SP

Made popular among organizations in the 1950s and 1960s, SP is the periodic process in which strategic investment priorities and the use of resources are systematized and formalized (Grant, Reference Grant2003). SP starts from a rational vision of the threats and opportunities of an organization, formalizing it to standardize information and strategies and concretizing the way to achieve objectives (Arend et al., Reference Arend, Zhao, Song and Im2017; Globocnik, Faullant, & Parastuty, Reference Globocnik, Faullant and Parastuty2020). In practice, SP includes the organization's mission, the analysis of the internal and external environment perception, the strategies to be adopted, the objectives in the period and the action plans (George, Walker, & Monster, Reference George, Walker and Monster2019; Wolf & Floyd, Reference Wolf and Floyd2017).

SP routinizes processes of the formulation, implementation and control of strategy, signalling to the operational environments the activities and resources needed to fulfil an organization's mission and achieve the planned objectives (Globocnik, Faullant, & Parastuty, Reference Globocnik, Faullant and Parastuty2020). Accordingly, SP acts as a coordinator and integrator of resources and processes with the aim of generating better performance (Wolf & Floyd, Reference Wolf and Floyd2017).

However, the positive impacts of SP on performance found in some studies have been criticized for the loss of innovation in the name of efficiency. From this perspective, the processes and routines implemented become a rigid structure that stifles new strategic thinking and makes them difficult to adapt (Arend et al., Reference Arend, Zhao, Song and Im2017; George, Walker, & Monster, Reference George, Walker and Monster2019). Strategy innovation and adaptation are essential in uncertain and rapidly changing environments, in which organizations are currently. SP advocates argue there can be planned flexibility; some level of innovation and adaptation can be achieved without abandoning efficiency and formalization (Dibrell, Craig, & Neubaum, Reference Dibrell, Craig and Neubaum2014; Grant, Reference Grant2003). Both the relationship of SP to performance and the development of this dynamic SP are signalled as relevant research gaps (Hughes & Hodgkinson, Reference Hughes and Hodgkinson2020; Rau, Flores, & Simha, Reference Rau, Flores and Simha2021).

DCs

Identified In 1997, DCs are defined as ‘the potential to systematically solve problems, enabled by its propensity to sense opportunities and threats, to make timely decisions, and to implement strategic decisions and changes efficiently, thereby ensuring the right direction’ (Ferreira, Coelho, & Moutinho, Reference Ferreira, Coelho and Moutinho2020: 1). DC studies come from at least two different epistemological roots, generating different understandings of the concept and different expectations about their contribution to organizations (Arndt & Bach, Reference Arndt and Bach2015).

From the perspective of the evolutionary school, DCs are positioned at the level of competitive strategy, seeking to challenge competitors through innovation to achieve better performance and a better position in the market. From the perspective of the behavioural school, DCs are positioned as best practices and simple rules that operationalize broader and general objectives (e.g., growth or learning), seeking to adapt an organization to the market (Arndt & Pierce, Reference Arndt and Pierce2018; Di Stefano, Peteraf, & Verona, Reference Di Stefano, Peteraf and Verona2014).

The evolutionary school of DCs is linked to the work of Teece, Pisano, and Shuen (Reference Teece, Pisano and Shuen1997), while the behavioural school is linked to the work of Eisenhardt and Martin (Reference Eisenhardt and Martin2000) as one of the most influential. This theoretical effort concurs with Di Stefano, Peteraf, and Verona (Reference Di Stefano, Peteraf and Verona2014) and considers that the two schools represent different but complementary levels of action. However, by discussing the consequences of DCs on performance and competitive strategy, considering the heterogeneity of resources and problemistic search, this study is more in line with the evolutionary school of DCs (Arndt & Pierce, Reference Arndt and Pierce2018).

