Dynamic capabilities and new product development performance: Korean SMEs

This study analyses the dynamic capabilities and new product development performance for hightechsmall andmediumenterprises (SMEs) inKorea. This study reveals the resources and activitiesthat underlie dynamic capabilities.We apply the concept of dynamic capabilities (sensing, seizingand managing threats/transforming capabilities) based primarily on the model of Teece. Basedupon a literature review, resources and activities (such as organizational slack, knowledgereconstruction, and exploration) were identified as contributing to reinforce the dynamiccapabilities of firms. Data were obtained from survey results collected from 241 Korean SMEs. Empirical results show that knowledge reconstruction activities that discard existing andestablished technological assets influence dynamic capabilities; however, organizational slackexhibits no significant relationship with dynamic capabilities. Exploration activities such asbuilding network, exploration of external information, and academic activities show a negativeinfluence on dynamic capabilities. Sensing capability, opportunity seizing capability andtransforming capability that underlie dynamic capabilities show a positive effect on newproduct development performance on a collective and aggregate level versus an individual basis.