Scandinavian Journal of Management 37 (2021) 101137

Contents lists available at ScienceDirect

Scandinavian Journal of Management

journal homepage: www.elsevier.com/locate/scajman

Unfolding the airbus’ strategic growth: A successful case

Ali Kazeminia
ESADE Business School - Universitat Ramon Llull, Av. Torreblanca, 59,ESADE E-08172, Sant Cugat del Vallés, Barcelona, Spain

A R T I C L E I N F O A B S T R A C T

Keywords: Conducting a process-based case study, we present the successful growth of the Airbus consortium over 20 years,
Asset answering the question ‘how do firms grow sustainably?’ in the context of a dynamic technology-intensive in­
Process dustry. The study magnifies the underlying role of (1) the incremental and piecemeal accumulation of assets plus
Growth
(2) commonalities on the Airbus sustainable growth over the period. The growth is achieved through three cycles
Dynamic capabilities
of new product development over the 20 years of Airbus’ life. In addition, our results show two primary periods
of growth for Airbus: (1) consolidation, when Airbus was formed and became established as a consortium in
parallel with its first aircraft, and (2) technological advance, when Airbus explored the technological capabilities
of its partners and became a pioneer in the commercial aircraft industry in terms of technological advances.

1. Introduction
Over the previous decades, the question of how firms grow sustain­
ably has been at the center of strategic management research (Barney,
1991; Dierickx & Cool, 1989; Peteraf, 1993). Studies from the
resource-based school have provided the dominant views addressing the
sustainability of firm growth (Penrose, 1959). These studies first address
firms’ strategic and unique assets as a source of competitive advantage
(Barney, 1991; Dierickx & Cool, 1989). Second, they emphasize the role
of isolating mechanisms in the sustainability of competitive advantage
(Barney, 1991; Peteraf, 1993). However, the question of sustainability
becomes particularly crucial in the case of dynamic environments (e.g.,
high velocity industries) in which firms face a high level of uncertainty
(Brown & Eisenhardt, 1997; Wirtz et al., 2007). Uncertainty basically
encompasses potential and unknown events such as rapid technological
changes, shorter business cycles, or shocks that make firms unable to
predict and act ex ante. Unpredictable events undermine firm strategic
assets and render them a misfit to their environment (Helfat et al.,
2007). As a result, firms must look for ways to accumulate new strategic
assets and change (Eisenhardt & Martin, 2000).
To respond to the uncertainty of dynamic environments, studies from
the dynamic capability perspective address the role of dynamic capa­
bilities in adding and reconfiguring resources and, as a result, in the
sustainability of firm growth (Teece et al., 1997; Eisenhardt & Martin,
2000). These capabilities are considered to be processes or capacities
(Teece et al., 1997; Eisenhardt & Martin, 2000) that allow the firm to
purposefully change their resource base (Helfat et al., 2007) to maintain
their transient competitive advantage and experience sustainable
growth over time (Eisenhardt & Martin, 2000; Rindova & Kotha, 2001).
In this line, firms’ R&D capabilities to develop new technologies and
new products, especially, have been identified and discussed as one of
the primary driving forces behind changing resources and the growth of
firms (Danneels, 2002; Eisenhardt & Martin, 2000; Leonard-Barton,
1992; Schilke, 2014a). These capabilities, in fact, help the firm to
continuously develop and improve its technologies and products when
product life cycles become shorter, technologies advance rapidly, or
there is intense competition in the environment (Helfat et al., 2007).
Reviewing the literature, despite the relevance of strategic asset
accumulation as a source of competitive advantage and firm sustainable
growth (Dierickx & Cool, 1989) and the role of firm (e.g. R&D) dynamic
capabilities in changing firm assets (Eisenhardt & Martin, 2000),
empirical studies extending and supporting how strategic assets are
accumulated and how capabilities interact and contribute to this accu­
mulation are scarce (Demir et al., 2017; Schilke et al., 2018). In addition,
since we are interested in the “how” of firm growth, the relevant
empirical studies are essentially case studies or qualitative in general
(Van de Ven & Poole, 1995) and previous studies have emphasized on
the necessity of such method in the literature (Helfat et al., 2007;
Ambrosini & Bowman, 2009; Easterby-Smith et al., 2009; Danneels,
2011).
Prior empirical studies (“how” questions), especially those with a focus
on New Product Development (NPD), for instance, have supported the
underlying role of processes such as the addition and modification of
firm capabilities, through which firms change their resource base
(Danneels, 2011). Alternatively, these studies have empirically
demonstrated how firm capabilities are developed in interaction with

E-mail address: ali.kazeminia@esade.edu.