From this literature stream, DCs rest in the processes of sensing, seizing and transforming, which are translated into routines of integration and coordination of activities and technologies (Teece, Reference Teece2007; Teece, Pisano, & Shuen, Reference Teece, Pisano and Shuen1997). Recognizing changes in the environment and detecting new opportunities and threats make up sensing, which includes routines for acquiring new knowledge about customers, competitors, suppliers and new market scenarios. Once an opportunity or threat is identified, the seizing process changes ordinary capabilities, products, processes and business models, mobilizing resources to exploit the opportunity or protect an organization from the threat. Finally, transformation means reconfiguring resources and capabilities continuously to support the adaptation between the external environment and the enterprise; it concerns strategic decision-making, learning and the model of governance of results (Enkel & Sagmeister, Reference Enkel and Sagmeister2020; Mousavi, Bossink, & van Vliet, Reference Mousavi, Bossink and van Vliet2018; Teece, Reference Teece2007). The several routines and processes that make up sensing, seizing and transforming are called microfoundations (Teece, Reference Teece2007).

Because they are considered higher-order capabilities, DCs adjust ordinary capabilities, processes and internal routines to meet market demands, generating an indirect impact on performance (Biesenthal, Gudergan, & Ambrosini, Reference Biesenthal, Gudergan and Ambrosini2019; Qaiyum & Wang, Reference Qaiyum and Wang2018; Ringov, Reference Ringov2017; Schriber & Löwstedt, Reference Schriber and Löwstedt2020). Ordinary capabilities, also called substantive or operational capabilities, are the capabilities used to carry out day-to-day operational and routine activities of organizations (Biesenthal, Gudergan, & Ambrosini, Reference Biesenthal, Gudergan and Ambrosini2019; Schriber & Löwstedt, Reference Schriber and Löwstedt2020; Zahra, Sapienza, & Davidsson, Reference Zahra, Sapienza and Davidsson2006).

From the moment they are created, DCs begin a life cycle and mature over time, being impacted by resource orchestration, knowledge acquisition and learning (Bitencourt et al., Reference Bitencourt, de Oliveira Santini, Ladeira, Santos and Teixeira2020; Tran, Zahra, & Hughes, Reference Tran, Zahra and Hughes2019; Wilden, Gudergan, & Lings, Reference Wilden, Gudergan and Lings2019). These factors, together with perceptions of the external environment and decisions made in the past, form the knowledge base necessary for DCs to evolve, impact ordinary capabilities and transform themselves (Biesenthal, Gudergan, & Ambrosini, Reference Biesenthal, Gudergan and Ambrosini2019; Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014; Haarhaus & Liening, Reference Haarhaus and Liening2020).

The literature has gaps in the nature, antecedents and consequences of DCs (Haarhaus & Liening, Reference Haarhaus and Liening2020). There is a lack of understanding of how DCs are developed (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014; Haarhaus & Liening, Reference Haarhaus and Liening2020; Tran, Zahra, & Hughes, Reference Tran, Zahra and Hughes2019), as well as of their impacts on innovation (Froehlich, Bitencourt, & Bossle, Reference Froehlich, Bitencourt and Bossle2017) and performance (Ferreira, Coelho, & Moutinho, Reference Ferreira, Coelho and Moutinho2020; Wibbens, Reference Wibbens2019). Little is known about how performance interacts with DCs over time (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014).

SP as one of the microfoundations of DCs

Some studies have already considered SP as a part of DCs. De Guimarães et al. (Reference De Guimarães, Odelius, Medeiros and Vargas Santana2011) positioned SP as part of search routines – those that seek external changes to reconfigure resources internally. Biesenthal, Gudergan, and Ambrosini (Reference Biesenthal, Gudergan and Ambrosini2019), in turn, discussed the role of routines that influence behaviours and courses of organizational actions in the reconfiguration of ordinary capabilities by DCs. SP could be considered one of these routines because it integrates resources and outlines action plans to achieve strategic goals (George, Walker, & Monster, Reference George, Walker and Monster2019; Wolf & Floyd, Reference Wolf and Floyd2017). Finally, Andersen and Nielsen (Reference Andersen and Nielsen2009) outlined that SP integrates DCs' efforts to make a performance impact.

