Capabilities, recipes, & firm performance: how industry recipes influence the application of dynamic managerial capabilities
Bezjian, James Bradley
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Dynamic managerial capabilities are frequently viewed as a source of influence among decision-making managers within environments of volatility. Conversely, managers postulate that decision-making in rapidly changing environments is never perfect and faces a variety of influencing factors. In addition, industries represent a collection of firms that produce similar goods or services for a particular market. This recipe is often recognized by all industry related firms and adapted accordingly. Similarly, firms comprised as “incumbents” and “challengers” are firms that are well established in the industry and firms that seek to change the industry. Recognizing which influencers affect the managerial decision-making process is necessary to adapt and evolve a firm’s decision-making logic. This thesis presents a detailed study of the Hollywood Film Industry Recipe as it relates to the influencing factors within the green lighting process of feature films among incumbent and challenger studios. An inductive research approach is used to investigate four case studies throughout the Hollywood Film Industry. Two case studies are recognized as industry incumbents while the other two are recognized as industry challengers. The analysis identifies an industry recipe, firm adopted industry and adaptations, and dynamic managerial capabilities utilized through the influence of the process. In addition, an illustration of the industry recipes influence dynamic managerial capabilities adopted by firms. Findings suggest that dynamic managerial capabilities is an output of industry recipes adopted amongst firms, and that refinement of those capabilities is a circular renewal process between managerial judgement and firm/managerial dominant logics. In addition, industry recipes influence the way in which dynamic managerial capabilities are acquired, processed, and absorbed. This study contributes to the field of strategy as it suggests a coherent framework that illustrates how industry recipes influence incumbent and challenger studios within a given industry. Additionally, it also demonstrates how dynamic managerial capabilities are formed and structured based on the adopted industry recipe. Finally, it outlines how decisions are made by managers within incumbent and challenger firms, highlighting a circular process of decision-making with regards to the creation an distribution of an industry related product.