https://doi.org/10.1016/j.scaman.2020.101137
Received 29 November 2019; Received in revised form 29 August 2020; Accepted 26 November 2020
Available online 22 January 2021
0956-5221/© 2021 Elsevier Ltd. All rights reserved.
A. Kazeminia
their new product development processes (Danneels, 2002; Prašnikar
et al., 2008; Narayanan et al., 2009). Another group for instance ad­
dresses the role of various antecedents of dynamic capabilities (Eriksson,
2014) such as trust (Prieto et al., 2009), tangible resources (Schriber &
Löwstedt, 2015), and resource orchestrations (Schriber & Löwstedt,
2018) in the case of NPD. In this line, Salvato (2009) shows how various
sequences of design/improvising activities, classified as different groups
of underlying routines/processes, affect the nature of NPD activities.
Available studies primarily emphasize change during the period of firm
decline (Danneels, 2011; Langlois & Steinmueller, 2000; Tripsas &
Gavetti, 2000), while studies on the growth period are rare in the case of
large firms (Conboy et al., 2020) and specifically new large products.
Last but not least, despite its importance, the commercial aircraft in­
dustry has been neglected as a study context to date.
Considering the intersection of studies on growth, capabilities, and
asset accumulation, we formulate this question that how do firms grow
sustainably via managing the cycles of large NPDs in dynamic contexts? How
do the cycles of large NPDs interact and affect a firm asset accumulation in
dynamic contexts?
Analyzing the successful case of the Airbus consortium as a pioneer in
the commercial aviation (aircraft) industry and using the narrative
methodology (Pentland, 1999), we present and theorize about a case of
sustainable growth, drawing on the Asset Accumulation Theory (AAT)
by Dierickx and Cool (1989) and Dynamic Capabilities (DCs) by Eisen­
hardt and Martin (2000). We present how the Airbus consortium was
sparked as a joint partnership between France, Britain, and Germany in
1967 and how, by 1987, it had become a pioneer in the commercial
aviation industry through its technological advances. The study presents
“how”, among other possible ways, firms can sustainably grow by
providing a cyclical process-based model of new product development
as the basis for firm asset accumulation. Our findings magnify the role of
two core factors in the sustainable growth of Airbus: (1) the incremental
and piecemeal accumulation of strategic assets that contribute to Airbus’
competitive advantages and (2) the centrality of the ‘maximum com­
monality’ strategy in this asset accumulation. This growth represents the
progression of Airbus in terms of technology, credibility, and its devel­
opment of various types of aircraft over the period of study. Addition­
ally, we identify two primary periods of growth for Airbus: (1)
consolidation, when Airbus was formed and became established as in­
dependent entity and (2) technological advance, when Airbus explored
the technological capabilities of its partners to a greater level.
This study contributes to the strategic growth literature by empiri­
cally extending the asset accumulation theory and to dynamic capabil­
ities by further elaborating them in the context of a dynamic industry.
Our study complements the previous studies in the literature by
providing a more complete picture of how dynamic capabilities func­
tion, and more importantly, how firms accumulate resources resulting in
their sustainable growth over time. In the following part, we present a
model of firm sustainable growth. Next, we comment on the method­
ology and the data collected for the study. Then, we present the growth
of Airbus using an analytic description and theorization about the events
through which Airbus developed its aircrafts. Finally, we provide the
findings of confronting analysis and end the study with our discussions
and concluding remarks.
2. A model of sustainable growth
2.1. Asset accumulation theory
We center our study on the AAT by Dierickx and Cool (1989) and the
DCs by Eisenhardt and Martin (2000). We define growth as an accu­
mulation of assets that results in an increase in size and/or an
improvement in the nature of firm assets. Dierickx and Cool (1989),
addressing the sustainability of firm competitive advantage, suggest that
strategic assets such as capabilities, technologies, or reputation should
be built and accumulated over time because they may not be available
2
Scandinavian Journal of Management 37 (2021) 101137
and cannot be bought (Dierickx & Cool, 1989) in the “strategic factor
market” (Barney, 1986). These ongoing built and accumulated assets are
central to the firm’s competitive advantage and are basically the source
of sustainable rent creation within the firm. AAT posits that accumula­
tion processes are subject to a series of characteristics including asset
mass efficiency, time compression diseconomies, inter-connectedness,
asset erosion, and causal ambiguity. Time compression diseconomies
addresses the law of diminishing return where an increasing amount of
accumulation occurs with additional costs, asset mass efficiency basi­
cally delivers the cumulative effects of assets contributing to further
accumulation, inter-connectedness addresses the nature of comple­
mentarity between different assets where erosion signifies the decay of
assets over time (Knott et al., 2003). AAT addresses that firstly (1) what
makes these resources special and the source of competitive advantage is
the unique way in which they are built and accumulated over time,
secondly (2) causal ambiguity lingers the imitation of assets, if they
could be built by competitors, and at times impossible providing the
possibility of sustained competitive advantage and growth (Dierickx &
Cool, 1989; Thomke & Kuemmerle, 2002). Among the AAT’s results, we
can derive that accumulation processes (e.g. orchestrations) resulting in
superior and unique inimitable assets, face limitation in rate, linearity,
and sequence: that, the characteristics result in a set of patterns such as a
maximum limit to pace for instance when a specific sequence should be
followed to accumulate a specific asset and that the interaction of pace
and sequence does not allow for linearity and faces delays. Overall, the
accumulation processes have to be managed in a way that the highest
level of performance can be derived.
2.2. Dynamic capability view
The accumulation and sustainability of assets becomes critical in the
case of a dynamic environment with a high level of uncertainty and
frequent technological change (Dierickx & Cool, 1989) for instance
where the erosion rate increases (Pacheco-de-Almeida, 2010). In dy­
namic environments, firms need to accumulate assets to respond to the
changing needs of their environment (Eisenhardt & Martin, 2000). We
discuss the role of dynamic capabilities, which are central to the accu­
mulation of assets in dynamic environments and when there is need for
change. DCs are firm capacities and processes that allow it to purpose­
fully reconfigure its resource base (Helfat et al., 2007) and maintain its
transient competitive advantage in response to the changing needs of its
dynamic environment (Rindova & Kotha, 2001). As a result, DCs allow
the firm to change the nature of the current stock of assets and develop a
new nature and direction. These capabilities can be divided into two
groups: second-order and first-order capabilities (Schilke, 2014b;
Winter, 2003). First-order capabilities help the firm to ‘make a living’
through its daily activities (Winter, 2003), while second-order capabil­
ities are of a higher order and are used to reconfigure the remaining
lower-order capabilities and firm resources (Danneels, 2002; Schilke,
2014a, 2014b). In the case of dynamic technology-intensive industries,
firms’ R&D capabilities have been discussed and supported as
second-order capabilities that primarily contribute to the reconfigura­
tion of resources (Danneels, 2002; Eisenhardt & Martin, 2000; Leo­
nard-Barton, 1992; Schilke, 2014a). In fact, R&D capabilities allow the
firm to accumulate new technological resources and to introduce new
technologies and products based on the changing nature of the envi­
ronment (Eisenhardt & Martin, 2000; Schilke, 2014a, 2014b) to serve as
a basis of firm sustainable growth.
Eisenhardt and Martin (2000), in the case of multi-product firms,
discuss related ‘sequenced steps’ via three main processes: “single
product development, probing the future, and linking routines from one
product development project to the next”. Firstly, the firm has to
develop an initial basis for its product development activities, then
related required skills have to be developed for probing the future, and
then there is a need for time-pacing skills in creating a rhythm of new
product development. This is when they define dynamic capabilities
A. Kazeminia
(according to Teece et al., 1997) as “the firm’s processes that use
resources-specifically the processes to integrate, reconfigure, gain and
release resources-to match and even create market change. Dynamic
capabilities thus are the organizational and strategic routines by which
firms achieve new resource configurations as markets emerge, collide,
split, evolve, and die.” (Teece et al., 1997). Eisenhardt and Martin
(2000) specifically consider dynamic capabilities as those processes
which are idiosyncratic in their details such as alliancing, NPD, resource
integration, knowledge brokering, etc.; but they still are moveable be­
tween different units and firms. That, the shared part of these capabil­
ities, making them fungible, provides the possibility of application in
various contexts. This is specifically important in managing NPDs in
alliances. In addition, the authors address that dynamic capabilities in
moderately dynamic contexts are analytical processes emphasizing on
variation, while in the case of high velocity ones they are experiential,
iterative, and fragile processes emphasizing on selection. We make the
connection between AAT and DCs by considering dynamic capabilities
as moderating factors between the flow of assets as well as asset stocks
accumulating within the firm (e.g. Pisano, 2017). That, dynamic capa­
bilities are the higher order factors contributing to reconfiguring the
firm lower order capabilities and adding to the firm assets stocks. Thus,
these dynamic capabilities contribute to unique asset accumulation
processes within the firm by reconfiguring the flows of assets into the
firm.
2.3. A cyclical model of new product development
Drawing on the two theories, we propose a process-based model as
the basis for firm sustainable growth in dynamic technology-intensive
industries with a focus on new product (e.g., aircraft) development
(see Fig. 1). We try to extend the literature by framing AAT/DC into a
cyclical model:
Consider an R&D-based firm in a dynamic technology-intensive in­
dustry in which the firm’s growth and survival are highly dependent on
the firm’s ability to change and to continuously accumulate new re­
sources (e.g., Brown & Eisenhardt, 1997). In such contexts, in accor­
dance with prior studies, new product development is one of the main
drivers of firm asset accumulation (e.g., Danneels, 2002; Eisenhardt &
Martin, 2000; Schilke, 2014a). A new product and its underlying tech­
nologies become actualized after a period of research, design, and
testing considering the needs of the environment, the firm objective, or
the interaction between the two (Danneels, 2002). For instance, as a
potential result of resource bundles, a final product (named A) with an
initial level of complexity, purposefully comes into actuality based on
the initial stock of resources (initial technologies, physical assets, etc.)
(Dierickx & Cool, 1989), the firm’s R&D capabilities, the activities
Fig. 1. A Cyclical Model of Asset Accumulation.
3
Scandinavian Journal of Management 37 (2021) 101137
performed to design/create the product (Brown & Eisenhardt, 1997),
and finally, the resources entering the firm as inputs such as raw ma­
terials and technological inputs (Dierickx & Cool, 1989). The new
product and the accumulated assets contribute to the firm’s competitive
advantage and its financial performance.
At this point, by completing a cycle of new product development and
introduction, the firm has moved from its initial level of asset stocks and
has added a new level of asset stocks. However, the journey has just
started. If in the previous cycle, the firm has been able to meet its
objective at a satisficing level, it needs to enter a new cycle and develop
new technological advancements and products to address the dynamic
nature of its environment (e.g., new market needs, new technologies,
economic shocks) (Danneels, 2002; Schilke, 2014a). As a result, based
on its current stock of strategic assets (product A and its related tech­
nological advances), R&D activities (Danneels, 2002) and (new) inputs,
the firm has the opportunity to introduce new technological advances
and product(s) (named B) with a more complex and improved nature
(Schoemaker, 1990). Therefore, being able to appropriately manage
these cycles are key to the firm performance. However, it is important to
address what factors impact the nature of these cycles.
Applying an input, process, and output model (e.g. Hitt et al., 2011),
different sets of factors affect the cycles of asset accumulation. In the
case of input to the firm wealth creation processes, there are environ­
mental factors as well as internal resources affecting the cycles. Looking
into the firm environment, the role of environmental munificence,
dynamism, and interconnectedness have been addressed as important
factors. Environmental munificence is related to the availability of re­
sources such as raw materials, financial capital, labor, context-specific
resources (e.g. regulations) and customers that support the firm’
growth and survival. The dynamism creates uncertainty in the form of
threat and opportunity that have to be managed on various events.
While in this framework, interconnectedness (in Hitt et al., 2011 ter­
minology) has been addressed as the possibility of alliancing which is
the basis of our study and provides the possibility of access to various
resources: that, the firm tries to benefit from assets outside its bound­
aries and integrate them within side into its current assets and products.
At the other side, these are related internal resources such as financial,
social, human, leadership as well as technological resources within the
firm required for developmental activities, controlling for the initial
assets entering into the firm.
Moving ahead, there are processes within each cycle in terms of their
timing, structuring, bundling, and leveraging from a prior cycle to
another one (e.g. Hitt et al., 2011). Timing signifies when a cycle has to
be started when its ending is stochastic with a confidence interval.
Structuring refers to the ways with which different initial assets are set
beside each other. Bundling is related to developing the advanced
A. Kazeminia
resources/components, and finally leveraging is related to shifting re­
sources from one cycle to another one (or how assets are orchestrated
from one cycle to another one). For instance, in the case of timing, how
prior assets (products/components) at a point in time are brought
together to develop new assets, when they can be moved into new
products and that new components are upgraded in the current products
(in new cycles). When to bring a new product could be dependent on the
capacity of market to accept the product, what the competition put
forward (e.g. being ahead), the capacity to develop customers, or being
able to benefit at a highest level from the firm assets and properties.
These all should be done in less costly manner or to have a higher level of
value relative to competition (Peteraf, 1993): for instance, these pro­
cesses should be managed to bring about the highest performance via
reducing delays, maximizing orders, and managing the complexities of
its context. Finally, beneficiaries from these value-adding processes are
the firm and its customers/stakeholders (Hitt et al., 2011). That, there
are value creation sides to these processes representing themselves as
the firm financial performance to various stakeholders.
Dierickx and Cool (1989) discuss unique assets should be built over
time and building the assets are usually the result of long processes.
However, within a cycle, the condition is limited to the characteristics
that AAT imposes on the development of related assets: they are both
enforcing as well as hindering. Among enforcing forces at a cycle level,
direct conclusions from AAT could be that the better the accumulated
assets in prior cycles, the better the following built and accumulated
assets (Dierickx & Cool, 1989). Asset mass efficiency provides the pos­
sibility of accumulating more assets and acceleration in the following
cycles (Helfat, 1997). Inter-connectedness [in Dierickx and Cool (1989)
terminology] provides the possibility of synergies between different
cycles increasing the pace of accumulation. However, the firm capacity
is limited in developing related products due to its size as well as time
compression diseconomies, and there are limitations to NPD. In addi­
tion, as all activities cannot go according to the firm planning, there are
delays in conducting the NPD and the sequence of cycles (e.g. design,
testing, adjustment, delivery), and if they can/not be changed: limita­
tions in the initial development, access to resources, product testings
and related adjustments, and final delivery to customers. Developing
over time, the built assets as well as their cycles become more inter­
woven: for instance, whether the cycles are in parallel, if they are
managed sequentially, or in later stages they becomes pooled with each
other affecting the accumulation of assets (Thompson, 1967). This re­
quires making relationships between cycles as well as adjusting them on
their own (Eisenhardt & Martin, 2000).
The sustainability of growth centers on a cycle in which, after the
introduction of the first product, the firm continuously accumulate and
develop asset stocks (Eisenhardt & Martin, 2000). In each cycle, the
unique accumulated resources (stocks) become a foundation that the
firm, through its dynamic R&D capabilities, can capitalize on for its next
level of growth and new advancements (Helfat, 1997; Henderson &
Cockburn, 1994). However, there is a maximum growth rate to the
process (Penrose, 1959) due to the time required for the internal accu­
mulation of the necessary stocks, their unavailability in the strategic
factor market (Dierickx & Cool, 1989), or property rights restrictions
(Barney, 1991). Assuming that the firm evolves around its new products,
the different bundles of resources embedded within the firm (e.g.,
technological base, products, processes) change to maintain the firm’s
fit with its environment (Rindova & Kotha, 2001) (See Fig. 1).
When it comes to addressing the nature of sustainability, in addition,
there is the possibility of specifying the firm dynamic performance.
Firstly, sustainability at an initial period can be related to reaching to
related performance criteria specific to the first cycle and then, keeping
them in the following cycles. These criteria could be developing the
initial product, stabilizing processes, an initial sale (orders/deliveries)
and reaching the product to markets, an increase in sales, ROI, and
reaching to a break-even point. In the following cycles, it is important to
develop multiple products in parallel successfully and keep a high
4
Scandinavian Journal of Management 37 (2021) 101137
performance in all of these products consistently (Iansiti & Clark, 1994).
In addition, looking inside the firm and the cycles of NPD, not only do
these processes result in new products, but in parallel new knowledge,
skills, and capabilities for the development of those products are
developed: required for dealing with the requirements of that cycle in
terms of technical and market uncertainties (Iansiti & Clark, 1994).
That, “product development in this context not only generates new ca­
pabilities directly; it also provides a useful window on the general
capability-building process” (Iansiti & Clark, 1994). The key issue is
related to how (1) prior cycles are basically reinforced when a current
product is improved by the development of new products, (2) new
products as well as new technologies/components are developed to
improve a portfolio at a higher level, and finally (3) how the nature of
inter-cycle processes is improved in-between.
This requires the firm dynamic capabilities to reconfigure its current
assets and capabilities to consistently address the new contingencies
within its technical and market environment, to meet the related per­
formance criteria (Pavlou & El Sawy, 2011). These contingencies could
be related to changes in customers’ preferences, technological changes,
regulations, new players in the industry, etc. Also, they could cover
different market segments and time periods. Various customer­
s/suppliers are brought into cycles such that their requirements are
mutually adjusted and developed in terms of their product utilizations,
future expectations, and technology. This is more than being close to
customers or suppliers (Iansiti & Clark, 1994). For this, the firm is
required to effectively coordinate and organize between different units
and across processes to benefit from the most of available assets ac­
cording to developmental purposes. In each cycle, related capabilities
should be developed and for new products they have to be improved in
all aspects accordingly. As a result, the firm is capable of an appropriate
internal integration/coordination as well as managing unexpected sit­
uations and resolving unexpected problems (Iansiti & Clark, 1994;
Lavie, 2012).
In the first/initial cycle, there is a lack of structure in performing
related activities controlling for the overall basis of the firm (e.g. an
alliance). In this period, the new product development processes get
shape where an initial structure is formed for performing tasks/activ­
ities. For this, the assets entered into the firm in the initial cycle affect
the initial structure and related adjustments: in this regard, the more the
amount of assets entered, the less the amount of asset building/struc­
turing activities as there are more assets for coordinating and a less need
for the development of new assets (e.g. Lavie, 2012). In addition, this
initial level of assets with different forms and shapes affects the related
combinatorial processes used to develop new assets. Depending on the
assets entered, how much the firm is interested in pushing new assets
development boundaries forward is elaborative: the higher the signifi­
cance of these new assets development, the less the role of prior assets
and the need for further R&D activities. In other words, the more (less)
radical a new product, the less (more) the amount of leverage, ceteris
paribus (Nerkar & Roberts, 2004).
To support our model, we next comment on the context, method, and
data used for the study. In addition, it should be noted that we pur­
posefully cover the technological sides of Airbus to further explain its
technological aspects.
3. Research methodology
3.1. Commercial Aircraft Industry (from 60 s to 80 s)
For this study, we chose the commercial aircraft industry because of
its dynamic nature. The uncertainty in this industry is the result of
continuous innovation, technological advances, competition between
large players, and various types of shocks (e.g., economic shocks).
Technological advances and new product development are, in fact, the
key to growth in this industry, and aircraft producers are very repre­
sentative of the model in the previous section. These firms need to
A. Kazeminia
innovate and advance continuously to address the various forms of un­
certainty in their environment, and these firms mostly develop and grow
around their new aircraft. Given the enormous investments required to
develop and build new technologies and aircraft in the commercial
aircraft industry, alliances are frequent and are key to growth among the
players (Garrette et al., 2009). Additionally, the commercial aircraft
industry has been less studied and explored despite its market share and
importance in the management area.
In (mid)-60 s (1966), “the [airline] industry was enjoying one of its
periodic booms: demand was growing faster than the manufacturers could
cope with and the number of passengers was increasing rapidly.” Boeing,
Douglas, and Lockheed were the major American players in the aircraft
development industry responding to this growing demand. Different
ideas were evaluated by both airlines and aircraft developers in the US
showing the demand/preference toward larger aircrafts (over 300 pas­
sengers): like 747 Jumbo (4-engine) by Boeing carrying 350 passengers;
Lockheed (3-engine Tristar) and Douglas (3-engine DC-10) which
resulted in a head-to-head competition between the two and the disas­
trous condition of Lockheed which also brought about the down of Rolls-
Royce in 1971. The Airbus positioning (2-engine A300), however, as a
new entrant in 60 s was not a direct competition with the stated players
giving Airbus a space of growth in the market. But, the context did not
remain munificent and because of economic recession in 1973/4, as
estimations anticipated in late 60 s, demand significantly shrinked in the
airline industry which pushed aircraft developers to develop smaller
aircrafts. In the initial period, 90 % of total share was in the hands of
Americans. Although, it should be noted that European component de­
velopers (e.g. Rolls-Royce, SNECMA) were the suppliers of the US de­
velopers and there were other smaller commercial European aircrafts (e.
g. BAC, Concorde, Galion) in this period.
In mid-late 70 s, the airline industry in the US was deregulated and
this resulted in the formation of hub and spoke system and the entry of
new smaller airlines as well as the exit of some, and the competition
intensified among players. In parallel, in Europe the demand increased
for smaller aircrafts as well as shorter routes. In mid-80 s, additional
safety regulations (e.g. noise reduction, etc.) were imposed on the in­
dustry which more and more pushed airlines and aircraft developers for
further advancing their aircrafts and flights. In sum, from 1967 to 1987
despite the initial start showed an expansion, later the commercial
aircraft industry saw a contraction because of a higher level of compe­
tition, an economic recession, an oil shock, and the context descended in
resources. This can be seen from this point that, in addition, American
aircraft developers started merging with each other (e.g. with Boeing/
McDonnell Douglas) as their European counterparts did before. In par­
allel with this, already established airliners (e.g. British Airways) started
reconfiguring their routes and tried to become more efficient (Kim &
Kuilman, 2013). Overall, the need for efficiency increased in the com­
mercial aviation industry.
3.2. Data analysis and methodology
In our study, Airbus was selected first because the case fit well with
our theoretical model and the aim of studying sustainable firm growth
with a focus on new product development (Yin, 2003). Second, Airbus is
a representative and impressive case of successful growth, with over 50
percent market share. Extreme cases can provide a richer context for
realizing and specifying underlying processes or relationships (Yin,
2003). In addition, regarding the bold success of Airbus, a satisficing
level of representative subjective and objective data and documents are
available describing the journey of Airbus over the last four decades
(Yin, 2003). However, because the study was concentrated on the initial
stage of Airbus growth as the unexplored part of the literature, we
selected the initial 20 years of Airbus growth, from when it was formed
between France, Britain, and Germany until the moment that it became
a pioneer in the industry in terms of technological advances in 1987.
To support the study model regarding the “how” of firm growth, we
5
Scandinavian Journal of Management 37 (2021) 101137
drew on process-based case studies (Van de Ven, 1992) based on nar­
ratives (Pentland, 1999). In this regard, first, process is understood as
“the sequences of incidents, activities, and stages ‘[events in general]’
that unfold over the duration of a central subject’s existence” (Van de
Ven, 1992). As Langley (2007) put “process thinking involves considering
phenomena dynamically – in terms of movement, activity, events, change and
temporal evolution”. Second, these are stories that describe and create
connections between sequences of events. In fact, stories help a
researcher to understand a context, make sense of the relationships
between events, and develop plausible explanations for the nature of
phenomena (Pentland, 1999). Stories therefore do more than just mirror
phenomena as a sequence of events, but at a deeper level, they move
“from description to explanation” (Pentland, 1999) and help to capture
the complexity of processes and reveal the underlying patterns pro­
ducing a specific result (e.g., sustainable growth) (Van de Ven & Poole,
1995). Pentland (1999) addresses that in the “theory as narrative” view:
“an explanation is a story that describes the process, or sequence of
events, that connects cause and effect” and that “narrative text contains
indicators for an underlying process theory.”
The narrative methodology of Pentland (1999) provides several
steps: firstly, the narrative is considered as data where it includes
specifying sequence in time, focal actors, a narrative voice, a canonical
or evaluative frame of evaluation, and finally context indicators. These
are the basis for developing an analytical story. However, once these
items are ready, the narrative is more than just data: it is a basis for
developing a process theory as (1) abstracted sequence of events, (2) as
patterned/structured sequence of events. Although, Pentland (1999) at a
more abstract level treats all stories as process-theory and emphasizes on
the importance of other aspects beside the sequence and that sometimes
the stories themselves are already abstracted theories: “Regardless of
what approach we take to creating it, we need to understand that an expla­
nation is basically a process theory—a hypothesis about a causal sequence of
events” (Pentland, 1999). With this, however in developing a theory, the
key issue is related to higher-order laws explaining the sequences of
events. In this condition, the narrative is a way of thinking and making
connection between past and future. It is a way of specifying underlying
patterns, their antecedents and/or consequences. For this study, we
sought to address the question of a firm sustained growth in terms of
pace, capability interactions, and asset accumulation processes (e.g.
asset orchestration processes). This is where we define pace as the rate at
which the firm accumulates assets and develops capabilities or new
products. This rate can be specified on its own or compared to an
industry’s condition (e.g. Kunisch et al., 2017; Dykes et al., 2019). With
this, as it will be noted later, our research design fully matches the
narrative method by Pentland (1999).
To specify the underlying processes/patterns, as Pentland (1999)
put, there is a need for a series of generating mechanisms with which
these higher-order processes can be extracted: this is where patterns are
evaluated according to these mechanisms/cyclical models. These
cyclical models have an inherent/structured sequence of events providing
the possibility of theory development and extension via extracting
related sequenced patterns, antecedents, and/or consequences. In this
condition, the cyclical models become a locus of data analysis where the
story is compared to (confronted with); and (ceteris paribus) the stronger
(e.g. more reliable, well-established, etc.) the cyclical model driving the
processes, the more rigorous the underlying patterns extracted from
their matching with data (e.g., Pentland, 1999). As it was addressed in
the previous part, we benefited from the Eisenhardt and Martin (2000)
cyclical model of new product development based on a firm R&D ca­
pabilities which is a fully-established approach (Peteraf et al., 2013; Di
Stefano et al., 2014). In our study, we framed it as teleology (Van de Ven
& Poole, 1995) to capture the underlying processes. In our conceptual­
ization, in addition, there is the input of assets into the firm,
value-creating processes and accumulated assets, and the output of
aircrafts which feeds to the following cycle. The narrative provides the
required description of events/processes showing how each event has
A. Kazeminia
fed to the accumulation of assets via related processes, how prior assets
(e.g. credibility, technology, …) has fed to new assets, and how a cycle of
new product development has fed to a firm sustained growth meeting
the requirements of its context.
In the case of pattern extraction, according to the elements of cyclical
model, by confronting it with the data, there is the possibility of adding
to its delicacies and providing a more nuanced representation of the
relationships between different parts of the cyclical model (Bettis et al.,
2015): this is done by adding further details to increase the richness of
the model in an iterative manner. In our research design, we are trying to
mainly extend and elaborate our theoretical model (Danneels, 2011;
Ketokivi & Choi, 2014). This is where both the cyclical model and the
data are playing an almost equal role in a theory extension and speci­
fying those unobserved aspects that can be extracted from the data to
enrich the extension (Ketokivi & Choi, 2014). At first, the cyclical model
itself is enriched with data and in the second stage these enriched cycles
are feeding to the development of higher-order patterns by capturing
their nature and inter-relationships with each other, back and forth
iteratively. This is while, the nature of relationships is explained ac­
cording to what the theory explains and what the data offers, where they
are interacting together. In addition, the interaction provides the chance
of further enriching the theory. For this, we have specified those set of
processes contributing to the firm sustained growth that could further
add to the richness of our model.
It is worth mentioning that processes are progressive aiming to
build/toward developing new assets and contexts: a series of capabil­
ities/assets are developed in parallel with each other and these capa­
bilities are feeding to themselves for bringing a final product into reality
in a competitive way. Better alliancing/R&D/commercializing in terms
of performance feed to better new products/orders/technologies/
knowledge as the indicator of performance. Higher-order capabilities
and new products are developed and accumulated as assets. These
processes are the ones required for reconfiguring current assets to come
up with new assets. Alliancing/R&D/commercializing processes are
developed according to their involvement with the context in bringing
about what is aimed for. For instance, negotiating for a better deal with
partners, conducting experiments for developing a better technology, or
customer-contacts for developing a better advertisement. These pro­
cesses contribute to a specific aim and final performance by dynamically
setting the level of factors represented as different phenomena at surface
(Pentland, 1999). However, how these items are done better versus
other players is the key to the firm performance and its sustainability.
Developing a right product for the market versus other players feeds to a
better sale or gaining market-share. This is while within different con­
texts, contingently, different performance effects are expected. Related
processes as alliancing/R&D/commercializing, while themselves are
developing, finally bring about the main product with the related
characteristics placing a firm (e.g. Airbus) among top-performers in the
market.
A process can describe the change in the amount of a factor or some
specifically in our AAT framework, and this can show how, interactively,
a specific factor(s) is changing over the description of a process. For
instance, alliancing between different partners increases the level of
trust, while a high level of trust can feed better alliancings. As we have a
progressive approach, a specific process can affect a specific factor by
decreasing/increasing its amount. A process can be 1 related to one
factor (1-to-1) or it can cover a variety of factors (1-to-n). Therefore, the
description of a process is covering a variety of indicative factors
changing in the nature of constructs (at different levels). Processes can
be directive, meaning that they are creating a specific change in a spe­
cific condition to a specific resource (developing it, creating a specific
action, etc.). Processes feed to developing a specific asset(s)/resource(s)
and as a result of that a specific asset gets to applicability. In addition,
these processes are interacting and co-evolving around a new product:
for instance, alliancing is applied with suppliers, developers, and cus­
tomers in developing a technology, opening market position, and
6
Scandinavian Journal of Management 37 (2021) 101137
gaining market-share. Therefore, not only is R&D feeding to alliancing,
but also one has become a base for the other: e.g., alliancing for R&D.
This delivers the primacy of alliancing over R&D once or vice versa in
another occasion, while the direction means which one feeds to another
and this also could change accordingly.
How constructs are changing and related to each other is another
part we comment on. The nature of the constructs is emerging, meaning
that according to the nature of the product being developed and related
pre-plannings, the related processes are activated in the setting. For this,
we consider an untouched context (e.g. the commercial aircraft in­
dustry) where different processes are set beside each other and each
event is creating a shift in the nature of the whole context for which a
process(es) is(are) benefitted from to regulate the context (e.g. the initial
setting of this study in 60 s). That, to bring about the expected results (a
commercial aircraft), two sets of processes get involved, among others:
one is related to those creating a specific effect (product developments)
according to the pre-plans and the rest are related to those for managing
unexpected problems, such as changes in the plan, due to resource lacks
for which there is need for a series of corrective actions (e.g. alliancing
for access to resources, new auctions, …). In addition, these events can
arise from both inside the firm (partly intentional) and/or be imposed by
the external context. The interaction of the two requires a streams of
iterations in keeping the firm in line with the related performance
criteria. Over time, the nature of these occasions evolves and in each
iteration different responses, no matter how small compared to the
previous one, are formulated (Dalpiaz & Di Stefano, 2018; Grant &
Verona, 2015; Shi & Prescott, 2011, 2012).
It is worth mentioning that dynamic capabilities are a matter of
conceptualization. While the extant literature distinguishes between
dynamic and operational capabilities, and their in/direct effects on the
firm performance (both mediating and moderating effects according to
dynamism) (Protogerou et al., 2012; Wilden & Gudergan, 2015;
Fainshmidt et al., 2016; Karna et al., 2016; Pezeshkan et al., 2016;
Fainshmidt et al., 2019; Mikalef et al., 2020), the main role of dynamic
capabilities has been addressed in reconfiguring operational capabilities
versus the changing nature of a dynamic context (Pavlou & El Sawy,
2011). How we measure them is based on what the literature suggests:
for dynamic capabilities various indicators have been addressed such as
allocating a new department for activities in a specific context (e.g.
enforcing the commercializing department in Airbus), allocating a new team
or managers (e.g. assigning Warde or Pierson as the head of new commer­
cializing department), different forms of assessments and analyses (e.g.
periodical/on-requirement specifications of work-shares between partners in
various settings), how much previous intangible assets and experiences
are benefitted from in new contexts (e.g. leveraging from prior assets but
modified for new settings), codifications and benefiting from previous
experiences (e.g. things became routinized and faster, additional capacity
releases, etc.), etc. (Eisenhardt & Martin, 2000). These are versus ordi­
nary capabilities defined as routinized and repetitive processes with a
low amount of changes in facing a specified sets of activities (e.g.
Laaksonen & Peltoniemi, 2018). Or as Helfat and Winter (2011) put “an
operational capability enables a firm to perform an activity on an on-going
basis using more or less the same techniques on the same scale to support
existing products and services for the same customer population” (p.1244).
It should be noted that some of capabilities are in-between: while
they have a prominent role as dynamic capabilities, they can play a dual
role and have transitions to operational levels (or vice versa though with
less weight: while some may act as operational capabilities, upon ne­
cessity they change their position and move to a higher level and act as a
dynamic capability in reconfiguring their prior one) (Helfat & Winter,
2011; Kahl, 2014). That, while the extant literature has strictly specified
a series of these capabilities as only operational or dynamic capabilities
(either-or), we basically address a series of processes contributing to
both sets of capabilities. Let us formulate them as capabilities in transition
between second- and first-orders. For instance, assume a specific
department allocated for a series of tasks (e.g. alliancing) which does not
A. Kazeminia Scandinavian Journal of Management 37 (2021) 101137

