Dynamic Managerial Capabilities in Action: Top Management Team Configuration and Asset Orchestration in High-Tech Start-up Firms

Abstract

The concept of dynamic managerial capabilities captures the critical role of managers for governing purposeful organizational adaptation processes. How top managers can build such dynamic managerial capabilities remains an unanswered question. Based on qualitative case-study data from two high-tech start-up firms, we analyze in this paper how top management team specialization and managerial decision-making facilitates adaptation and proactive change. Our findings show that diversity in human capital, social capital and cognitions on the level of senior executives yields high absorptive capacity of the top management team. A high level of absorptive capacity, in turn, facilitates the development of managers’ mindsets that are attentive towards multiple and diverse organizational and technological challenges. Dynamic managerial capabilities, thus, play a major role in enabling firms to proactively drive change, instead of continuously reacting to environmental pressure.