the theoretical background of this study – have identified a panoply of endogenous entrepreneurial processes that can be attributed to explicating certain micro-foundations for building dynamic alliance portfolio management capabilities. For example, Eisenhardt & Jeffrey (2000), Verreynne et al. (2016), and De Massis et al. (2018) identify cross-functional R&D teams, new product development routines, quality control routines, and technology transfer and/or knowledge transfer routines, and certain performance measurement systems as vital elements (micro-foundations) of building dynamic alliance portfolio management capabilities. Following this trajectory, the endeavour herein is not designed to be comprehensive. Rather, the overriding aim is to draw upon the burgeoning dynamic capabilities literature, and thereby provide an umbrella framework for policy development. This essentially highlights the overriding dynamic alliance portfolio management capabilities that senior management requires to sustain the evolutionary and entrepreneurial fitness of a focal E.F.SME. In so doing, this vital intervention heightens the likelihood of affirming the realisation of the successful enhancement of sustained entrepreneurial growth – within these enterprises.
This endeavour comprehensively implies investigating the enterprise-level micro-foundations involved in building dynamic alliance portfolio management capabilities that heterogeneously enhance sustained entrepreneurial growth. Following this positioning, an established body of literature contends that the abilities of business enterprises in forging superior absorptive capacities (ACAP) whilst managing varied functional-level alliance portfolios – presents a distinctively fundamental type of dynamic alliance portfolio management capability. Generally, absorptive capacity (ACAP) entails an enterprise’s ability to understand and take advantage of new ideas. ACAP consists of two distinct, albeit complementary dimensions, namely, potential ACAP (PACAP) and realised ACAP (RACAP). PACAP comprises gaining access to knowledge and its assimilation capabilities, whereas RACAP facilitates knowledge transformation and exploitation.
In this view, superior ACAP, in conjunction with its two dimensions of PACAP and RACAP, refers to an enterprise’s ability of acting in a superior ambidextrous manner. Acting in a superior ambidextrous manner refers to the idiosyncratic ability to effectively manage internal organisational exploration and exploitation activities that leads to aiding the likelihood of realising the successful enhancement of an enterprise’s sustained entrepreneurial growth endeavours. This critical outcome is further ascertained in the event that an enterprise possess the ability to act in a superior ambidextrous manner by focusing on attaining combined ambidextrous outputs, as opposed to predominantly optimal ambidextrous outputs. Combined ambidextrous outputs refer to the combination of high levels of both exploration and exploitation activities (Bednarek et al., 2016; D’Souza et al., 2017; Goel & Jones, 2016; Junni et al., 2013; Moss et al., 2014; Simsek; Solís-Molinaa-2018). Conversely, optimal ambidextrous outputs refer to obtaining an optimal ratio between exploration and exploitation activities, and thus, does not particularly guaranteed the likelihood of realising the successful enhancement of an enterprise’s sustained entrepreneurial growth endeavours (De Massis et al., 2018; Junni et al., 2013; Kammerlander et al., 2015; Kauppila, 2010; Parida, et al., 2016; Simsek, 2009).
Within this line of enquiry, an increasing consensus posits that those enterprises that are able to forge superior ACAP are likely to excel at effectively managing newly accessed tacit and explicit knowledge resources from their functional-level alliance portfolio partners. This novelty is therefore likely to enable such enterprises to outperform their industry counterparts/competitors in successfully enhancing sustained entrepreneurial growth. Relating this dynamic interplay to the context of this study – E.F.SMEs, evidence suggests that owing to the seemingly inimitable intangible resources (i.e., robust organisational social capital [R.OSC]) that these enterprises tend to possess, it is likely that their ability to forge superior ACAP would be further buttressed. R.OSC refers to the well-established goodwill and resources (particularly knowledge) that E.F.SMEs gain from engaging in cordial relationships both internally within the organisation and externally with other enterprises. Of importance, R.OSC dimensions pertaining to managerial human capital and patient capital are adopted to more intrinsically inform this study’s prevailing novelties. Managerial human capital depicts the skills and knowledge repertoire of a focal E.F.SME’s top management team (i.e., long-serving family CEOs, together with their non-family senior functional-level managers), as shaped by their educational, personal, and professional experiences. Correspondingly, patient capital entails a deliberate preference for unusual and notably extensive long-term oriented investments (usually lasting several decades) with the desire to perpetuate vibrant businesses across several generations. Under these peculiar circumstances, establishing R.OSC would heighten the likelihood of E.F.SMEs to develop substantive effective management regimes.
