University of Cambridge
LINKING THREAT–OPPORTUNITY PERCEPTION AND DYNAMIC CAPABILITIES THROUGH COMMON ANTECEDENTS: AN AUTOMOTIVE SUPPLIER PERSPECTIVE
Abstract
dc:description.abstractPurpose: The emergence of the electric vehicle has triggered the most challenging transformation in the automotive industry since its creation in the early 20th century. The announcements from major original equipment manufacturers (OEMs) that they are withdrawing from further development of internal combustion engines (ICEs) has cascaded down to automotive suppliers, which provide approximately 80% of the parts built into an ICE. While some suppliers perceive this development as a threat to their organisations, others see it as an opportunity. This work sheds light on the different perspectives of suppliers by providing answers to two main questions. First, what organisational factors are associated with suppliers’ perception of powertrain electrification as a threat or an opportunity? Second, are these organisational factors similar to those determining a firm’s long-term competitive advantage (through dynamic capabilities)? In other words, how ‘valid’ are executives’ perceptions of environmental events? The dynamic capabilities and strategic issue diagnosis literature are silent on these questions. Methodology: A dual-phase mixed-methods approached was employed. First, 20 case studies with resource-dependent automotive suppliers revealed the organisational factors influencing executives’ threat–opportunity perception. Then, survey data of 98 German automotive companies (~25% of the target population) across the entire supply chain was scrutinised to understand if the identified organisational factors were also associated with firms’ sensing, seizing, and reconfiguring dynamic capabilities. Findings: The qualitative phase revealed eight organisational factors influencing executives’ threat–opportunity perception: (1) suppliers’ strategy of being a purely manufacturing player versus including additional R&D/design work; (2) whether the components offered were solely outsourced parts or also components the OEMs produced in-house; (3) suppliers’ position within the automotive supply chain; (4) suppliers’ profit margins; (5) prior investments in manufacturing lines; (6) the existence of a parent firm or owning family; and (7) the accumulation and (8) transferability of relevant technical resources. All eight factors were associated with firms sensing, seizing, and reconfiguring dynamic capabilities. Two factors – (1) R&D involvement and (3) supply chain position – were obtained by scrutinising survey data, while the remaining six were recurrently addressed in prior literature about dynamic capability (DC) predecessors. Research implications/limitations: By combining the strategic issue interpretation and dynamic capability literature, this work bridges two bodies of work that were formerly dispersed while contributing to each literature stream individually. First, this study provides moderators to SID, pioneering work on an underdeveloped research area on strategic issue interpretation. Second, two organisational antecedents are added to the DC literature: firms’ supply chain position and R&D involvement. Nonetheless, this research is limited by the cross-sectional type of data collection and the bias towards a specific industry within a particular country. Practical implications: First, this work clarifies suppliers’ perceptions of powertrain electrification, offering numerous anchor points for policymakers to support and incentivise vulnerable ICE suppliers. Second, this research confirms that these organisational factors are associated with firms’ dynamic capabilities. Thereby, it reassures practitioners about their ‘view of the world’, allowing them to initiate countermeasures more confidently to better cope with the emergence of electrified vehicles.
Degree
thesis:*- Name dc:type.qualificationname
- Doctor of Philosophy (PhD)
- Level dc:type.qualificationlevel
- Doctoral
- Grantor dc:publisher.institution
- University of Cambridge
- Year dc:date.issued
- 2024
Author and committee
dc:creator, dc:contributor.*- Author dc:creator
-
- Sarferaz, Sunil
- Advisor dc:contributor.advisor
-
- Urmetzer, Florian
Subjects
dc:subject × 6Rights
dc:rightsIdentifiers
dc:identifier.*- DOI dc:identifier.doi
- https://doi.org/10.17863/CAM.118002
- OAI identifier oai:identifier
- oai:www.repository.cam.ac.uk:1810/383748