STRATEGIC CHANGE & DYNAMIC CAPABILITIES

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1 Course STRATEGIC CHANGE & DYNAMIC CAPABILITIES (preliminary syllabus) Academic Year: 2015/2016 Trimester: 4th Instructor(s): Professor Ilídio Barreto Course Description: This course is positioned at the intersection of Strategy and Entrepreneurship. It aims to study how firms can create value in changing environments. And such endeavor requires inquiring into processes of opportunity formation and exploitation. Past dominant theories in the Strategy field were particularly concerned about explaining how firms can achieve sustainable competitive advantage. However, a number of recent studies began to show that sustainable competitive advantage is rare and declining in its duration. As the environment become more dynamic, unpredictable, uncertain, and ambiguous (that is, when exogenous and endogenous shocks are more common), firms struggle not only to achieve a competitive advantage but often just to survive. Thus, a challenging question arises: How can firms successfully address such an environment? The Dynamic Capabilities View is a leading theoretical perspective that intends to address such kind of questions in a world increasingly characterized by temporary competitive advantages. This view has attracted increasing attention within the business administration literature in recent years, not only in its original field strategic management but also in most of other functional areas, such as marketing, human resources management, operations management, international management, information management, and entrepreneurship. Based on cutting-edge research from Strategy and Entrepreneurship fields, this course provides an analysis of major issues related to strategic change and a detailed discussion about the Dynamic Capabilities View. Through this process, several oldfashioned frameworks will be questioned, and several exemplars of extensively used common sense in strategy will be rebutted.

2 So this course is targeted at students that intend to gain deep knowledge about new conceptual advances in Strategy (and Entrepreneurship) while being willing to challenge previous beliefs. According to the nature and purpose of the course, its learning approach will be a bit unorthodox and demanding: students should be willing to participate in in-depth preparation and discussion of major scientific articles in the involved topics. Preparation and discussion of international business cases will be also required every week. At the end of the course, students will have to prepare a groupbased written report of an international business situation related to the topics discussed in class. Attendance to every class will be crucial. Course Content: Value creation and competitive advantage Selection versus adaptation theories Types of strategic change The Dynamic Capabilities View D1: Propensity to sense opportunities and threats D2: Propensity to make timely decisions D3: Propensity to make market-oriented decisions D4: Propensity to change the resource base Course Objectives: The learning objectives of the course are twofold. First, it intends to significantly improve the students knowledge about how firms can strategically cope with fastchanging environments. Second, it aims to provide an opportunity for students to develop some generic skills, namely, those related to strategic thinking, critical thinking, creative thinking, and scientific research analysis.

3 Group Project: At the start of the course, students will be required to form groups. Each group will be responsible to identify and analyze one interesting international business situation related to the topics of this course. The chosen business situation will require the Instructor s explicit approval. At the end of this course, each group will have to submit a written report about that business situation (which can involve one or more firms), and make an oral presentation. Further information will be provided at the start of the course. Grading: Classes will include lectures, discussion of academic papers, and discussion of business cases. Typically, there will be one case and/or one academic paper to prepare for each class. As mentioned above, a group project will be required at the end of the course. The project will be presented by each group during the last class (every group member will have to participate in the oral presentation). The weights of the inputs for the final course grade will be the following: Individual class participation 20% Group project o Written report 30% o Individual oral presentation 10% Exam 40%

4 Bibliography: (preliminary list): Barreto, I. (2010). Dynamic capabilities: A review of past research and an agenda for the future, Journal of Management, 36(1): Barreto, I. (2012). Solving the entrepreneurial puzzle: The role of entrepreneurial interpretation in opportunity formation and related processes, Journal of Management Studies, 49(2): Barreto, I. (2012). A behavioral theory of market expansion based on the opportunity prospects rule. Organization Science, 23(4): Barreto, I. & Patient, D. (2013). Toward a theory of intraorganizational attention based on desirability and feasibility factors. Strategic Management Journal (forthcoming). Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: what are they? Strategic Management Journal, 22: Teece, D. J. (2007). Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28: Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18: Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal, 24: Biography: Professor Ilídio Barreto holds a PhD in Business Administration (City University, Cass Business School, London), an MBA (Universidade Católica Portuguesa, Lisbon), an undergraduate degree in Economics (UCP, Lisbon) and two diplomas in Strategy and Finance (Massachussets Institute of Technology, Boston). He teaches in undergraduate, Executive Masters, MBA, MSc, and Executive Education programs. He launched and coordinated about 60 Executive programs

5 during the past ten years and coordinated several consulting projects within CATÓLICA- LISBON's Center for Applied Studies. He is a former Associate Dean of CATÓLICA-LISBON and a former Director of the Business Administration Undergraduate Program. He is the Director of the Executive Master in Management with a specialization in Leadership Development and the Executive Master in Management with a specialization in Strategic Marketing. He published in several of the leading scientific journals in Management, such as the Journal of Management, Journal of Management Studies, Organization Science and Strategic Management Journal. His paper on the reconceptualization of dynamic capabilities was among the 10 most cited scientific articles published worldwide in 2010 in the category of Strategic Management, according to the 2012, 2013, 2014, and 2015 studies of Google Scholar Metrics. He won the 2012 Best Paper Award of the prestigious Journal of Management Studies; the prize was awarded in 2013 for his article "Solving the entrepreneurial puzzle: The role of entrepreneurial interpretation in opportunity formation and related processes". Contact(s) and Office hours: [email protected] Office hours: By appointment.