Dynamic Capability and Organizational Performance: Is Social Networking Site a Missing Link?

Dynamic Capability and Organizational Performance: Is Social Networking Site a Missing Link?

Ly Minh Thi Pham (Faculty of Business Administration, Ton Duc Thang University, Ho Chi Minh City, Vietnam), Lobel Trong Thuy Tran (Faculty of Business Administration, Ton Duc Thang University, Ho Chi Minh City, Vietnam), Phanee Thipwong (Department of Business Administration, Asia University, Taichung, Taiwan) and Wan Tran Huang (Department of Business Administration, Asia University, Taichung, Taiwan)
Copyright: © 2019 |Pages: 21
DOI: 10.4018/JOEUC.2019040101

Abstract

Given the growing importance of organizational capabilities due to the dynamic nature of most markets, dynamic capability has been increasingly considered a key element of superior organizational performance. This article extends this link by the mediational role of social networking site integration (SNS) to develop a competitive advantage. Drawing from the resource-based view (RBV) and social capital theory, this article empirically examines the ability of recognizing and capitalizing opportunities of dynamic capability and SNS mechanisms (technical and administrative) affecting organizational performance. Using a sample of 124 hotel managers, the article successfully identifies the mediator role of SNS in the dynamic capability-organizational performance link.
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Introduction

Organizational heterogeneous resource, rapid technological change, and managerial ability challenge, as well as our understanding of how dynamic capability becomes the key driver of new service performance, have advanced considerably in recent years (Leonidou et al., 2015; Lin et al., 2016; Wu et al., 2016). Dynamic capability fundamentally creates tenets of inimitable organization and sustainable competitive advantage with respect to a possession of capabilities that unequivocally make an impact on organizational performance. In line with this reasoning, previous studies have focused on an understanding of the link between dynamic capability and organizational performance, investigating a direct link (Javakhadze et al., 2016), a mediating model (Liao et al., 2009; Wu et al., 2016), models of strategy emphasizing efficiency (Teece et al., 1997), and also components of dynamic capability (Lin et al., 2016). As widely acknowledged importance, the relationship between dynamic capability and organizational performance ostensibly has remained steadfast.

Social networking sites (SNS) such as Facebook, Twitter, and Google+ (Xu et al., 2012) are also an important adaptation of organizational management since it is linked to business profitability, as demonstrated in many studies (Hsu, 2012; Hu & Racherla, 2008; Ifinedo, 2016; Su et al., 2015). The findings indicate that the SNS positively affects organizational businesses in several aspects. For example, 67% business-to-customer (B2C) and 41% business-to-business (B2B) companies have successfully explored new customers through SNS platforms. This makes SNS becomes a tremendous implication to businesses. Consequently, SNS has initiated a brand-new frontier for businesses and has been considered as an important factor for more than one-third of marketers’ businesses (Ku et al., 2013). SNS has also been important means of low-cost structure and high economic benefit in either general social interaction or communication. In particular, it provides opportunities for organizational administration and business offerings to be a critical innovative adaptation for organizational development.

However, extensive literature has yet to address a contributory relationship of dynamic capability, SNS, and organizational performance. This equivocal lack of understanding of how dynamic capability and SNS influence organizational performance needs to investigate how the link of dynamic capability and SNS contributes to organizational performance. For example, Grant (1996) argued that organizational capabilities are knowledge integration coping with resources for formulating organizational strategy. However, the knowledge-based theory of organizational capability of this study was vast in scale, without developmental assessments in special dynamic capabilities, and lacking in empirical evidence. Similarly, Wu et al. (2016) has concluded that the implication of dynamic capabilities to organizational performance remained vague in an emerging economy. According to Porter (1980), resources are not inherently valuable, but their value depends on how adequately complement them to a particular strategy. The integration of SNS, in terms of implemented strategy and the deployment of an organization’s resources and capabilities, should be aligned with its strategy to facilitate organizational performance.

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