Teece (Reference Teece2007), one of the seminal and most influential authors on DCs, mentioned organizational processes that support the seizing of opportunities and the continuous alignment and realignment of assets as the microfoundations of DCs. This paper argues that one of these processes, perhaps the most important of them for its diffusion in the corporate world, is SP.

Organizational strategy has an interpretative and subjective component, and the processes and capabilities involved can range from clearly defined issues to broader, ambiguous and fluid issues (Dutton & Duncan, Reference Dutton and Duncan1987). From this perspective, there is one part that can be easily translated into processes and routines, but there is also another that demands intuition, art, creativity and flexibility to think beyond the box. As Mintzberg (Reference Mintzberg1994: 112) wrote, ‘Sometimes strategies must be left as broad visions, not precisely articulated, to adapt to a changing environment’.

The DC approach seems to embrace this ambiguity. Teece, Peteraf, and Leih (Reference Teece, Peteraf and Leih2016) mentioned that processes and routines are an essential aspect of DCs but that strong DCs are not based entirely on them. There is a mixture of art and intuition, science and analysis in the detection and diagnosis of organizational environments and strategy formulation (Dutton & Duncan, Reference Dutton and Duncan1987; Teece, Reference Teece2018). Due to its rationality and control characteristics, SP – as one of the microfoundations of DCs – acts not only in the science and analysis of strategy results but also in the execution and feedback (Pasha & Poister, Reference Pasha and Poister2017).

As a simplification of more complex thinking, SP is indispensable for good implementation (Gagné, Reference Gagné2018), even under strong environmental uncertainties (Batra et al., Reference Batra, Sharma, Dixit and Vohra2018; Pasha & Poister, Reference Pasha and Poister2017). SP synthesizes and clarifies the critical information that needs to be considered. SP standardizes understandings and directs the objectives that guide performance (Dutton & Duncan, Reference Dutton and Duncan1987) and decision-making (Posch & Garaus, Reference Posch and Garaus2020). Conversely, because it is procedural and based on clearly articulated and delimited information, SP per se is insufficient to perceive and diagnose the external environment and choose the best opportunity to be explored (Teece, Reference Teece2018). SP indicates what will be done and how an opportunity should be seized (Ojha, Patel, & Sridharan, Reference Ojha, Patel and Sridharan2020); the other microfoundations of DCs come first, working on the search, diagnosis and characterization of which opportunities are among the possible alternatives and which should be pursued.

As part of DCs, SP and DCs complement each other – impacting performance and generating learning and new DCs over time in a virtuous and mutually reinforcing cycle, as shown in Figure 2.

Figure 2.

A virtuous and mutually reinforcing cycle between dynamic capabilities and strategic planning.

The framework consists of three propositions and considers the theme from the main components of performance: formulation of the strategy, measurement of performance and the use of performance information to make decisions (Pasha & Poister, Reference Pasha and Poister2017). Each proposition is further discussed in the other sections.

Formulating the strategy

The complementary relationship between SP and DCs begins with the other microfoundations performing what some authors call problemistic search (Posen, Keil, Kim, & Meissner, Reference Posen, Keil, Kim and Meissner2018). It is a scanning of the external environment to find opportunities that, when exploited by the organization, would result in improvements of performance and competitiveness. The problemistic search, within the DC approach, considers the Schumpeterian idea of innovation, using the heterogeneity of resources to exploit opportunities that other competitors have not yet explored or recognized (Arndt & Pierce, Reference Arndt and Pierce2018).