only handle and is not merely involved in strategic tasks (higher-order Table 1
capabilities), but some employees handle lower-order activities related Table of Events.
to operational capabilities. While a group plays a role in crucial parts Year Internal Events/Forces Environmental Events/Forces
and managing dynamic capabilities, another group handles operational
Initial agreement is reached
tasks. The interactions (upon necessity or periodical) between the two between the French and German
groups can create a joint effect in mounting both operational and dy­ economic ministers, sparking the
namic capabilities in a specific area. Or for instance, the reconfigura­ start of a new project.
tions of current products into new products (R&D) has both dynamic and A meeting occurs between
1967 Germany, France, and Britain. A
operational capabilities inherent to them. Upon necessity or periodi­ memorandum is signed between the
cally, while highly weighted toward dynamic capabilities, there are countries to initiate the A300
some stable procedures/structures shifted into new products (e.g. some aircraft.
coordinating tasks). Although, as Eisenhardt and Martin (2000) put, we Initial planning and design of the Collaborates with Lufthansa and Air
A300 begins. France to design the A300.
have considered R&D, alliancing, and commercializing among capabil­
Limitations to input: Rolls-Royce
ities highly weighted toward dynamic capabilities. declines to produce the BR207 for
It is worth mentioning that precise and coherent data are a necessary Airbus. External pressures:
base for a good academic story. To develop the Airbus story, we Pressure emerges regarding the
collected substantial amounts of data including (1) original available 1968 viability of the A300 as two-engine
300 seat aircraft.
public data from the Airbus website (reports, recorded interviews, and a Internal Change: A change in the
history of Airbus), (2) news, (3) documentaries, and (4) scholarly papers design of the A300 leads to a new
and cases studies already conducted on Airbus. These sources provided aircraft called the A300B.
us with a rich pool of both objective (e.g., data on aircraft, technologies, Alliance formalization: The
formal contract to launch the
orders, and deliveries) and subjective (e.g., reports and available in­
A300B is signed.
terviews) data for our study. After the first round of data collection, we A Separation: The British
followed a snowball approach and looked for additional references Government separates from the
within the data. For instance, in the case of documentaries and scholarly partnership because of the
articles, we traced additional references addressed or cited to comple­ 1969 deviation of the A300B from the
A300 and other internal plans.
ment or cross-check our data.
Alliance recovery: The German
After the two rounds of data collection described above, we identi­ party and Hawker Siddelly [a
fied all of the events, activities, and stages in a timeline that together British partner] substitute for the
describe (form) the growth of Airbus over the period of study (see British Government.
The partners’ stake changes.
Table 1) (Van de Ven, 1992). According to the identified events, we
Legalization: Consortium is legally
started analyzing our data and writing the story of Airbus in chrono­ registered as GIE (Airbus Industrie). Initial orders: Air France places 10
logical order (Pentland, 1999). While writing the story, in some areas we 1970
Airbus becomes an independent orders for the A300B.
faced voids in the data that pushed us to collect new details and increase entity.
the depth of the data around those specific events, particularly in the Spain joins the consortium with a
1971
4.2 percent stake.
case of new technological advances and types of aircraft. To enforce the
The A300B completes its successful
reliability of the data and analysis, we cross-checked the different 1972
first flight.
sources of data available to us for each event (Gibbert et al., 2008). In Lufthansa places its first order (3
addition, it should be noted analyses based on archival data is a fully orders).
Korean Airlines places its first order
established approach (Crook et al., 2006). Also, the author is experi­
(4 orders).
enced within the development of complex products which further hel­ South Africa places its first order (4
ped to have a tangible understanding of NPD and its related processes. 1974
orders).
This made our representation as well as analysis more rigorous: not a Air Inter places its first order (3
representation based on mere abstraction, but an analysis arising from orders).
First A300B delivery to Air France
real contexts. Also, we tried to add as much as data possible to provide a 1975 Indian Airlines places order.
(6 aircraft)
very thorough picture of the Airbus growth to support our claims in this Obtains "ETOPS" permission for the
study. A300B (permission for long-
Having finished the story, we worked to confront and extend (Dan­ 1977
distance trips). Thai Airline places first order (2
Introduces CatIIIA Autoland orders).
neels, 2011) the theoretical model (basically its constructs and the
Technology. The 40th A300 is
relationship between them) and the data. We first benefited from the delivered.
literature to identify the already tested construct indicators in our New Aircraft: Launches the A310, East Airlines places 23 orders for the
theoretical model, especially in the case of R&D capabilities (see a short-range aircraft with 200 A300 (March 1978).
Table 2a). This review provided a tangible understanding of the in­ seats. A Return: The British The need for small aircraft becomes
1978 government returns to the alliance, apparent.
dicators and improved the validity of our analysis. Afterwards, we
obtaining 20 percent of the SwissAir places order for the A310.
carefully checked what the data and the context represented about the consortium. New technological Air France and Iberia place order for
model constructs. According to our data, we came up with the necessity investments are made. the A310.
of adding two more sets of indicators including alliancing and The Oil Crisis occurs, starting the
commercializing based on both the data and the strategy literature (See economic recession. An increasing
1979
need appears for low-cost and
Tables 2b & 2c) (e.g. Protogerou et al., 2012; Mikalef et al., 2020). Also, efficient aircraft.
the context mattered: for instance, in the commercial aircraft industry, Announces decision to build the
each order has significance. Because commercial aircrafts carry people 1981
A320 with 150 seats.
with a high level of risk, there are strict standards and requirements for Receives new orders for the planned
A320.
aircraft and aircraft producers. Each new aircraft must experience
Introduces a new cockpit for the
various tests under varied conditions (e.g., cold weather, hot weather, 1982
A310.
storms); these tests may take more than two thousand hours of flight for (continued on next page)
a new aircraft. As a result, orders can be considered to be a strong

