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apabilities are complex bundles of skills and knowl- ings gains generated through cost cutting and efficient
Other Factors
•Market versus efficiency performance
•Large versus small firms
•Subjective versus objective data
•Business-to-business versus business-to-consumer
•Manufacturing versus service business
•U.S. versus non-U.S. firms
•Strategic business unit versus firm level
•Multiple versus single industry
Capability Performance
In comparison, there is no overt pressure to codify the In effect, R&D capability and operations capability are
knowledge that supports marketing capability and to dis- relatively more susceptible to imitation and are relatively
close it in the public domain. Further adding to the mobility more mobile than marketing capability. This renders
of R&D capability is the idea that to reduce R&D competi- competitive advantage based on these capabilities more
tion that might otherwise make innovation too costly, firms prone to competitive interference than advantage based on
might even license their discoveries to rivals (Anand and marketing capability. However, note that though we argue
Khanna 2000). Overall, this argument suggests that R&D for the relatively stronger impact of marketing capability on
knowledge and processes are codified and shared to a performance, we are not decrying the importance of R&D
greater degree than the more tacitly held marketing knowl- capability and operations capability. There may be specific
edge and processes. Therefore, in general, R&D capability industries in which R&D capability and operations capabil-
is likely to be more imitable and mobile than marketing ity are more important than marketing capability. However,
capability. our hypotheses are based on general findings and not
Operations capability is frequently based on processes industry-specific or firm-specific findings. Our primary
that have been benchmarked and codified. For example, contention is that given the nature of the knowledge that
many firms have pursued total quality management and drives these capabilities, marketing capability typically
international standards organization programs to enhance leads to stronger performance than R&D capability and
quality and efficiency. Similarly, many firms have imple- operations capability.
mented business process reengineering to redesign business
H1: The capability–performance relationship is stronger for
systems and work flow and to employ information technol- marketing capability than for R&D capability.
ogy to enhance efficiency. The activities to be adopted by H2: The capability–performance relationship is stronger for
organizations that followed total quality management and marketing capability than for operations capability.
international standards organization programs are codified
and certified, as well as aided by consultants. For business Other Study Characteristics That Influence the
process reengineering, companies also take advantage of the Capability–Performance Relationship
expertise offered by consultants. Thus, some of the seminal
efforts that drove operations capability over the past two To examine H1 and H2 in a meta-analysis, we need to
decades were not necessarily based on firm-specific skills account for other study characteristics that might also influ-
but rather on skills that were available to all firms from the ence the overall capability–performance relationship. Next,
external market. Pursuing capabilities based on codified we discuss the study characteristics that might affect the
processes may not afford an organization the ability to capability–performance relationship.
achieve competitive advantage. For example, Carr (2003) Performance type. As we noted previously, prior
argues that the core functions of information technology, research has examined the role of capabilities in terms of
such as data processing and storage, are widely available efficiency in integrating and reconfiguring resources (e.g.,
and largely affordable and therefore do not provide an Dutta, Narasimhan, and Rajiv 1999; Eisenhardt and Martin
operations capability that leads to sustained advantage. 2000) and their impact on market outcomes (e.g., Vorhies
TABLE 1
Variance in the Capability–Performance Relationship: Test of Hypotheses and Study Characteristics
Sample Characteristics
Large (1) versus small (0) firms (U1) 103 –.016 (–.27)
Subjective (1) versus objective data (0) (U2) 103 .172 (2.47)*
Business-to-business (1) versus business-to-consumer (0) (U3) 103 –.051 (–.59)
Manufacturing (1) versus services (0) (U4) 103 .050 (.94)
U.S. (1) versus non-U.S. (0) (U5) 103 .039 (.62)
SBU (1) versus firm (0) (U6) 103 –.009 (–.14)
Multiple (1) versus single (0) industry (U7) 103 .023 (.30)
*p < .05.
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