Microfoundations of Knowledge-Based Dynamic Capabilities

Abstract

Although knowledge-based dynamic capabilities literature argues that dynamic capabilities foster knowledge management activities, it does not explain how such fostering occurs. To answer this question, this study focuses on dynamic managerial capabilities, applying microfoundational analysis at the individual level to improve understanding of organizational phenomena. It focuses on three dimensions of dynamic managerial capabilities: the managerial abilities of sensing, seizing, and transforming; the psychological abilities of intuition and emotion; and the managerial characteristics of human capital, social capital, and cognition. The study makes three contributions. First, it shows that the microfoundations of dynamic capabilities generate knowledge management activities. Second, it demonstrates the link between managers’ psychological abilities (intuition, emotion) and knowledge management activities. Third, it describes the role of sensing, seizing, and transforming in knowledge management activities.