The literature highlights that since the first studies on competitive advantage, environmental analysis tools have been used to substantiate decisions routinized by SP, such as the analysis of the Porter's five forces (Sunder, Ganesh, & Marathe, Reference Sunder, Ganesh and Marathe2019). What is argued here is that this information now comes from other DC routines since SP, by its own more formal and procedural nature, creates rigidities and inflexibilities for the entry of new knowledge (Arend et al., Reference Arend, Zhao, Song and Im2017; Dibrell, Craig, & Neubaum, Reference Dibrell, Craig and Neubaum2014). With an obstacle to the absorption of new knowledge, the adaptation or innovation required to exploit an opportunity becomes more difficult (Posch & Garaus, Reference Posch and Garaus2020). In more stable sectors, the lack of new knowledge does not seem to pose substantial problems, but in the face of rapid change, the absorption and integration of new knowledge becomes imperative (Li & Liu, Reference Li and Liu2014).

Faced with uncertainty and rapid changes in the environment, organizations plan more (Brews & Purohit, Reference Brews and Purohit2007), but the effectiveness and perceived value of the plan decreases (Dibrell, Craig, & Neubaum, Reference Dibrell, Craig and Neubaum2014). One reason for this may be the knowledge itself – which, once received and used, also becomes rigid if not constantly updated (Nieves & Haller, Reference Nieves and Haller2014).

Analysing SP as one of the microfoundations of DCs and not a DC specifically could give a little more autonomy for other microfoundations to perform the periodic search for new knowledge, especially because new and valuable knowledge increasingly seems to be outside organizational boundaries (Enkel & Sagmeister, Reference Enkel and Sagmeister2020; Haim Faridian & Neubaum, Reference Haim Faridian and Neubaum2020). The process of learning and integrating knowledge into the enterprise occurs through a series of conflicts and social and cognitive interactions (Tran, Zahra, & Hughes, Reference Tran, Zahra and Hughes2019) that is difficult to be completely controlled by planning. Moreover, the knowledge learned alone, although indispensable, is insufficient to adapt to the environment or exploit opportunities (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014); it is important to perform the problematic search.

Going beyond the periodic absorption of new knowledge, DCs could direct SP towards innovation. On the one hand, critics believe that SP restricts creativity by making insufficiently adaptable plans for innovations that have not yet been tried based on the limited recognition of the external environment (Posch & Garaus, Reference Posch and Garaus2020). On the other hand, defenders see SP as a framework for innovation (Batra et al., Reference Batra, Sharma, Dixit and Vohra2018). From both angles, other microfoundations of DCs could support SP in the search and implementation of innovations, especially by improving sensing routines (Froehlich, Bitencourt, & Bossle, Reference Froehlich, Bitencourt and Bossle2017).

Whereas DCs need a process to support seizing opportunities and continually reconfiguring resources to implement innovation or other strategic intents (Teece, Reference Teece2007), SP can be this process by which the reconfiguration takes place. Other microfoundations of DCs contribute to SP with a problemistic search and absorption of new knowledge.

An active search for new opportunities in the external environment and a periodic absorption of new knowledge can result in better detection and interpretation of the external environment. With a better perception of the environment as a starting point, SP can be used more efficiently to achieve strategic demands (Ojha, Patel, & Sridharan, Reference Ojha, Patel and Sridharan2020; Rudd, Greenley, Beatson, & Lings, Reference Rudd, Greenley, Beatson and Lings2008). With a more aligned SP, an organization can become more competitive by orchestrating its assets and coordinating its activities in a way to better adapt to the external environment or explore new opportunities (Teece, Reference Teece2018).

