In her study Applicability of the Resource-Based and Dynamic-Capability Views Under Environmental Volatility, Lei-Yu Wu aimed to test the validity of the hypothesis that: “A highly volatile environment does not weaken the positive relationship between firm dynamic capabilities and competitive advantage” (28). The deployed methodological approach was concerned with asking 2000 of the randomly selected CEOs from firms in Taiwan to fill out a questionnaire (containing questions, related to the tested hypothesis), and analyzing the obtained 253 valid responses. The analysis’s focal point was to determine the discursive acuteness of the following factors (variables), within the context of how the sampled respondents usually go about ensuring the commercial successfulness of the affiliated organizations: resources, environmental volatility, dynamic capabilities, and competitive advantages. The instrument of the obtained data’s quantification was a 7-point Likert scale.
In the aftermath of having conducted the study’s empirical and analytical phases, Lei-Yu Wu determined that a particular organization’s ability to address competitive challenges, by the mean of relying on its well-established access to the rare, inimitable, and non-substitutable resources, negatively relates to the measure of the affiliated environment’s volatility. As the author pointed out: “In highly volatile environments, the effects of resource accumulation on gaining competitive advantages are considerably reduced” (31). Hence, the study’s foremost conclusion – one of the main keys to ensuring that a particular firm would be able to maintain its competitive edge in the highly volatile environment, is increasing the extent of this firm’s dynamic capability.
Even though the study by Lei-Yu Wu can indeed be referred to as being rather enlightening, in the discursive sense of this word, there are several limitations to it, which in turn undermine the provided conclusion’s legitimacy rather substantially. These limitations can be outlined as follows:
- In her study, the author does not provide readers with analytical insight into the phenomenological/qualitative subtleties of the researched subject matter. That is, no answer has been given, as to what creates the situation when it is specifically the operationally flexible/dynamic organizations, which appear to be much less resource-dependent, as compared to what is being the case with the conventionally functioning ones.
- There is a good reason to believe that the factor of perceptual/cognitive biases played a significant role, within the context of how the sampled respondents proceeded with filling out a questionnaire. This, of course, does not allow us to refer to the study’s conclusion; as such, that presents an undisputed truth-value.
- The fact that there were only 253 filled out questionnaires collected (out of the initially distributed 2000) reduces the measure of the study’s cross-sectional effectuation. The same can be said about the effects of the study’s spatial particulars (the sampled CEOs were exclusively Taiwanese).
- The fact that the study in question contains several terms that can be vaguely interpreted, such as the “fresh value-creating strategy” (27). In its turn, this negatively affects the clarity of the deployed line of argumentation, on the author’s part.
As the study’s apparent strength, we can well mention the fact that it establishes an interdisciplinary ground for researchers to tackle the concerned subject matter from a variety of different perspectives (such as the sociological and psychological ones). The validity of this statement can be illustrated, in regards to the assumption (shared by many researchers) that the very notion of a dynamic capability needs to be discussed in close conjunction with the notion of human resources.
Works Cited
Wu, Lei-Yu. “Applicability of the Resource-Based and Dynamic-Capability Views under Environmental Volatility.” Journal of Business Research 63 (2010): 27–31. Print.