7
A. Kazeminia Scandinavian Journal of Management 37 (2021) 101137

Table 1 (continued ) that the objective nature of the data helped us to minimize any bias that
Year Internal Events/Forces Environmental Events/Forces could arise in the case of subjective analysis and improved both the
validity and the reliability of our analysis (Gibbert et al., 2008).
1983 Uses composites in the secondary
structure of the A310.
After identifying the indicators, we confronted the theoretical model
1984 The A320 is officially launched. with the story. The theoretical model allowed us to focus and avoid
1985 Composite is used in the primary major deviations from the objective of study (Yin, 2003). However,
structure of the A310. although we were primarily focused on the theoretical model of study, in
1987 The A320 completes its first flight.
parallel, we considered any novel insights independently provided by
Introduces Fly-By-Wire.
the data. We were then able to capture or rule out the role of events and
factors except for those identified according to the theoretical model to
ensure the associations between events. After finishing this stage, once
Table 2a the result of this analysis was available, we could move to a higher level
R&D Capabilities Indicators.
of abstraction and look for the underlying pattern of Airbus growth as it
R&D Capabilities (focus on NPD) Data contributed to sustainable growth, addressing the primary question of
Introduce new generation of products Developing the most efficient and our study. In this process, the qualitative nature of analysis pushed us to
(Schilke 2014) economic aircraft in the industry go back and forth between the data and the advancing theory in two
Extend product range (Schilke 2014) Producing a product not only comparable levels of abstraction to develop a satisfactory version of the article.
Enter new technological field (Schilke to the current products but a level beyond
Finally, once the article was finished, we left it untouched for three
2014) them
Identify promising new technologies ( Extending the family of aircraft weeks twice, and after these two gaps, all of the authors independently
Danneels, 2008) Pushing the boundaries of technological reviewed the article one more time and, through discussions, finalized
… advances one step forward the study.
Looking for new engine design
…
4. Data analysis and findings

Table 2b
Alliancing Capabilities Indicators.
Alliancing Capabilities (focus on Data
NPD)
R&D alliance partners are well Task allocations were done according to partners
coordinated (Schilke 2014) technical skills/capabilities
Our work is synchronised with “Each part of A300, each element, its future
the work of our R&D partners flight characteristics, cabin interior details,
Capability to learn from our R&D everything would be studied and tested, complete
partners Schilke 2014) sections of A300 then would then be built in each
…. of European firms participating in the project.”
“I knew it was essential to have the industrial
partners as members of a legally-established
corporation, with a board, a chairman and a
president. Otherwise, nobody was responsible.
“I wanted to use all the available talents and
capacities to their utmost without worrying about
the colour of the flag or what language was
spoken,”
We had the ability to make use of different
experiences, education, ways of looking at things
….
Table 2c
Commercializing Capabilities Indicators.
Commercializing Capabilities Data
(focus on NPD)
Knowledge about its customers and - “I wanted to try to understand what the
competitors. (Danneels, 2016) customers really wanted”
Assessing the potential of new markets. ( Major European airlines were revising
Danneels, 2016) their passenger growth forecasts
Building relationships in new markets ( - Special offers in the US (e.g. leasing
Danneels, 2016) offers)
Leveraging its brand reputation or Building on previous relationships in
company image to new markets ( India
Danneels, 2016) A300 had been the result of a very close
collaboration between the best European
…..
aviation companies
… Period 1: Airbus Spark and Establishment (1967–1977; 1 Cycle)
indicator of a reliable aircraft and aircraft producer. In the case of
technological assets, the advanced technologies had an objective nature
(the number and models) and they were representative of Airbus’
technological growth during this period. Finally, it is worth mentioning
Here, we try to confront our theoretical model with the Airbus an­
alytic story and trace the model within the growth of Airbus (See
Table 1). Looking at the data, three main cycles of new product devel­
opment were realized sequentially related to the A300, A310, and A320.
As can be observed from the data, when Airbus developed a new aircraft
or technological advance, this stock would become a base that Airbus
could build on in the following stages of its growth in the form of (1)
capitalizing and developing its subsequent new products, (2) improving
its current products, and (3) enforcing its position in the market by
obtaining further orders. In addition, regarding the focus of our study in
relation to the strategic growth of Airbus and its technological advances
(please see Fig. 1), we identified three core assets of Airbus and focused
on the growth of these assets over time, including (1) partnership be­
tween parties, (2) the technology developed between partners, and (3)
credibility. However, it is worth noting that when necessary, we
addressed the role of other factors in the chronological growth of Airbus.
Flight was one of the very first dreams of humans: the initial sketches
and hand-made wings by da Vinci in 17th century take us to the first
short flight by the Wright brothers’ initial aircraft in 1903 and then to
the growth of various forms of aircraft over the next decade in Europe
and the United States. Starting in 1913, the aircraft industry flourished
and continued its growth until the 1960s, when the US companies
became the pioneers of the commercial aircraft industry. US firms had
the majority of the market share and, in addition, benefited from over 50
years of uninterrupted experience and advancement. European aviation
companies, however, had been affected by World War II and remained
behind and dependent upon their American counterparts in terms of
technological advances until the end of the 1960s. However, during the
1960s, the idea of Airbus as a potential player in the commercial avia­
tion industry came to life—a player that 30 years later became a pioneer
in the commercial aviation industry and that delivered more than 1000
aircraft over five continents. In the following, we divide the strategic
growth of Airbus (the first 20 years of its life) into two primary periods:
(1) airbus spark and establishment (1967–1977) and (2) technological
advancement and consortium enforcement (1977–1987).
First Cycle (C): the first cycle was the period of A300 design and
production with the purpose of developing the most efficient large civil
aircraft in the industry. In 1967 (the starting point of the cycle), France,
Germany, and Britain brought their complementary/financial assets,
primarily their technological ones, under the Airbus agreement. For the
A300, the partners tried to push the boundaries of technological