The following proposition is outlined for future research:

Measuring performance

Researchers argue that performance improvements substantially depend on the ability to adapt and exploit new opportunities in an increasingly uncertain and complex market (Arndt & Pierce, Reference Arndt and Pierce2018). From this perspective, both DCs and SP play an essential role that requires further clarification (Arend et al., Reference Arend, Zhao, Song and Im2017; Jantunen, Tarkiainen, Chari, & Oghazi, Reference Jantunen, Tarkiainen, Chari and Oghazi2018; Rau, Flores, & Simha, Reference Rau, Flores and Simha2021; Ringov, Reference Ringov2017; Rudd et al., Reference Rudd, Greenley, Beatson and Lings2008). This paper argues that SP can reflect other microfoundations of DCs (especially sensing) in the reconfiguration of capabilities, processes, resources and assets. In doing so, SP cooperates with other microfoundations to jointly impact performance. SP becomes a process that formalizes the demands of the external environment that have been perceived and interpreted through other microfoundations of DCs. SP creates conditions for ordinary capabilities to develop and impact performance.

Ouakouak (Reference Ouakouak2018) argued that SP that considers more rational elements together with more adaptive ones can provide opportunities for the learning, environmental adaptation, flexibility and efficiency necessary to develop organizational capabilities (both ordinary and dynamic). In this line, Andersen and Nielsen (Reference Andersen and Nielsen2009) argued that SP creates integrative capabilities that benefit an organization and promote its growth. By signalling to operational environments the activities and resources necessary to implement a strategy, SP is able to orchestrate resources and processes to ensure the development of capabilities (Globocnik, Faullant, & Parastuty, Reference Globocnik, Faullant and Parastuty2020; Wolf & Floyd, Reference Wolf and Floyd2017).

Beyond that, ordinary capabilities would be adapted and supported by DCs as a whole (including SP) because they are endogenously reconfigured by DCs (Biesenthal, Gudergan, & Ambrosini, Reference Biesenthal, Gudergan and Ambrosini2019; Schriber & Löwstedt, Reference Schriber and Löwstedt2020). This alignment between the microfoundations of DCs impacts performance (Ojha, Patel, & Sridharan, Reference Ojha, Patel and Sridharan2020; Ouakouak, Reference Ouakouak2018; Wibbens, Reference Wibbens2019). Here, ordinary capabilities are also considered one of the microfoundations of DCs because they are essential for the sensing, seizing and transformation processes to occur (Teece, Reference Teece2007).

A study argued that DC demands need to be simplified and routinized before they are put into practice (Li, Easterby-Smith, & Hong, Reference Li, Easterby-Smith and Hong2019). The researchers argued that the process of interpreting the external environment is complex and integrates various types of knowledge. Hence, the process requires a translation to be performed, orchestrating resources and capabilities to reflect the DC guidelines. Thus, SP would be responsible for translating the DC demands and formally assigning responsibilities and resources for the respective activities (Arend et al., Reference Arend, Zhao, Song and Im2017). SP would be the link between the formulation of the strategy and its implementation, maintaining the search for its characteristic efficiency (Gagné, Reference Gagné2018). However, it would also search for flexibility to accommodate emerging changes and support the exploitation of unanticipated opportunities (Ojha, Patel, & Sridharan, Reference Ojha, Patel and Sridharan2020). SP signals how resources can be employed most efficiently (Schriber & Löwstedt, Reference Schriber and Löwstedt2020), monitors results in uncertain times and makes functional predictions, generating valuable insights to be used by other microfoundations of DCs (Haarhaus & Liening, Reference Haarhaus and Liening2020; Pulsiri & Vatananan-Thesenvitz, Reference Pulsiri, Vatananan-Thesenvitz, Kocaoglu, Anderson, Kozanoglu, Niwa, Steenhuis and Perman2018). From the flexibility side, knowledge and learning, here coming from other microfoundations, can ensure SP dynamism in the face of emerging demands (Hughes & Hodgkinson, Reference Hughes and Hodgkinson2020).

The alignment between the microfoundations of DCs (including SP) can support the results of DCs regarding performance as well as boost those results by reconfiguring ordinary capabilities (Andersen & Nielsen, Reference Andersen and Nielsen2009; Ouakouak, Reference Ouakouak2018), providing competitive advantages in the short and long term (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014). This is explicit in the proposition below.

