What is Economic Profit

The chapter addresses a central dilemma from the viewpoint of dynamic capabilities and the resource based view of the firm: how to manage creativity within New Product Development without sacrificing financial control. The empirical evidence examined concerns 3M’s NPD activity in the United Kingdom from a holistically viewed management control perspective at the organizational level, and a study of the development and launch of a highly successful and radically new product, Genesis. It is concluded that NPD processes within 3M in the United Kingdom display a large measure of coherence juxtaposed with flexibility through the manner in which controls, holistically viewed, are embedded within organizational routines. Using case evidence clear distinctions can be made between dynamic capabilities, resources and product outcomes, and the elements of 3M’s capability can be discerned. The authors conclude that a dynamic capability can consist of both replicable elements, and elements embedded in the culture and routines of the firm that are difficult to imitate.