8
A. Kazeminia
advances one step forward using the expertise of each party in the
aircraft industry (R&D activities). Each of these parties was specialized
in the production of one part of the aircraft: Germans in fabrication,
British in solid metals/wing, and French in flight deck and control sys­
tems among others. Because they were concerned with the economic
efficiency of the product, the A300 was designed as a two-engine aircraft
in collaboration with Air France and Lufthansa, who would be the final
users of the product. Due to external pressures, such as problems
obtaining the necessary engines or doubts regarding the viability of the
project, the development of an A300 with its initial characteristics was
abandoned. Airbus was forced to change the initial design of its product,
and the new design and advances resulted in the development of the
A300B a two-engine aircraft with 250 seats (1969). However, when the
A300 design was finalized (1969), the product and technological ad­
vances around the product proved to be a source of competitive
advantage and attracted several orders from Air France and Lufthansa
even before the product’s introduction to the market in 1973. Addi­
tionally, after rolling out the product in 1973, from 1973 to 1976, Airbus
pushed to open its position in the market and obtain new orders through
different airshows and direct contact with international airlines (e.g.,
Indian Airlines, African Airlines).
C1 (Alliancing): Airbus as a joint partnership was sparked between
the French transport minister Jean Chamant and the German economic
minister Karl Schiller in 1967 at the Paris Air Show. Alliancing capa­
bilities included the initial negotiations and arrangements related to
bringing financial contributors mainly governments as well as related
designers involved in the development of the aircraft. The fact that
before the 1960s, European aviation companies were doing business at a
national level and it was necessary that the partners put their efforts
together, at an international level, since “without a joint program of
aircraft development and production, Europe would be left trailing in the
wake of the Americans, who dominated the industry – and, with the planned
long-range 747 “jumbo” on the horizon, looked set to consolidate their su­
premacy”. In this line, the three governments signed a memorandum of
specifying the characteristics of the aircraft. The memorandum was “for
the purpose of strengthening European cooperation in the field of aviation
technology and thereby promoting economic and technological progress in
Europe, to take appropriate measures for the joint development and pro­
duction of an airbus” (Airbus Website).
“Only if Europe combined the considerable talents and expertise which
existed in individual companies and nations and put them into one aircraft to
compete directly against the Americans – who held more than 80 per cent of
the world market - could there be any hope of success.” (otherwise neutralize
each other).
The consortium was built on prior relationships at the technical
level. In the case of France/Britain, Beteille (an Airbus founder) already
had constructive relations with British partners in the case of Comet
(another aircraft). He was involved in building friendship! In addition,
the allocation of tasks was done according to the technical capabilities of
partners: 33 France/Britain, 25 Germany work-share. Despite the ar­
rangements, later the British government terminated its partnership
with Airbus with regard to some design changes as well as additional
contracts for a British technical partner: Rolls-Royce. Despite the leave,
the consortium and another British partner (Hawker Siddeley) were
rescued by other partners and finally to enforce the Airbus consortium, it
was registered under the French law as ‘Airbus industrie’ in 18 December
1970. France Aerospatiale and Germany’s Deutsche Airbus (two
remaining contributors) each took a 50 percent stake and it took over 4
years from 1967 to 1971 for reaching to this achievement. Spain’s
“Construcciones Aeronautics” (CASA) later (1971) entered into the
consortium and took a 4.5 percent stake and the responsibility for
designing an A300 horizontal tail. By further delving, the parties became
more experienced in managing the whole alliance, developing their
capabilities, and finding their positions when it was becoming more
stable. As Beteille put “I knew it was essential to have the industrial partners
as members of a legally-established corporation, with a board, a chairman
9
Scandinavian Journal of Management 37 (2021) 101137
and a president. Otherwise, nobody was responsible”. In addition, these
capabilities included managing the related tasks/shares between
partners:
”Although each company in the consortium had its own legal and
corporate identity, each was allocated its own share of work. On the A300B
the French did the nose, the flight deck, the control systems, the lower part of
the fuselage’s center section that housed the landing gear and the final as­
sembly; the Germans did both ends of the fuselage and the upper part of the
center section; the British built the all-important wing box that contained the
fuel tanks; the Dutch did the moving parts of the wing, such as the flaps,
spoilers etc; and the Spanish made the tail.”
And,…“Just as Airbus evolved a new way of making planes, so it invented
a new way of paying its partners/suppliers. It was a system that most out­
siders – and even some insiders – found hard to understand. Payment was
determind not by Airbus Industrie setting a price for the components parts, but
by talking through with the partners what the overall cost of the program
might be, negotiating with them what part each should play, and allocating to
each player an agreed percentage. As the money from sales flowed in, each
partner was then paid according to the formula. That, at least, was the theory.
Task sharing was an important part of the alliance management as well as
managing the legal structure of the alliance. Setting design parameters and
measurements according to Americans as the product would sell in all
continents”.
C1 (NPD/R&D): In the case of NPD, it was the partners’ resources
contributing to the development of the aircraft. Firstly, different part­
ners got different parts and related task allocations were done according
to their technical and design capabilities. French went for cockpit and
control systems, the British partner had the responsibility for wing and
engines, and the German partners were responsible for the fuselage.
Lufthansa and Air France were involved in the design of the aircraft as
Beteillesays, “I wanted to try to understand what the customers really wan­
ted”. This was an action that both would make the product according to
customers’ requirements and effective in keeping them. Airbus started
developing its very first aircraft and took the bold move of designing a
300-seat, two-engine aircraft called the A300. However, its partners and
collaborating airlines doubted whether this aircraft would even be
possible, which put pressure on the entire collaboration. To address the
criticisms, Airbus was searching for a more powerful engine with more
thrust. Airbus negotiated with Rolls-Royce to design and deliver an
engine with the necessary requirements, named the RB207 model.
However, Rolls-Royce was engaged with a more appealing order (the
RB211, an engine with less thrust for an American company), and
stopped the RB207 project. This event increased criticism of the A300
because Airbus no longer even had the necessary engine. Finally, the
criticism pushed Airbus to modify its early plan and shift to a smaller-
size 250 seat aircraft (A300B) that could fly with the current Rolls-
Royce engine (RB211).
Béteille mentions that they had to collect and combine all of the
technological capabilities of their partners. This collaboration could
provide a great advantage because over the years, each of these partners
based on different forms of education had been able to develop unique
technological capabilities to contribute to the aircraft. The initial idea
behind forming Airbus was to benefit and leverage the expertise and
knowledge of the partners and, beyond, to use their synergies for further
technological advancements. Additionally, Airbus was determined to
not to lose sight of the central picture of economic efficiency and being the
builder of “the most economical aircraft”. Because of the Rolls-Royce
leave, they finally adapted an engine from General Electric (CF6− 50A-
American engine) that they planned to produce jointly with a French
company called SNECMA. It is interesting that while Airbus was real­
izing its initial form, the Airbus “fathers” (Beteille & Kracht) were also
considering the development of a family of aircraft as “the future” of
Airbus that would cover all sectors. At that time, they had a very firm
vision of eventually gaining 30 percent market share. On 28 October
1972, the A300 flew successfully for over 1 h and 23 min, and the
concept of the most economical aircraft in the market became a reality.
A. Kazeminia
What made the Airbus system so revolutionary was the idea that the main
parts of the aircraft - the fuselage, the cockpit, the wings, and the tailplane –
should be made quite independently of each other in different places, in
different countries hundreds of miles apart. The concept was that each section
would be as complete as possible with all equipment, controls and cabling
already fitted. And it would only be at the very last moment that the pieces of
what Beteille called ‘Airbus Meccano’ would be brought together for final
assembly.
Moreover, …“French and German type certification for the A300 was
obtained in March 1974. And on 23 May, the first A300 to go into service
made its initial commercial flight from Paris to London for Air France. Its
economy, efficiency and technological standards in comparison to its rivals,
the American tri-jets, were impressive.”
C1 (Commercializing): The first part of commercialization in Airbus
started from the governments’ contribution and the fact that airlines
from these countries were supposed to buy the products by Airbus. In
addition, Lufthansa and Air France were involved in the design of A300
from the early days and the product was being adapted to their re­
quirements in terms of routes in Europe and other destinations. To
achieve this goal, they developed a system of listening to their customers
that helped them to keep their aircraft appropriate for the market.
Beteille also made a trip to the US to get familiarity with the re­
quirements of American airlines industry to adapt the product to that
market. “he knew that if his airbus venture was to succeed, it was essential
that the plane sold in the American as well as the European market”. This
happened in the initial stage of development of A300 which later
changed into A300B. Developed later, Airbus Industrie (the legal struc­
ture of Airbus) also had the crucial capability of “commercial expertise”
for keeping all parts together and delivering the product to the market.
In this period, despite the A300′ s introduction, Airbus had to convince
active airlines that the A300B was one of most efficient and economical
aircraft available in the market. They had to convince customers that
A300 had been the result of a very close collaboration between the best
European aviation companies.
“Another factor, beyond the control of Airbus, contributed to the growing
recognition among airlines that the A300 offered valuable economic ad­
vantages over its rivals. Not only did having one less engine considerably
reduce the capital cost involved in buying the aircraft, but the A300′ s fuel
efficiency became increasingly important as the 1973 oil crisis began to
bite and prices soared.”
During the later part of the cycle, Felix Kracht was assigned as the
head of marketing and in some occasions he personally got into face-to-
face meetings with the committed airlines to finalize their purchases (e.
g., the Reinhardt Abraham of Lufthansa). In addition, A300B appeared
via a very luxury introduction after its development in Toulouse. What
can be seen is that commercializing activities were enforced in the later
part of the first cycle. Later at the end of cycle, the flight of A300B over
three continents (as one of the Airbus managers says “nothing like an
aircraft itself could better sell the aircraft”) and efforts by the Airbus
managers in selling the aircraft such as a special offer in the US (free
benefits with return conditions if the products would not satisfy the
airlines’ requirements) and personal communications such as the orders
got in India could be considered as very hard efforts of Airbus in
expanding its market. In the case of India:
“In the face of fierce competition, Lathière paid a rapid visit to Delhi and
famously played on his Indian heritage – he had been born in the country
and was able to produce a picture of himself as a boy with Ghandi – to
persuade the airline’s president to stick with Airbus and confirm its order
for three A300 s, with three options.”
In this period, George Warde and Krook (from Fokker) joined the
Airbus selling team to develop its customer service and give a more
international view specifically about the US market. Developing the
Airbus customer support system was another important part, which
10
Scandinavian Journal of Management 37 (2021) 101137
according to George Warde, Airbus could not get further orders if this
division would not be developed according to the standards of industry.
“When George Warde first came to Europe to work as a consultant for
Airbus, he told Beteille, ’You should thank God you haven’t sold any­
thing, because you are not ready to support. And if you don’t support you
are not going to be successful because Europeans have a history of not
being very good at support from Rolls-Royce up.’”
Silk Road strategy was another mechanism for entry into the markets
untouched by American producers. For this, Airbus benefitted from local
representatives (e.g. Ranjit Jayaratman) in gaining further orders:
”Just as Marco Polo had opened the way for Europe’s merchants and
traders to central Asia, so Warde wanted to explore the Asian Far Eastern
markets before Boeing work to their potential. What Airbus was looking for
were relatively new entrants to the market with no tradition of loyalty to US
suppliers and relatively rich airlines in areas where traffic expected to
increase.”
In the first cycle, in order to develop the most economic aircraft in
the industry, it was necessary that capabilities be pushed further for­
ward in those areas required to meet the expectations of initial A300.
However, Airbus was endangered since its costs were booming and it
was competing internally with other European aircrafts between the
governments for finance. In this condition, the initial design faced a
crisis and Airbus was given a chance to come up with a solution and for
this the design of aircraft changed from A300 to A300B: Beteille formed
a special design team (called ‘the pirates’) and it had only 6 months to
come up with a new design, otherwise Airbus would be shut down. For
this, in A300-to-A300B some parts such as fuselage, control systems, and
cockpit were (partly) taken from other available aircrafts (e.g. Galion,
Concorde) in the industry while the overall design was still significant
(Brusoni and Prencipe 2001a). Also, when the initial design changed,
engines were also adapted (off-the-shelf) from the currently available
ones (CF-6) in the market. This adjustment made the aircraft smaller and
in line with the standards of industry in that period. In addition, the
technical partners had already worked in other joint programs with each
other that were further facilitating the possibility of such responses to
unexpected occasions. The nature of Airbus as a consortium, a network
structure/a loosely-coupled one (e.g. Brusoni, Prencipe et al. 2001,
Brusoni and Prencipe 2001b), was further providing the possibility of
unexpected responses to different occasions. This issue also was repre­
sentative when the British government left the consortium, several
months after the changes in design, which again was managed by
creating enough flexibility among both financiers as well as partners (e.
g. Hawker Siddeley). Also, in the case of design in order to keep the
product responsive to various occasions, Airbus tried to keep its
compatibility with other aircrafts in the market to facilitate its sales
later:
‘Perhaps the most significant feature of the A300 design’ Flight magazine
observed, is the studied attempt to get maximum compatibility with the Boeing
747 in order to reduce first cost, simplify maintenance and ease problems at
airports. The fuselage cross-section (shape, size and height off the ground) is
similar to that of Boeing’s long hauler, while systems, equipment and servicing
points will in many cases be identical.
As it can be seen all capabilities are contributing equally at a con­
sortium level with a specific evolving development capacity, when in the
initial part mainly the interacting alliancing and R&D capabilities are
taking the major role with regard to the formation of alliance and
designing the first aircraft when airlines (commercializing) are directed
toward the alliance and R&D/NPDs. The fact that the two get a sense/
taste of commercializing while they are leading the way. Although what
customer airlines (Lufthansa and Air France) would want was truly
determining in how the design had to be specified. However, as the new
product is developed, the nature of relationship changes, and commer­
cializing gets a more central role and alliancing and R&D capabilities
become directed toward commercializing (1972/3–1976/7). This is
A. Kazeminia
while the three capabilities are contributing to each other to bring about
the final product, A300B. Also the importance of the evolving capabil­
ities changed over the progress of the aircraft from R&D/allinacing to
commercializing: despite the shift in capability positions at the end of
first cycle, developing new capabilities was still necessary but less/none
in alliancing/R&D and more in commercializing managed according to
the evolving development capacity of the firm. This shift is done by
lessening capability developments in one and developing more from
other capabilities, subject to the overall developing capacity of the firm.
This directs us to formulate, under a highly competitive context (e.g.
Sirmon et al., 2007) including a huge initial investment for developing
an aircraft:
Proposition 1. A: Growing via new large product development, in the first
cycle, all three capabilities contribute almost equally, while weighted over the
progress of the development, the balance shifts from alliancing and R&D to
commercializing capabilities.
Proposition 1. B: Growing via new large product development, in the first
cycle, capabilities grow in an interactive way, while in first part commer­
cializing is directed toward alliancing and R&D, in the later part, the direction
changes toward commercializing.
Proposition 1. C: Growing via new large product development, in the first
cycle, the change in the weight as well as the sequence of capability devel­
opment occurs via developing additional amount of capabilities and/or its
mere distribution versus the firm overall increasing development capacity.
Period 2: Technological Advancement and Consortium Enforcement
(1977–1987; 2 Cycles)
Second cycle: The second cycle of new product development started
during 1976/7, when Airbus identified a need in the market for smaller
aircrafts and started planning its new aircraft, the A310. The A310
would be a mid-range aircraft based on the knowledge built and accu­
mulated around the A300 while, at the same, Airbus would develop new
technologies and components, including a new cockpit system and
composites in the secondary structure of the plane. Firstly, Airbus
leveraged the assets of the A300 into the A310 as part of a strategy that
determined that all products should share a maximum level of common­
ality. Second, the A310 should be more efficient than the A300, and
therefore, the parties developed a new cockpit system and a lighter and
more resistant aircraft. While the A310 was still under design and
development, Airbus was able to obtain over 100 orders after its
announcement in 1978 until the end of 1979, allowing the A310 project
to continue. Additionally, the technological advances developed for the
A310 also helped Airbus to homogeneously improve its current prod­
ucts, the A300 family. During this cycle, Airbus’ position stabilized as
the number of deliveries exceeded 100 until the end of 70 s by benefiting
from various strategies. Airbus also had two products in this period.
Finally and more importantly, there was an increasing number of orders
for both the A300 and the A310, demonstrating the credibility of Airbus
as an aircraft producer.
Third cycle: The third cycle started with the oil crisis in 1979 as an
external shock in the environment that pushed airlines to search for
more economical aircraft while also decreasing their buying ability. This
crisis showed the value of Airbus’ efforts over the last ten years to build
economical aircraft. To respond to the market, Airbus aimed to develop
the A320 as the most economical and fuel-efficient aircraft. Similar to
the previous cycle, Airbus both (1) leveraged the accumulated resources
of its two previous aircraft (A300 and A310) into the A320 and (2)
reinforced its R&D activities to develop the groundbreaking technology,
Fly-By-Wire (an automated aircraft control system). Airbus also devel­
oped new composites for the primary structures of the aircraft, making
the aircraft lighter, able to carry more cargo, and able to use less fuel. It
is worth mentioning that the A320 was selected although there was
pressure from the partners to develop a bigger aircraft, the A330/340,
but Airbus continued its A320 aircraft. Demonstrating its great success,
upon the launch of the A320 in 1984, Airbus had already received over
11
Scandinavian Journal of Management 37 (2021) 101137
80 orders from different airlines such as Air France, British Airways, and
Air Inter. Following these advances, Airbus updated the rest of its
aircraft with the current technology to bring its maximum commonalities
strategy to the center of its growth. In fact, commonalities became one of
Airbus’ dominant competitive advantages as it developed its family of
aircraft (the A310, the A320, and subsequently the A340).
C2/3 (Alliancing): In these two cycles, as it was seen before, the
alliance at a government level became stable in a way that in 1979 the
British government returned to the consortium with 50 billion pounds in
a returnable loan and received back approximately 20 % of the total
stake in “Airbus Industrie” equivalent to the amount it would have as a
partner of the consortium (during the oil crisis). For these changes, the
shares of Germany and France decreased to 37.5 while the share of Spain
remained intact. However, the alliance shifted more toward developing
efficiency with the development of the other members of product family
(A310 & A320). Additional assets related to managing partners were
released for the development of the two aircrafts. In addition, in this
period, Airbus had developed the required capabilities and got enough
credibility such that when the market forced and airlines requested the
development of smaller aircrafts, other aircraft developers started
negotiating with Airbus for joint development programs. That, Airbus as
a newly formed and young consortium, after the first cycle, had become
a potential reliable/viable partner for joint development programs by
the American developers. The first stream of negotiations was related to
McDonnell Douglas for a 200-seat aircraft which did not reach to an
agreement. Afterward, Boeing started negotiating with Airbus for a 200-
seat joint program which remained fruitless: this was because Airbus
was becoming a sub-contractor in the joint program and they preferred
not to join their forces. Also, Airbus on its own started a joint wing
development program for A310 between Germany’s VFW-Fokker and
France’ Aerospatiale where Hawker Siddeley (the A300′ s wing designer)
was invited as another developer. This also resulted in the return of
British Government and its talks with Airbus beside the endeavours of
Boeing in alliancing in Britain for another joint program with the British
party (with British Aerospace). In addition, within Airbus itself, during
these two cycles and various events such as economic recession in late
1970s, there were tensions for managing the partnership specifically
with regard to each partners’ work-share in new technological de­
velopments for A310/20: “Talks over funding and work share agreements
between Airbus partners were complex and prone to delay, conducted as they
were against a backdrop of world recession and the effects of deregulation in
the American airline industry.” (Airbus Website) This also included the
decisions related to selecting the next member of Airbus aircraft family
and negotiations with Douglas for another joint program. Also, there
were changes in management team as well as shake-ups/restructurings
in managing the consortium.
C2/3 (R&D/NPD): these two cycles can be considered as a turning
point of Airbus in terms of new technology development. For instance, a
version of the A300 (A300B4) in 1977 obtained ETOPS permission to be
the first two-engine aircraft to take long-distance routes. However, a new
stream of advancements was launched when Airbus announced a new
aircraft, the A310, a short- and medium-range aircraft with 218 seats in
July 1978. As it was addressed before, composites in secondary struc­
tures, new cockpit, composite in primary structures, fly-by-wire, and
additional design changes were very exemplary and breakthrough in
these periods. Also, there were some joint engine development programs
such as International Aero Engine Consortium for V2500 as well as GE/
SNECMA for CFM56. Airbus, from an early moment, emphasized the
value of composite components because their resistance and lower
weight improved the efficiency of the aircraft. The cockpit is basically
the flight deck and includes the set of necessary controls for pilot. In the
new cockpit, new digital gauges instead of analogue ones were used,
which made it possible to fly the aircraft with only two pilots and
without the need of a flight engineer. Another technology is a computer-
driven digital “fly-by-wire” in which “the deflections of the flying con­
trol surface on the wing and tail are no longer driven by pilots’ controls,
A. Kazeminia
but by a computer which calculates exactly which control surface de­
flections are needed to make the aircraft respond as the pilot wishes”.
With this new technology, the pilots only needed to work with a simple
side-stick control instead of using different control columns. The Airbus
version of FBW was not just a technology that facilitated flight controls
and reduced weight. In fact, it improved the reliability of flights because
it prevented pilots from initiating a sets of manoeuvres outside of the
aircraft capacity. The technology was groundbreaking and shaped the
development of the commercial aviation industry; in the following
years, it became one of the industry standards and one of Airbus’ sources
of competitive advantage. As it was addressed before, most of Airbus
resources were directed toward developing technologies in these two
cycles. As our data shows:
The A320′ s fly-by-wire technology was not only a way of improving flight
controls and reducing weight. It enabled Airbus to take safety to a new level
by introducing the flight envelope protection. Pilots flying the A320 were free
to operate it as normal, but the flight envelope protection prevented the
aircraft from performing manoeuvres outside its performance limits.… A
further advantage which the A320 offered over its rivals was that its cabin
was wider, enabling airlines to install more spacious seats with a wider aisle
(Design A320).
In addition, “Quite apart from its commercial future, there was a lot
riding on the A320. The A300/310 aircraft were, apart from the A310′ s glass
cockpit, conventional enough in the layout and design of their control sys­
tems. With the A320 Beteille decided to play the high-tech card and build a
plane that was as close to the current state of the art as French technology
could make it. His plan was to steal a march on Boeing by offering such a high
level of technology that Seattle’s planes would look instantly old-fashioned.”
C2/3 (Commercializing): in the case of commercializing, Airbus
was receiving pre-orders for the aircrafts that still had not been designed
and were supposed to be delivered in a 3–4 year periods which was a
significant indicator of its growing credibility. On 15 March 1978,
SwissAir became the first airline to place an order for the A310,
including 10 more options. Lufthansa quickly placed an order for 10
A310, and Air France and Iberia were among the subsequent customers.
On 1 April 1979, Lufthansa increased its order to 25 plus 25 options, and
two days later, KLM added another 10 plus 10 options. On 6 July, Air
France raised its orders to from 4 to 35 and in the same year, Martinair,
Sabena, and Air Afrique joined the list. The fact that the Airbus prior
activities in receiving new orders had paid off for these two periods and
Airbus had opened its position in the market, specifically the US market
which at that time was very competitive and only would accept Amer­
ican products. Also, it should be noted that in these cycles SwissAir and
Lufthansa were a part of the design team as well as customers that were
making the product more customer-oriented. Also, in this period, Airbus
again benefited from various leasing offers. For instance, George Warde
moved completely to Airbus Industrie North America in New York and
personally entered into intense negotiations with various airlines to get
the required orders versus the representatives of other developers such
as McDonnell Douglas and Boeing. This was while Warde’s salesmen
were pushing to get orders via the Silk Road strategy in Far East such as
the case of Thai Airlines. In leasing to the Eastern Airline, which later
turned into 23 [(A300Bs) + 9 Options] + 25(A310) firm orders, Warde
offered the following trial to its CEO (Frank Borman):
“You pay for the training. You pay for the spare parts you use and you
pay for your fuel and operating costs but you don’t pay for the aeroplanes.
And then in three months time you have to make a decision and I’ll unwind
the deal if you don’t want it. If you do, we’ll proceed on a firm program .’”.
Later that year in April 1978, the deal became a firm one.
In addition, in the case of commercializing:
"By 1978/79 the Silk Road strategy was paying dividends: among the
countries of the Far East to buy were the Philippines, Malaysia, and
Indonesia: In asia and the Indian subcontinent, there was Iran and
Pakistan. After selling only thirty-eight planes in its first eight years, by the
end of 1979 Airbus had sold 256 planes to thirty-two different airlines
12
Scandinavian Journal of Management 37 (2021) 101137
and was supplying more wide-bodied aircraft than any other manufac­
turer. Measured in dollars, Airbus had captured just over one quarter of
the civil aircraft market. This was a remarkable achievement, something
that no European manufacturer had ever accomplished.”
In the case of further improving the sales team:
“In the year Pierson arrived, Airbus’s record of product support was poor:
when it came to providing spares, training and so forth, it had been voted
the worst of all the manufacturers. Within three years, Pierson claims, it
had so improved that Airbus’s rating was better than Boeing’s. The most
noticeable changes, however, were in the face that Airbus Industrie pre­
sented to the world, particularly in North America, which now accounted
for one-third of all sales. ‘There was a need for a major investment in the
US operations because what we were doing was Mickey Mouse,’ says
Pierson.”
There were also other leasing offers such as the one to Pan Am in
1984/5 as well as negotiations between the US and Europe over the
taxing of aircrafts in this period which also affected some of trade
agreements (e.g. GATT). Finally, when A320 was ready, again Airbus
benefited from a luxury introduction:
“It made its appearance in a cloud of dry ice on St Valentine’s Day, 1987
and was given the traditional champagne send-off by the Prince of Wales
and Princess Diana who were returning from an official visit to Portugal.”
In these two periods, there is a shift on the emphasis placed on R&D
capabilities and that much of the consortium resources are shifted into
these activities, and other capabilities are hugely directed toward the
R&D/NPD. This is because Airbus had got into a state of stability from a
state of flux, the resources being initially used in settling related ar­
rangements were released. The states of asset accumulation became
more advanced (e.g. capabilities as well as products). As Airbus had
made an entry into an already established industry, compared to other
players such as Boeing which already had a range of aircrafts, Airbus still
had to develop a family of aircrafts. According to Danneels (2002)
Airbus had to introduce new technologies, enter into new market, or
enforce current technologies in their current markets. It should be noted
that the efforts related to alliancing and commercializing had paid off
and they were more structured and became routinized (e.g. alliancing
procedures, negotiations, sales team, etc.) than the case of R&D where
the nature of to-be-developed technology was unknown. Since also the
Silk Road strategy was paying-off (already developed/developing mar­
kets), the only significant part in terms of novelty and capability
development was related to R&D. The new parts in alliancing/com­
mercialzing, regardless of the parts that were substantively new (new
markets, new alliances), were addressing the complexities of new
technological advances. That, the nature of alliancing and commer­
cializing were toward developing the new aircraft (A310/20) and they
were being conducted in almost the same boundary of their prior con­
ditions. This was because the context was pushing for more efficiency in
aircrafts that required further investments in R&D for technologies in
line with the overall trend.
In the first cycle, the initial design of the aircraft was breakthrough,
in the second cycle, these were composite materials and a new cockpit
that became very important, and finally in the third cycle the composites
in the primary structure and fly-by-wire technology were very break­
through. As it can be seen the size of aircraft in each subsequent cycle
becomes smaller that is partly because of Beteille’s foresight and partly
the market pressure for further efficiency as well as developing new
technologies. In addition, enough orders were received by the con­
sortium and the partners had a strong basis to rely on for which the
return of British government is representative. This helped Airbus to
further strengthen its R&D activities compared to its alliancing and
commercializing, while the two later activities were still very important
and critical: this is representative in the case of A320 where the devel­
opment investments reached to 1700 million dollars. However, the
A. Kazeminia Scandinavian Journal of Management 37 (2021) 101137

