Integrating a dynamic capabilities framework into workplace e‐learning process evaluations

• Author: James T. Costello,Rod B. McNaughton
• Published date: 01 April 2018
• Date: 01 April 2018
• DOI: http://doi.org/10.1002/kpm.1565

RESEARCH ARTICLE

Integrating a dynamic capabilities framework into workplace

e‐learning process evaluations

James T. Costello |Rod B. McNaughton

Department of Management and International

Business, University of Auckland, Auckland,

New Zealand

Correspondence

James T. Costello, Department of

Management and International Business,

University of Auckland, Private Bag 92019,

Auckland 1142, New Zealand.

Email: j.costello@auckland.ac.nz

The goal of workplace e‐learning programmes is to improve employee capabilities in

order to enhance organisations' performance. However, notions of sustained perfor-

mance in strategic management have moved from measures of production and profit

to innovation and adaptation. We therefore suggest that the design and evaluation of

e‐learning should also be consistent with the dynamic capabilities framework, which

suggests that sustained superior performance results from an organisation's ongoing

ability to alter operational routines in line with environmental requirements. With

the intent of showing how e‐learning can be configured and evaluated to support

the development of dynamic capabilities, we present findings of an exploratory qual-

itative study that examines e‐learning processes and evaluations in 12 New Zealand

organisations. Our analysis reveals that organisations operating in more dynamic envi-

ronments are likely to use e‐learning to support innovative and adaptive processes,

and evaluate their e‐learning accordingly. This study's findings expand our overall

understanding of the dynamic capabilities concept, and shows how e‐learning can

be aligned to the achievement of more fluid objectives.

1|INTRODUCTION

The goal of workplace e‐learning is to improve employee capabilities

in order to enhance organisation‐level performance. However, effec-

tiveness is usually understood in a static context, where competitive

advantage depends on superior capabilities (Baldwin & Ford, 1988;

Kline & Harris, 2008). Such capabilities can be valuable, but they

are not always sources of sustainable competitive advantage (Chen

& Miller, 2012; Collis, 1994). This is particularly true of the lower‐

order capabilities that reflect an organisation's ability to perform basic

functions and activities to produce products and services. Such

capabilities are increasingly copied, substituted, or made obsolete by

competitive actions (D'Aveni, Dagnino, & Smith, 2010; Li, Shang, &

Slaughter, 2010). To maintain a distinctive advantage, organisations

must adopt a more dynamic perspective and develop capabilities

and structures that support innovation and adaptation. Employee

development activities, such as e‐learning, must therefore be

designed not just to develop specific capabilities but also to create

mutable or dynamic capabilities (Sung & Choi, 2014). However, there

may also be an efficiency trade‐off between developing specific capa-

bilities and developing dynamic capabilities (Ambrosini & Bowman,

2009; Drnevich & Kriauciunas, 2011) that is moderated by the degree

of environmental turbulence (Pavlou & El Sawy, 2006; Wilhelm,

Schlömer, & Maurer, 2015).

The dynamic capabilities framework (Teece et al., 1997) suggests

that sustained organisational performance results from alterations to

operational routines that are consistent with environmental require-

ments. This is particularly evident in industries with high rates of

change in competition, customer preferences, and/or technology

(Eisenhardt & Tabrizi, 1995; Wilhelm et al., 2015). The management

of knowledge resources allow an organisation to improve its market

responsiveness and lead to the development of dynamic capabilities

(Griffith, Noble, & Chen, 2006; Liao, Kickul, & Ma, 2009). Further,

learning mechanisms that accumulate, articulate, and codify knowl-

edge mediate the impact of knowledge resources on dynamic capabil-

ities (Chien & Tsai, 2012; Zollo & Winter, 2002) and guide their

evolution (Easterby‐Smith & Prieto, 2008; Zollo & Singh, 2004).

Nonetheless, few studies have examined how specific learning tools

influence the development of dynamic capabilities. One notable

exception is Iris and Vikas (2011), who hypothesised that e‐learning

technologies and dynamic capabilities coevolve through knowledge

sharing and transfer. They found a strong positive association

Received: 25 November 2016 Accepted: 5 February 2018

DOI: 10.1002/kpm.1565

108 Copyright © 2018 John Wiley & Sons, Ltd. Knowl Process Manag. 2018;25:108–125.wileyonlinelibrary.com/journal/kpm

between general e‐learning use and dynamic capabilities but did not

fully explain the nature of the relationship.

Investments in learning have generally been shown to

improve individual and organisational productivity, skills, and capabili-

ties (e.g., Allaart, Kerkhofs, & de Koning, 2002; Becker & Huselid,

2006; Subramony, Krause, Norton, & Burns, 2008). Yet, these same

investments can stifle innovation by promoting best practices that

limit creative responses when the business landscape changes

(Romme, Zollo, & Berendsy, 2010; Schulz, 1998). Aspects of e‐learning

might overcome some of this inertia by enabling swift integration of

learning with organisational strategies and social structures (Noe,

Clarke, & Klein, 2014; Nunes, McPherson, Annansingh, Bashir, &

Patterson, 2009; Wakayama, Kannapan, Khoong, Navathe, & Yates,

1998). For instance, e‐learning initiatives offer significant opportunity

to improve knowledge creation and sharing (Garcia‐Penalvo, Colomo‐

Palacios, & Lytras, 2012; McAfee, 2009; Yoo, Boland, Lyytinen, &

Majchrzak, 2012) and permit more agile responses to environmental

changes (Chen, 2010; Luor, Hu, & Lu, 2009). In addition, technical

and social advances such as the integration of e‐learning with social

media, networking, and knowledge management tools can alter how

knowledge is generated and transferred (Garcia‐Penalvo et al., 2012;