The development of substantive effective management regimes is in this sense cultivated owing to the long-serving family CEOs deep tacit familiarity of the enterprise’s core competencies in relation to ascertaining the likelihood of achieving sustained entrepreneurial growth. As such, these executives are usually more adept at adequately socialising their non-family senior functional-level managers into the enterprise – in comparison to their rivals. As a consequence, overall tacit family CEOs and non-family senior functional-level managers team know-how would likely be preserved within the enterprise for a prolonged period of time – resulting in heightened positive team dynamics. In this way, coupled with their pervasive flat organisational structures, these enterprises are likely to be in an auspicious capacity of effectively managing their accessed new tacit and explicit knowledge resources derived from their varied alliance portfolio partners. Of essence, flat organisational structures epitomise organisations that are structured in a less bureaucratic manner, and hence, emphasise employee unanimity in task execution. This disposition therefore results in a better-trained and highly motivated workforce that is more productive and performs broader arrays of tasks – with minimised supervision.
Subsequently, a focal E.F.SME would be able to leverage its patient capital to ensure the likelihood of successfully enhancing sustained entrepreneurial growth. Following these developments, R.OSC, in light of its managerial human capital and patient capital dimensions – would act as a key underlying foundational isolating mechanism for building an idiosyncratic enterprise-level micro-foundation of dynamic alliance portfolio management capabilities. This developed idiosyncrasy, as earlier postulated, is herein representative of superior ACAP, whereby E.F.SMEs tend to amplify the effective management of the accessed new tacit and explicit knowledge resources derived from their varied alliance portfolio partners.Being able to more effectively manage both new tacit and explicit knowledge resources endows these enterprises with the ability to act in a superior ambidextrous fashion. As aforementioned, acting in a superior ambidextrous fashion is an elusive critical organisational trait, in this regard as relates to the tactful combination of internal organisational exploration and exploitation activities.
In particular, this development entails the possible attainment of combined ambidextrous outputs, as opposed to optimal ambidextrous outputs (De Massis et al., 2018; Junni et al., 2013; Kammerlander et al., 2015; Kauppila, 2010; Parida, et al., 2016; Simsek, 2009). Hence, E.F.SMEs tend to strategically leverage the newly accessed market and technological knowledge resources (in tacit and explicit form) to introduce innovative products to meet commercial-ends. This inclination may thereby contribute towards assisting these enterprises to outperform both their peers and industry counterparts/competitors – in successfully enhancing sustained entrepreneurial growth. Comperehsively, it would seem that these enterprises are adept at facilitating peculiar endogenous entrepreneurial process that seemingly build dynamic alliance portfolio management capbilities. This peculiarity has been likened to the ever elusive possession of higher-order capabilities by a certain pedigree of enterprises, in this view, as relates to E.F.SMEs . Representatively, and as it has hitherto been explicated, higher-order capabilities refer to the ability of an enterprise to effectively leverage alliance portfolio know-how. This trait, hence, aids in modifying and/or improving operational alliance portfolio management skills and thereby reinforces this distinctive acumen that in turn enhances overall alliance portfolio success. Conversely, lower-order capabilities refer to an enterprise’s basic skills in managing inherent aspects of alliance portfolios and thus, account for the bare minimum operational skills required for managing alliance portfolios.
In the following, a more elaborate delineation of these pertinent endogenous entrepreneurial processes involved in building enterprise-level micro-foundations of dynamic alliance portfolio management capabilities that heterogeneously enhance sustained entrepreneurial growth in E.F.SMEs are explicated, respectively.
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