pressure for further efficiency pushed Airbus for further advances. In Table 5
addition, technologies developed in these cycles became very Airbus- Aircraft Characteristics.
oriented compared to the first cycle in which components were being A300 (Initial) A300-A300BX A310 A320
adapted from other products. This included being light and fuel-efficient
1500 miles (7540 km) 4 (9540 km) 5740–6940 km
among other products in the market which also the context was looking 070 nautical miles 5150 nmi (3100–3750 nmi)
for it (Table 5). range
In line with Sirmon et al. (2007), this directs us to formulate that in New Airbus’ A300B Re-designed fly-by-wire, flight
dynamic and competitive contexts demanding for further efficiency, A300 Large featured low fuel wheels with envelope
Design consumption, carbon brakes, protection, a safety
controlling for the events that may majorly shift/interrupt the context: reduced external Better auxiliary system that
noise levels and power unit, prevents the aircraft
Proposition 2. A: Growing via new large product development, after the
highly efficient redesigned back from flying beyond
first cycle, R&D capabilities geta stronger role than alliancing and commer­ operating costs. its performance
cializing. (Table 3) capabilities, a side-
stick
Proposition 2. B: Growing via new large product development, after the Fuselage 6.4 The A300B given the 6.95 m (22.8 ft) 37.6 m (123 ft) long
first cycle, there is an inverse relationship between the size of the whole m in go-ahead by France Shorter than
product and sub-technologies developed in terms of being breakthrough. diameter and Germany at Le A300
(Table 4) Bourget in 1969
would be smaller,
Proposition 2. C: Growing via new large product development, after the lighter and more
first cycle, when new products become smaller, the within-product built sub- economical than its
three-engine
technologies become more breakthrough. (Table 4) American rivals. Its
fuselage had been
The discussion above supports our cyclical model of Airbus’ new
reduced from the
aircraft development as the engine of Airbus growth over the first 20 original A300′ s 6.4
years of its life. The model allows us to move to a higher level of m in diameter to 5.6
abstraction and trace the underlying pattern of Airbus’ sustainable m, its length from
growth over the period of study, identifying how the product develop­ 53.92 m to 48.3 m.
As a result it was 25
ment cycle works as an engine of asset accumulation within Airbus.
tonnes lighter than
the first planned
A300.
4.1. Underlying pattern of airbus growth (2nd-Order) Cabin Béteille ingeniously Shorter Cabin Design A320:
decided to raise the Smaller Cabin,
cabin floor slightly. A further advantage
Incremental Nature of Growth: The findings discussed above This provided which the A320
illustrate the incremental growth of resource accumulation as the dominant enough space in the offered over its
pattern contributing to the sustainability of Airbus’ strategic growth hold to rivals was that its
over the period of study. The incremental growth shows itself first to be accommodate cabin was wider,
standard LD3 freight enabling airlines to
(1) the piecemeal accumulation of different stocks of assets, primarily in
containers side by install more
terms of technological advancements and credibility, and second, (2) side, allowing spacious seats with
not taking large jumps in accumulation, as discussed in the following airlines to increase a wider aisle.
section. the profitability of
each flight by
carrying more cargo
4.1.1. Piecemeal accumulation of resources A New Wing A new wing which A longer wing A new wing
First, from its earliest moments, Airbus managers had the vision of a provided greater lift 219.25 m2
family of products that would cover a wide range of distances and and improved the (2,360.0 sq ft)
different levels of capacity. As the data show, to create this family, each A300′ s performance.
Airbus was able to
period Airbus focused on one cycle of new aircraft and each cycle offered
declare that the
the chance to gradually accumulate new resources in terms of new de­ A300 would climb
signs and technologies. In the first cycle, Airbus took 6 years, from 1967 faster and attain a
until 1973, to have the A300 ready for flight. In addition, in this period, level cruise altitude
Airbus also needed and was able to establish its position in the market as sooner than any
other passenger
a young aircraft producer before further advances. This market position aircraft, giving the
allowed the intense advertisement of the A300 in the market during this cabin crew more
period through different air shows, campaigns and direct visits to air­ time for the in-flight
lines to obtain the necessary orders (e.g., Indian Airlines in 1974, Thai service.
New: A300 was the GE General Electric A pair of CFM
Airlines in 1977, Eastern Airlines in 1977/8).
Rolls-Royce CF6− 50A, built by CF6− 80 or Pratt International CFM
RB207 (to Americans but – in a & Whitney JT9D 56 or International
4.1.1.1. Piecemeal order/delivery accumulation. In 1978, almost 11 be deal insisted upon as Aero Engines
years (a very long period of establishment) after the birth of Airbus and developed) part of the package – V2500 turbofan
with the aid of engines.
when it became stable (in term of the increasing number of orders and
French firm Snecma.
number of deliveries), the company started accumulating new techno­ This engine
logical resources with the announcement of the A310 as a new member produced 49,000 lbs.
of the family. In fact, during these years, the delivery of over 40 A300 s of thrust, as
gave Airbus the chance to accumulate enough knowledge and techno­ powerful as
anything else on the
logical resources to move to the A310. Their planning was timely in market, yet it was
terms of Swiss-Air’s and Lufthansa’s need for smaller aircraft flying more economical.
shorter routes. As discussed previously, for the A310, Airbus increased (continued on next page)
its R&D activities and started accumulating a new stream of

