Dynamic Capabilities of New Ventures: Microfoundations, Evolution, and Analysis Framework

Abstract

This study delves into the dynamic capabilities of new ventures, focusing on their microfoundations, evolutionary processes, and the development of an analysis framework. Dynamic capabilities, defined as the ability to sense, seize, and reconfigure resources and competencies in response to changing environments, are crucial for the survival and growth of new ventures in today's competitive landscape. Drawing on insights from organizational theory, strategic management, and entrepreneurship literature, this research explores the underlying microfoundations of dynamic capabilities within new ventures, examining how individual-level cognition, team dynamics, organizational culture, and external interactions contribute to the development and deployment of dynamic capabilities. Additionally, this study investigates the evolutionary trajectories of dynamic capabilities over the lifecycle of new ventures, considering factors such as environmental turbulence, learning processes, strategic pivots, and resource constraints. Building on theoretical insights, this research proposes an analysis framework that integrates both qualitative and quantitative methodologies for assessing and enhancing dynamic capabilities in new ventures. The framework encompasses diagnostic tools, performance metrics, and strategic interventions aimed at strengthening the adaptive capacity and resilience of new ventures in dynamic market environments. By providing a nuanced understanding of the microfoundations and evolutionary dynamics of dynamic capabilities in new ventures, this study offers practical implications for entrepreneurs, investors, and policymakers seeking to foster innovation, growth, and sustainability in entrepreneurial ecosystems.