Reynolds, Becker, & Fleming, 2014). These advances allow organisa-

tions to use e‐learning to facilitate more responsive, flexible, and

innovative learning (Callan, Johnston, & Poulsen, 2015; Waight,

Downey, Wentling, & Arvidson, 2004), and thereby contribute to the

democratising of both the innovation process (Yoo et al., 2012) and

organisational structures (Purvis, Sambamurthy, & Zmud, 2001;

Zammuto, Griffith, Majchrzak, Dougherty, & Faraj, 2007).

This paper explores the possible relationship between the devel-

opment of dynamic capabilities and e‐learning processes. The dynamic

capabilities lens has been applied to new product development, alli-

ances, and acquisitions (e.g., Danneels, 2002; Kale & Singh, 2007;

Prieto, Revilla, & Rodriguez‐Prado, 2009; Zollo & Singh, 2004). Apply-

ing this same lens to e‐learning processes and their evaluations offers

several advantages over more functional applications. First, the devel-

opment and implementation of workplace e‐learning engages many

parts of an organisation, rather than specific functions. Second,

e‐learning processes are integrated with new operational processes

and therefore important to innovation and change. Finally, studying

these processes may offer valuable insights into operationalisation of

organisations' learning goals, environmental responsiveness, and

approaches to human capital development. In this study, we explore

the following questions: How do organisations use e‐learning pro-

cesses to enable innovation and adaptation? How do organisations

evaluate the ability of these processes to support innovation and

adaptation? Are there fundamental differences in how organisations

use e‐learning processes to accommodate innovation and adaptation?

In order to answer these questions, we report and discuss the findings

of an exploratory qualitative study that examines e‐learning processes

and evaluations in 12 large New Zealand‐based organisations.

The paper is organised as follows. First, we review the literature

on the impact of various learning strategies on dynamic capabilities.

We then consider learning effectiveness and how e‐learning process

evaluations may be influenced by the dynamic capabilities framework.

We then explore how organisations use and evaluate their e‐learning

processes to achieve business goals. Our analysis highlights how

organisations' e‐learning strategies and measures are embedded in

broader capability strategies and the organisational context. We con-

clude by showing how deliberate learning strategies such as e‐learning

can influence and assist the development of dynamic capabilities. This

paper contributes to current research in several ways. First, it

demonstrates how e‐learning processes might be used to develop

and support capabilities that go beyond fulfilling specific operational

requirements (Iris & Vikas, 2011). Second, it explains how

microfoundational activities such as e‐learning can be linked to

dynamic capabilities (Arndt, Pierce, & Teece, 2015; Barreto, 2010).

Third, it advances the idea that the effectiveness of dynamic capabili-

ties is moderated by environmental imperatives (e.g., Pavlou & El

Sawy, 2006; Wilhelm et al., 2015).

2|THEORETICAL BACKGROUND

2.1 |Dynamic capabilities

The dynamic capabilities framework emerged from the realisation that

performance and profitability are temporary unless an organisation

can continuously adapt and innovate (Chen & Miller, 2012). Dynamic

capabilities are usually defined as an “ability to integrate, build, and

reconfigure internal and external competencies to address rapidly

changing environments”(Teece et al., 1997, p. 516). When the envi-

ronment is dynamic or unpredictable, organisations must generate

new practices or routines, which form the foundation of their opera-

tional capabilities.

1

Simply put, an operational capability enables an

organisation to make a living by performing an activity on an ongoing

basis to a more or less consistent standard (Helfat & Winter, 2011;

Winter, 2003). Operational capabilities are synonymous with what

Helfat et al. (2007) call technical fitness or doing things right. In con-

trast, dynamic capabilities are those that help an organisation to

achieve evolutionary fit, or doing the right things. They represent a sig-

nature or meta‐routine that systematically adjusts an organisation's

operating routines to fit changing environmental requirements (Teece,

2014a, 2017; Wilhelm et al., 2015). Teece (2007) argues that dynamic

capabilities are composed of three microfoundations: sensing, seizing,

and reconfiguring. Sensing refers to the identification and assessment

of external and internal opportunities. Seizing is the organisation's

ability to amass resources and address the opportunities and threats

it has identified. Reconfiguration is the continued renewal of

resources for maximum value (Teece, 2014a).

Central to research on dynamic capabilities is the role played by

learning (Easterby‐Smith & Prieto, 2008; Zahra et al., 2006). Some

authors argue that learning is the process that underlies dynamic capa-

bilities (Bowman & Ambrosini, 2003; Teece et al., 1997). Others argue

that learning mechanisms guide the evolution of dynamic capabilities

(Eisenhardt & Martin, 2000; Winter, 2003) or are a specific type of

dynamic capability (Zollo & Winter, 2002). However, most scholars

1

To limit ambiguity, we use operational capabilities in this paper. Synonymous

terms include static (Collis, 1994), zero‐level (Winter, 2003), first‐order

(Danneels, 2002), substantive (Zahra, Sapienza, & Davidsson, 2006), or ordinary

(Teece, 2014b) capabilities.

COSTELLO AND MCNAUGHTON 109