13
A. Kazeminia Scandinavian Journal of Management 37 (2021) 101137

Table 5 (continued ) period, under the umbrella of the A310, Airbus was able to develop a
A300 (Initial) A300-A300BX A310 A320 new cockpit and composites that permanently contributed to the sec­
ondary structure of the aircraft. Finally, the same pattern of incremental
300-seat A300 250-Seat A300B1 224 Seats 164 seats
Large 270-Seat A300B2 130 to 170-seat
asset accumulation can be observed in the case of the A320. When
design Previous engines Airbus announced the A320, they had sufficient orders for the A310
2 engines (current design), (over 100 at that point) and, in addition, there was a clear need for more
(New Smaller design fuel-efficient aircraft. Similar to the previous cycle, under the umbrella
design)
of the A320, Airbus developed additional new technologies (FBW) over
almost 4 years (from 1983/4–1987). Upon announcement of the A320,
technological resources to push the boundaries of technological advance Airbus had already received over 80 orders for this planned aircraft,
one step forward. It took Airbus 5 years to introduce the A310, from its showing Airbus’ credibility and stable position. In fact, each cycle of
announcement in 1978 to its first flight and delivery in 1983. During this new product development became the basis for the piecemeal

Table 3
Airbus Development Cycles.
Cycles Alliancing NPD Commercializing

Arrangements with Lufthansa and Air France

Negotiations between Governments Design Activities (Initial design, Facing
Involving them in Design
(1967) Criticism, Design Modification,
Market condition was changing (looking smallers)
Signing the memorandum (Sept., 1967− 1979), All engines would be fine
Cycle 1 Major European airlines were revising their passenger
1967) SNECMA/Rolls-Royce/Hawker Siddeley
(Initial) growth forecasts and that a 300-seat A300 was in danger of
Launch agreement (May 69) A family of aircraft covering all sectors.
67¡70 being too big for the market
British government leave A300B featured low fuel consumption,
In the US: visiting U.S. airlines like United, TWA and
Alliance recovery (1969) reduced external noise levels and highly
American (contribution.des)
Alliance legal structure efficient operating costs
First order: 3 September 1970
Establishment Alliance formalization (18 Dec.
(A300B) Cycle 1 1970)
Product testing Design to sell
(Middle) Forming the right governance
Flight test, introductions (1972) Product Introduction (28 Oct. 1972)
70¡73 structure for the Consortium
(“Airbus Industrie”)
The subsequent orders (74/77)
Planning for the product family Further selling activities
Cycle 1 Getting further support for the
Minimizing production Flight over three continents
(End product from the governments
French and German type certification for Personal contacts
74¡77 (finance)
the A300 was obtained in March, 1974 Leasing contracts + options
Marco-Polo Strategy
Negotiation with McDonnel
Douglas for joint program of 200
seater DCX200 (1976) A310 (2-engine aircraft)
Design with SwissAir & Lufthansa
Negotiations with Boeing for a Mid-Design (1978)
Cycle 2 Additional orders for A300B
Joint Program on developing small A New Wing Design Program (VFM
(Initial) More aggressive entry into the US market
size aircrafts(1976)/200 Germany and France AeroSpatiale- joint
1976/7 Negotiations with Texas-based Western Airlines (Sept.
Managing Task-Sharing between program in Bremen for A310
1976)
partners Hawker Siddeley for A310
Joint wing development program
(Fokker and Aerospatiale)
Negotiations with Eastern Airline (fly and try: 4 A300B for
Not getting into Airbus would have
6 months; April 1978)
political side-side-effects for Britain
Politicians negotiations over tax in the US
The return of British Government
Massive order by Eastern (Mar.)/providing finance
Cycle 2 (24, Oct., 1978) Composites in secondary structures
Demand was growing for a new short- to medium-range
(Middle) Boeing’s Negotiations with the Improvements in components
150-seater aircraft which could be used to match capacity
British party for a joint-program
to demand more flexibly.
the future of Europe’s civil
Looking for various trends in the market.
aerospace would matter
Technological Looking for orders in Middle East after the oil shock
advances Pre-orders for A310 (1981)
Cycle 2
Task-Sharing between partners New cockpit (1982) Marco-Polo Strategy (Cont.)
(End)
Negotiations for further orders
A320: Smaller design (1983)
Task-Sharing between partners (e. $1700 million (the huge amount of Unsatisfied need for 150–170 seat planes/need for further
Cycle 3
g., design, production sites) increase in R&D investment for A320) efficiency/50–70 billion market size
(Initial)
Restructuring after the return of International Aero Engines Consortium Pre-orders for A320 (1982)
1980
British government for V2500 25/Air France +25 options
GE/SNECMA for CFM56
Selecting top-management
Leasing to Pan Am (1984/1985)
Cycle 3 (Pearson for the consortium)
Increasing market demands
(Middle) Shake-up in the Airbus Composites in primary structures (1985)
Improving product support
1984 organization/restrucuting in Airbus
Benefiting from local sales team (the US, …)
(Shafler left)
Negotiations with Douglas for a
Cycle 3 joint program for the following The A320 was presented publically for the first time at a
(End) family member product Fly-By-Wire (1987) special ceremony in Toulouse, France, where the jetliner
1987 Discussions over the next aircraft was “launched” by the Prince and Princess of Wales
Task-sharing between partners