Using performance and SP information: a virtuous and mutually reinforcing cycle

In the last two sections, it was argued that other microfoundations of DCs and SP act in an aligned way to periodically absorb new knowledge and actively search for new opportunities in the external environment, improving the perception of the environment. SP, in turn, formalizes and operationalizes the demands of the other microfoundations – reflecting them in the reconfiguration of ordinary capabilities, which can generate an impact on organizational performance. In this section, it is argued that SP and performance play a role in the development of DCs as a whole – forming a virtuous and mutually reinforcing cycle.

The starting point of the framework presented (Figure 2) is the other microfoundations of DCs performing the acquisition of new knowledge and the problemistic search for new opportunities that could be explored. The problemistic search assumes learning from the results of the strategies regarding performance (Posen et al., Reference Posen, Keil, Kim and Meissner2018). If performance is below expectations, new interventions are required to improve the outcome. From this perspective, performance is able to measure the effectiveness and performance of DCs as a whole and SP over a period, as it does with the business model of organizations (Teece, Reference Teece2018).

The DC literature not only highlights the need to measure the impacts of DCs (Ferreira, Coelho, & Moutinho, Reference Ferreira, Coelho and Moutinho2020; Pezeshkan et al., Reference Pezeshkan, Fainshmidt, Nair, Lance Frazier and Markowski2016; Wibbens, Reference Wibbens2019) but also emphasizes the difficulty in separating these impacts from those of ordinary capabilities and other resources (Qaiyum & Wang, Reference Qaiyum and Wang2018). The challenge of measuring the impact of DCs on performance becomes even greater because several factors can interfere in this relationship. Previous studies have found variations in the relationship between DCs and performance, depending on the type and pervasiveness of strategic change (Girod & Whittington, Reference Girod and Whittington2017), the internal characteristics of the organization (e.g., size, age, managerial positions and geographical location; Bitencourt et al., Reference Bitencourt, de Oliveira Santini, Ladeira, Santos and Teixeira2020; Jantunen et al., Reference Jantunen, Tarkiainen, Chari and Oghazi2018; Qaiyum & Wang, Reference Qaiyum and Wang2018), the methods used to measure performance (Pezeshkan et al., Reference Pezeshkan, Fainshmidt, Nair, Lance Frazier and Markowski2016), the exposure to environmental dynamics and the complexity of the resource base (Ringov, Reference Ringov2017).

SP could form an analysis framework – where low performance results could signal, for example, that a DC is not yet suitable for an organization's context, that conditions are lacking for ordinary capabilities to develop (Ouakouak, Reference Ouakouak2018) or even that the microfoundations of DCs used to adapt and reconfigure ordinary capabilities do not reflect DC demands (Biesenthal, Gudergan, & Ambrosini, Reference Biesenthal, Gudergan and Ambrosini2019; Schriber & Löwstedt, Reference Schriber and Löwstedt2020). Each of these findings can generate a set of corrective actions, aiming to improve performance in the next period.

Over time, SP can refine itself and improve DCs as a whole based on the performance measurement information. SP itself can be improved due to its past performance and other aspects of organizational memory (Hughes & Hodgkinson, Reference Hughes and Hodgkinson2020). The results of the previous strategies are part of the path dependence envisaged in the first definition of DCs in 1997 (Teece, Pisano, & Shuen, Reference Teece, Pisano and Shuen1997). Suddaby, Coraiola, Harvey, and Foster (Reference Suddaby, Coraiola, Harvey and Foster2020) updated the importance of the path: ‘The capacity to manage the interpretation of the past, in the present for the future, is a critical ability that informs a firm's ability to successfully enact changes needed to adapt to disruptive technology’ (p. 530).

