Creating Organizational Capability in New Businesses: Building Sets of Complementary Capabilities

Recent research into the development of organizational capability, has focused either upon particular aspects of the development process (e.g. learning, routinization, heuristics, bricolage) or on individual capabilities (e.g. new product development, project management, internationalization, acquisitions). Limited attention has been given to how firms create new systems of capabilities despite the fact that commercial viability requires firms to master multiple, complementary capabilities. Recent emphasis on the firm as a configuration of interdependent, complementary activities reinforces the view that the central management challenge for launching successful new business ventures is building an integrated system of capabilities. Through in-depth studies of four new e-commerce businesses, we tracked the creation and development of new systems of organizational capabilities, identifying commonalities in this process despite differences in firm type and sector. Our findings augment the existing literature by offering deeper and more detailed insight into the main components of the capability development. We identified a management-led process of capability building in which initial strategic intent was translated into capability architecture—an envisaging of the required functionality of the business both at systemic and component levels. Operationalizing capability architecture required the sourcing of relevant knowledge, the translation of capability architecture into organizational structure, and the establishment and development of organizational processes through patterns of routinization and codification. Creating Organizational Capability in New Businesses: Building Sets of Complementary Capabilities