The Chosen Ones: The Selection of Capabilities in Professional Service Firms
|Type:||Articles in Refereed Proceedings (International)|
|Published by:||Proceedings of the 73th Annual Meeting of the Academy of Management (AOM)|
How do organizations select between different capabilities and what factors lead organizations to break away from their past investments? Using a micro-foundations approach to understand capability emergence, this paper suggests that organizations’ display a strong ‘preference-for-cumulativeness’ in the selection of capabilities and that this preference is present at both the knowledge domain and individual level. It then argues that both endorsements by senior leaders and external collaboration may enable organizations to deviate from the ‘preference-for-cumulativeness’. These ideas are tested on a unique, multi-source dataset of R&D projects selection in a leading professional service firm. Implications for theories of capabilities are advanced.