The historical knowledge gained from DCs as a whole and SP evolutions themselves, together with their results obtained in performance, are part of the knowledge base where new capabilities, both dynamic and ordinary, emerge (Enkel & Sagmeister, Reference Enkel and Sagmeister2020; Zollo & Winter, Reference Zollo and Winter2002). From this perspective, SP is influenced by established knowledge routines as well as influences how new knowledge is achieved or acquired and transformed into products, processes or even capability innovations (Arend et al., Reference Arend, Zhao, Song and Im2017). To Ojha, Patel, and Sridharan (Reference Ojha, Patel and Sridharan2020), an overly misaligned or rigid SP becomes a bottleneck for the application of DCs, making them less effective. Thus, SP is contained in the interactive learning factors that lead to a new capability (Tran, Zahra, & Hughes, Reference Tran, Zahra and Hughes2019), considerably delimiting the creation and development of DCs. From this viewpoint, DCs can also be a result of SP, as argued by Wolf and Floyd (Reference Wolf and Floyd2017). However, considering SP as one of the microfoundations of DCs, the contribution of SP is not limited to the creation and development of some DCs but permeates them all.

SP can anticipate and secure investments to ensure the effectiveness and dynamism of DCs (Schreyögg & Kliesch-Eberl, Reference Schreyögg and Kliesch-Eberl2007; Zahra, Sapienza, & Davidsson, Reference Zahra, Sapienza and Davidsson2006) – especially research and development, which constitute a relevant source of new capability (Enkel & Sagmeister, Reference Enkel and Sagmeister2020). When aligned with other microfoundations of DCs, SP can also help in the reflexive monitoring that must accompany the evolution of DCs, suggested by Schreyögg and Kliesch-Eberl (Reference Schreyögg and Kliesch-Eberl2007), so that the development flow of DCs does not dissolve the strategic intent or stiffen an organization, keeping DCs up to date and flexible. SP, together with performance information over time, can signal when capability needs to be created, better developed or inactivated (Helfat & Peteraf, Reference Helfat and Peteraf2003).

The reconfiguring influences new sensing and seizing processes, and so on (Mousavi, Bossink, & van Vliet, Reference Mousavi, Bossink and van Vliet2018). Therefore, when SP executes seizing and reconfiguring, it influences the generation of learning for new DCs in a cycle that mutually reinforces itself (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014). The realization of seizing and reconfiguring through SP feeds back into the new DCs. Within this cycle is also the feedback of performance information as a way of evaluating the feasibility of some strategies (Teece, Reference Teece2018) and reviewing capabilities, objectives, processes and activities (Pasha & Poister, Reference Pasha and Poister2017). As it aims to adapt and improve the competitiveness of organizations, this cycle can be considered virtuous, in line with Dixon, Meyer, and Day (Reference Dixon, Meyer and Day2014) study about building DCs.

Considering the arguments presented, the final proposition of this study is detailed below.

Theoretical implications

This study has three main theoretical implications of how considering SP as one of the microfoundations of DCs can impact future research. First, this new perspective expands the contributions of SP to DCs as a whole and to performance. While SP was treated only as a specific DC, its contributions were limited to self-development to achieve better performance (Ojha, Patel, & Sridharan, Reference Ojha, Patel and Sridharan2020; Wibbens, Reference Wibbens2019), eventually generating new DCs as a distal result (Wolf & Floyd, Reference Wolf and Floyd2017). Instead, SP has an active and participative role in the creation, development and implementation of all DCs. SP formalizes resource demands, organizes activities, and provides conditions for ordinary capabilities to develop (Globocnik, Faullant, & Parastuty, Reference Globocnik, Faullant and Parastuty2020; Ouakouak, Reference Ouakouak2018), execute the strategy and generate higher performance.

Second, SP is now considered the bridge between strategy formulation and implementation (Gagné, Reference Gagné2018), becoming the mechanism by which DCs endogenously reconfigure ordinary capabilities (Biesenthal, Gudergan, & Ambrosini, Reference Biesenthal, Gudergan and Ambrosini2019; Schriber & Löwstedt, Reference Schriber and Löwstedt2020), and only then to obtain a result in performance. Thus, SP becomes one possible evidence to be analysed by researchers, having the potential to facilitate the empirical identification of DCs and strengthen its practical relevance – an aspect for which it has been strongly criticized (Ferreira, Coelho, & Moutinho, Reference Ferreira, Coelho and Moutinho2020). In SP research, the alignment of the two bodies of literature can revive researchers' interest, highlighting how SP incorporates environmental changes and then results in performance. The impact of environmental changes on SP has been considered a fruitful avenue for future studies (Wolf & Floyd, Reference Wolf and Floyd2017), and the still inconclusive link between SP and performance has been considered responsible for the dramatic drop in the academic discussions of the theme (Jarzabkowski & Balogun, Reference Jarzabkowski and Balogun2009).

Finally, previous information on SP and performance measurement has become more prominent because it is considered an input for the improvement of DCs as a whole and of SP in particular (Hughes & Hodgkinson, Reference Hughes and Hodgkinson2020), as well as the performance itself in a subsequent period. By implementing seizing and transforming and having performance measured, SP generates information that influences new sensing (Mousavi, Bossink, & van Vliet, Reference Mousavi, Bossink and van Vliet2018) and can create or develop new capabilities – both ordinary and dynamic (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014; Enkel & Sagmeister, Reference Enkel and Sagmeister2020; Zollo & Winter, Reference Zollo and Winter2002). This information can measure the effectiveness of DCs as a whole and an organization's previous trajectory, giving insights into strategies that may be more assertive in the future. Under this perspective, SP, over time, can reconstruct the trajectory of the organization, becoming useful in empirical investigations examining path dependence inside of the DC approach.

Practical implications

For practitioners, the discussions of this paper reinforce the importance of the processes that create SP and accompany its implementation. There are three main practical implications of this study. First, it reaffirms the importance of establishing and consolidating the routines of acquiring new knowledge (even from outside the organization), evaluating the external environment, and seeking new opportunities, creating conditions for DCs to be created and updated (Haarhaus & Liening, Reference Haarhaus and Liening2020; Tran, Zahra, & Hughes, Reference Tran, Zahra and Hughes2019). DCs can enable a more comprehensive view of the market, and through SP, they can more effectively guide decision-making in the organization, avoiding a blind search for efficiency in the present that can compromise profits in the long run.

Second, the study highlights the need for SP to be aligned with the routines of absorption of new knowledge and market perception in order to become more flexible and responsive. As argued by Ojha, Patel, and Sridharan (Reference Ojha, Patel and Sridharan2020), misaligned SP can make DCs less effective and decrease their performance. In this sense, practitioners need to assess whether SP supports and ensures the resources (e.g., financial and knowledge) necessary for capabilities – both dynamic and ordinary – to develop and generate a satisfactory result. SP can no longer be an obstacle to innovation (Arend et al., Reference Arend, Zhao, Song and Im2017); it has to be a means by which innovation happens more assertively (Batra et al., Reference Batra, Sharma, Dixit and Vohra2018; Gagné, Reference Gagné2018), enabling the identification and capture of opportunities.

Finally, the existence of a virtuous and mutually reinforcing cycle, which was argued in this study, denotes the need to use previous information – both from SP and performance measurement – to improve strategies and SP and, hence, increase subsequent performance (Dixon, Meyer, & Day, Reference Dixon, Meyer and Day2014; Posen et al., Reference Posen, Keil, Kim and Meissner2018; Teece, Reference Teece2018). By looking attentively and consciously at the past, it is possible to differentiate successful and unsuccessful strategies and contextualize their results, generating a pool of information that can be useful for a better interpretation of the market and the effectiveness of new strategies (Suddaby et al., Reference Suddaby, Coraiola, Harvey and Foster2020). Keeping this cycle in mind can help practitioners think about their results as part of a continuous flow, where understanding the reasons a strategy was unsuccessful can generate the learning needed for further success.