14
A. Kazeminia
Table 4
Inverse association between Cycles and Product.
A300/A300B (Large) A320 (Medium-size) A310 (Small)
Cycle Initial design/large
1 design (break-through)
Benefitting from market
Cycle Composite materials
2 (break-through)
Mid-size design
Cycle Fly-by-wire (very
3 break-through)
Small design
accumulation of new technologies under the umbrella of a new aircraft.
4.1.1.2. Outcome. The outcome of Airbus growth, in addition to its
technological advancement, can be traced through the number of de­
liveries over these years. Graph 1 shows how the number of Airbus
deliveries grew incrementally from 1973 to 1987. Over 20 years (the
period of our study), Airbus introduced three new aircraft (with several
different options) plus a significant number of groundbreaking tech­
nologies. In the early period, Airbus was not known in the market and
only produced one aircraft (A300) [1973–1976]. The intensive market
activities of Airbus resulted in a significant number of orders in 1978 and
1979. In the second cycle, when the A310 was added to the family of
products, Airbus had two aircraft (A300 and A310) and was providing a
wider range of options (graph 1). The total number of Airbus deliveries
continued increasing because of their wider range of efficient aircraft,
which could help airlines compensate for the oil crisis and the general
economic recession. This increase repeated one more time as part of the
third cycle, when the A320 was also added to the family of products,
providing Airbus with 3 aircrafts and a wider range of options. Although
the period of our analysis does not cover the third and fourth decade of
Airbus’ life, in 2003, Airbus passed its primary competitor Boeing in
terms of orders and deliveries and became a pioneer of the commercial
aircraft industry in terms of market share.
4.1.1.3. Technological advances. In the first period of Airbus growth
(the initial 6 years), the resource stocks of Airbus’ partners were used as
the basis for the initial technological advancements. During this period,
using the R&D capabilities of its partners, Airbus advanced and
improved the technological stock of its partners to a higher level to roll
out their first aircraft, the A300. In the subsequent stage, once the A310
was selected as the next product, Airbus’ R&D capabilities helped to
reconfigure and leverage the knowledge accumulated from the A300 to
the A310 while simultaneously helping Airbus to develop new
Graph 1. Number of Deliveries.
15
Scandinavian Journal of Management 37 (2021) 101137
technological advances for a more efficient aircraft. These technological
advances allowed a more complex and sophisticated aircraft. In fact, the
A310 shared a set of characteristics with the A300 while also including a
new cockpit system and more composites in its structure. A similar cycle
was realized in the case of the A320, when the accumulated knowledge
from the A310 was leveraged into the A320 while new additional R&D
activities also contributed the groundbreaking fly-by-wire. Although
technological advances took a central role in all periods of Airbus
growth, in the second decade of Airbus life (1978–1987), R&D took a
dominant role in that all Airbus asset stocks concentrated around these
advancements. After the introduction of the A320, because Airbus relied
on a commonality strategy, these stocks became the primary source of
Airbus competitive advantage in the following years. In fact, in 2014,
FBW is still one of the standards in the commercial aircraft industry. The
discussion provided here supports the theoretical model provided in the
second part of the study.
4.1.1.4. Credibility. Credibility was one of the assets indicated by our
analysis of the data. Credibility, in fact, was one of the primary accu­
mulated stocks contributing to the sustainability of Airbus (competitive
advantage) in different stages of its growth. The initial level of Airbus’
credibility came from its partners, who represented the best European
players in the aviation industry. However, these players were not known
as part of the Airbus collaboration. Airbus started to build and accu­
mulate its credibility more significantly with the initial order from Air
France and the subsequent order from Lufthansa. As Dierickx and Cool
(1989) state, credibility is a strategic asset that should be built and
accumulated over time, and it is not available to the firm in a strategic
factor market (Barney, 1986). After the two initial orders, the first flight
of the A300, the additional orders, and the unique features of the A300
itself contributed to the credibility of Airbus as an aircraft builder. The
first flight of the A300 was an impressive event in front of thousands of
guests and was followed by the spontaneous flight of the A300 over
Africa, Latin America, and the United States. In fact, the A300 had
unique features, most importantly, efficiency. However, given the na­
ture of aircraft and the time needed to acquaint customers with the
product, Airbus still needed the time provided by the additional orders
received in 1977 and 1978. This credibility contributed to Airbus’ sta­
bility during the first decade of its life and committed the partners to
further R&D activities during the second decade. The return of the
British partner with a 50 million pound investment is one of the major
events demonstrating the increasing credibility of Airbus as an aircraft
producer in the late 1980s. In the second decade, the introduction of
new aircraft (A310 & A320) and several ground-breaking technological
advances additionally supported Airbus’ reputation as a reliable player
in the market and allowed Airbus to obtain a significant increase in the
A. Kazeminia
number of orders from 1978 to 1979 and 1987–1990.
4.1.2. Not taking large jumps in resource accumulation
Another indicator demonstrating Airbus’ incremental approach can
be demonstrated by the fact that Airbus did not take very large jumps in
its asset accumulation.
4.1.2.1. Product Downsizing/Benefiting from current available
components. The first occasion on which Airbus declined to take a large
jump dates back to the initial design of the A300. In fact, the A300
significantly shifted the current norms of aircraft design (300 passenger
aircraft with 2 engines) and so faced pressure from airlines and even
partners about its viability, which resulted in the separation of the
British from the consortium. The pressure and the lack of a planned
engine finally stopped Airbus from further developing the A300 using
the initial design and pushed it to modify and pursue the A300 for 250
passengers using engines available within the market (off-the-shelf). As
discussed earlier, these changes were not problematic, they were posi­
tive because the demand for large-size aircraft was diminishing and the
initial A300 design could have faced problems that would have affected
Airbus’ growth. In addition, the smaller size of the aircraft lowered the
risk of project failure.
4.1.2.2. Patience/Establishing current products. The second indicator of
this avoidance of large jumps can be observed when Airbus started a new
cycle. Airbus did not jump quickly from the A300 to the A310, but
maintained the accumulation of resources with their current A300,
waiting 9 years to pursue the A310. In the case of the A300, once they
developed the A300B, they developed several similar derivatives such as
the A300B1, A300B2, and A300B4, which had very minor differences
from the A300B but varied according to the specific need of the airlines,
for example in the internal design of the aircraft such as the number of
seats, their locations, etc.
4.1.2.3. Going for small products. The third indicator is evident in the
selection of each new aircraft. For example, in the selection of the A320
versus the bigger A340, Airbus pursued a smaller aircraft because it
included a lower level of risk and they could accumulate the related
resources in a shorter period of time. The A340, as a wide-body aircraft
with a carrying capacity of over 380 passengers, would be a very large
jump for Airbus, which had been producing aircraft with a maximum of
270 passengers. This jump would change all of the relevant designs,
would not allow for technological advancement, and would made it
impossible for the firm to fully benefit from its previous assets. Pursuing
a smaller aircraft allowed Airbus to develop more new technologies and
commonalities that could be applied to the subsequent A340 and smooth
its development. As Beteille describes:
“As far as I was concerned there were two elements, one being the market
needs, which was for an A320 earlier than a A340; and secondly for the
technical reason that, having to make a significant step forward in tech­
nology, like fly-by-wire, it was considerably easier and less risky to enter
the field with a smaller aircraft than with a big, long-range aircraft.
Correcting a mistake is much cheaper, and the accumulation of experi­
ence is faster with a smaller, short-range aircraft which makes many more
flights and is used in larger numbers than the long-range. There were some
divergent ideas within Airbus, but the final decision to go for the A320
was a smooth one.”
Decision-Making: When it comes to addressing the nature of
various choices in Airbus, despite different parties in the consortium
were following different interests, keeping the main purpose of building
the most economic aircraft in the industry was a directive simple rule for
developers to formulate their minds around it. This, in addition, had put
Airbus and its forming parties’ choices according to the overall effi­
ciency trend in the industry. For instance, in the case of A320, despite
16
Scandinavian Journal of Management 37 (2021) 101137
some showed an interest for a larger aircraft A340 according to their
flights’ demand, finally a smaller aircraft was chosen. In spite of various
interests by the involved partners, still the overall economic efficiency
and the consortium profitability was being sought among the Airbus
decision-makers. This further supports the results of our study as a
success story and controls for other explanations (e.g. non-aligned
parties’ interests) that still profitability/commercial choices were
being made: we formulate it as going for what is right. For instance,
‘As Adam Brown, the former Vice President-Customer Affairs Directorate,
put it: “An element of Airbus policy right from the start has been not to
incorporate new technologies for their own sake but to carefully select
meaningful applications which produce clear pay-offs in safety, opera­
tional capability and profitability benefits. This approach enabled the
A300, when it entered service, to offer airlines a 20 per cent saving in
direct operating costs per trip relative to the competing tri-jets.”’
Or in the case of Fly-by-Wire, ’Fly-by-wire technology has allowed
Airbus to develop a true family of aircraft through the highest degree of
operational commonality. …., These were bold and imaginative advances, but
once again it was innovation not for its own sake but in order to deliver
concrete economic and performance benefits: reducing an aircraft’s weight
would mean better fuel efficiency.
In addition, after the first cycle, within the consortium with different
capabilities, a series of procedures had already become routinized which
had given a structure to decision processes, policies, etc: for instance,
Airbus became more relaxed in this period in forming (new) alliances.
This also had given a choice boundary in asset accumulation, within
which, the parties formulated their development tasks. This was giving a
cohesion in decisions which were partly directed by both the efficiency
requirement of the context/the competition between players as well as
the internal efforts of parties, being improved iteratively in different
occasions in terms of alliancing/R&D/commercializing and represented
in the overall approach of Airbus in developing its products (Krishnan &
Ulrich, 2001; Thomas, 1984). For this, to further align itself to its
context, Airbus capabilities were improved via (1) annual plannings/­
cyclical planning, (2) benefiting from consultants/experts for evaluating
the consortium, (3) acting upon events such as decrease in sale/the start
of a new cycle/oil price shocks/negotiations for joint programs (e.g.
with Boeing)/work-share negotiations/rearranging parties/getting
additional finance/intensifying R&D for pioneering the technological
advances/enforcing its sale team in the case of need for additional
orders/or benefiting from a new (fresh) management by bringing new
ideas to a specific division (e.g. Pierson).
Despite being initiated in 60 s, on average Airbus shows the char­
acteristics of a recent (current-era) case, which is because of the huge
amount of investment and advanced technologies within the program.
First of all, Airbus required a consortium as the basis of product devel­
opment and that all partners (developers, customers, suppliers, gov­
ernments, …) were involved in decision-makings. In addition, Airbus
benefitted from a very modern legal structure (GIE) giving a high level of
flexibility to its (technical) parties in running the program internally
between themselves, while the management at top (e.g. Beteille) had
enough directive control over various critical issues: how to conduct
work-shares between partners, how to develop the aircraft, etc. This also
shows itself in negotiations with governments/financiers in keeping
Airbus during the initial period. For instance, in the first cycle Henri
Ziegler (an Airbus manager) had a directive talk with the French gov­
ernment to keep Airbus as a more viable program versus other aircraft
developments in Europe during the changes in the initial design, or
negotiations for getting further finance when the sale dropped due to the
economic recession in mid 70 s in the commercial aircraft industry: over
20,000 workers were involved in the program, it was necessary for
Airbus to ignite its sales, and they kept going until the commercializing
problem was resolved.
Finally, regarding the pressure from the financiers and other
A. Kazeminia
programs, Airbus tried to accelerate its growth as much as possible.
However, it still waited until it was able to get enough orders to start its
following cycle supporting our results on the gradual accumulation of
assets. Airbus put a lot of efforts to keep the pace in an acceptable range
by not letting it to go that up, or fall down completely. Specifically this
was because of the period without an order (4 years). Despite not having
orders and no financial turnover, it still had to keep its activities at a
minimum to be able to enter into the next cycle. In this condition, Airbus
had to deal with both the internal restrictions on managing the alliance
in getting required funds from the involved governments and developing
new products as well as handling the industry’s pressures, the market
requirements, and contextual changes (e.g. oil crisis and economic
recessions).
The pattern can be observed in the following cycles in Airbus, for
instance Program A320:
“In the aerospace business, luck is every bit as important as judgement.
And the prize always go to the swift: there are many examples of the
tortoise overtaking the hare. As Harmut Mehdorn observes, ’It’s not speed
that the aircraft industry demands. What matters much more is doing it
right first time. If you get it wrong, it’s very difficult to change it. If you get
it right, six months either way doesn’t matter that much.’ But in the case
of the A320, what might be called ’Mehdorn’s law’ was stretched almost
beyond breaking point. Promised for 1982, the A320 was not launched
until 1984, did not fly until 1987 and did not enter service until 1988. In
the interim both Boeing and McDonnell Douglas had made their bids for
this sector of the market. As the delays to the A320 program lengthened,
so anxieties at Airbus Industries mounted. At the time, no one could have
imagined that the A320 would go on to be far and away the consortium’s
most successful plane.”
Proposition 3. A: Growing through several cycles of new large product
development, both internal as well as external forces contribute to a firm pace
of asset accumulation.
Proposition 3. B: Growing through several cycles of new large product
development, both intentional pace-setting as well as external/internal re­
strictions specify a firm pace of asset accumulation.
Commonalities: Maximum commonality was one of the central stra­
tegies behind the Airbus growth. Commonality basically means that for
each product the firm develops new technological assets and designs,
and when additional new products are developed, the new technological
assets specific to new products are fed back to previous products. The
firm usually develops and holds a portfolio of products that over time
feed to each other. First, in the development of new aircraft, Airbus
capitalized on previously developed technologies while simultaneously
improving their new technologies. As Table 6 shows, each new aircraft
provides a point of connection between the previous and the subsequent
products. The commonality strategy started with the development of the
A310 based on the previous knowledge from the A300 family while also
adding new features and innovations to the aircraft. Airbus additionally
updated the A300 family with the new A310 technologies, primarily the
new cockpit, in 1983. In other words, once Airbus had a significant
technological advancement, it updated its existing aircraft with the new
Table 6
Airbus Technological Advances.
Product Features New features
A300 Initial design
A310 Derivative of New cockpit
A300 New control system
Complete use of composites for the secondary
structure of the aircraft New size
A320 Derivative of Use of composites in the primary structure of the
A310 aircraft Fly-By-Wire New size
17
Scandinavian Journal of Management 37 (2021) 101137
technologies. In fact, incremental asset accumulation and commonal­
ities became the cornerstone of Airbus success because all aircraft had
the maximum level of commonality. The commonality strategy flour­
ished with fly-by-wire at the introduction of the A320. Regardless of the
size or weight of the aircraft, fly-by-wire became a central concept in the
entire Airbus family.
It should be noted that the commonality strategy was in line with the
Airbus family approach:
“Roger Beteille and Henri Ziegler had been convinced that the only way
for Airbus to survive and prosper was for the consortium to follow Boe­
ing’s example and build a family of aircraft to cater for every sector of the
market. ’We were most anxious to develop a family of aircraft,’ says
George Warde, ‘that would give people options right through the range.
Also, the question of commonality was very important. Training, spare
parts and ground support equipment are all very expensive and if these
things were compatible it would save money and help keep customers.”….
And it was not until mid-1975, eight years after the Airbus idea had taken
shape and five years after the creation of Airbus Industrie as a formal
entity, that the supervisory board formally endorsed the Airbus family
idea. It was perhaps the most critical decision in the history of Airbus. ‘At
the beginning, very few people apart from Henri Ziegler, Roger Beteille
and one or two of the industrial people realized you could not survive on
one aircraft; that if you were going to be successful, you would have to
have a range of aircraft,’ says Bob McKinley, former managing director of
British Aerospace Commerical Aircraft, who became a member of the
Airbus board when Britain rejoined in January 1979. ‘If it was a failure,
one aircraft type was enough; if it was a success, one was not enough.’
As it was noted the commonality strategy started from the second
cycle/product (A310), when the initial design of A300B was available in
the first cycle. However, there were different forces affecting this
strategy (Table 1). In the second cycle, an economic recession pushed
airlines to hugely reduce their costs which had affected aircraft pro­
ducers for a higher level of efficiency and directed them in selecting the
types of technologies for development. Firstly, smaller planes (200 seats)
became a priority according to the overall Beteille’s family plan as well
as requests by Lufthansa and SwissAir for smaller and more fuel-efficient
aircrafts. This additionally would respond to routes in Europe. Secondly,
making the aircraft lighter via composite materials as well as benefiting
from only two engines (against the three-engine standard of that period)
to reduce weight were put forward as the required technology for A310
in this period and accordingly A300BX was updated. With this, Airbus
was forming its commonality. In the following cycle, the market pres­
sures increased hugely with the oil shock in the context requiring further
efficiency for which composites in primary structure and fly-by-wire
were introduced for the smallest of family A320 (150 seats) and the
rest of family (A300B and A310) were updated. This basically shows
how the internal planning by Beteille as well as the requirements of
customers and markets were directing the commonality strategy.
The commonality strategy was another factor affecting the selection
of product within the Airbus product family. Under the commonality
strategy regime, the selection of a product over another, could directly
affect the nature of products’ family and technology strategy based on
the components/technologies developed in the product of a cycle. Each
product has different characteristics and its development and related
sub-components/technologies require different sets of development ac­
tivities. For instance, selecting A320 over A340 with regard to the Airbus
commonality strategy, directed the whole family of products toward an
A320-driven technology and not the ones which could have been
developed based on A340 (if it could be developed). Additionally, this
affects the nature of a firm technological basis such as required pro­
ductions sites, and developments in suppliers, etc. It should be noted
that in making such selections, very significant steps violating the
industry’s standards as Airbus experienced in the first cycle, faced crit­
icism both in terms of receiving finance from financiers as well as the
A. Kazeminia
competition from other products in Europe and the US. Although, the
product (A300) could be feasible if component developers would push
further the related technological boundaries and more finance would be
available.
One of the key issues is related to the nature of between-cycle pro­
cesses required for leveraging assets from one cycle to another. It can be
seen that selecting a smaller product (going from A300 to A310) also
provided the possibility of further improving down-sizing processes both
in terms of between-cycles asset moving/coordination as well as its interac­
tion with the smaller size product design processes. That, in the same way
that the required components became smaller in the following products
(in the initial cycles), the in-between cycle moving processes in parallel
became more controllable providing the possibility of further improve­
ment/enriching (we call this down-enriching level 1 [from A300 to A310]
and down-enriching level 2 [from A310 to A320]): this requires compressing
the current components such as wings, fuselage, control systems, etc. in a
lower space in parallel with a series of new developed parts into a smaller
aircraft in going from A300 to A310 and to A320). This meant that moving-
asset processes between different cycles 1–2 and 2–3 sequentially
became easier and were further facilitating a reliable development and
this moving had been framed according to the possibility of development.
Also, these (improving) processes were important versus the to-be-
developed aircraft. Once they became expert in these in-between pro­
cesses, they moved to larger products in the following cycles. One
example is the case of A310: going for options such as fitting fewer sits in the
plane instead of designing a new wing, or playing with various options for the
wings among others.
For instance, in the case of A310:
“Jean Roeder says: The A310 is a program of very great significance for
Airbus Industrie for two reasons. Firstly, it was the beginning of family
development. We showed the world that we were not sitting on a nine-day
wonder, and that we wanted to realize a family of planes. Secondly, with
this aircraft we won over customers we wouldn’t otherwise have won. The
A310 supplied us with a starting point for the A300− 600 we would never
have had without it. The A300 was gradually developed from the B2 to the B4
with its heavier weight and further range. But these versions still had the
systems and the technology of the A300. What the A310 gave us was new
systems technology, the efficiency and the productivity of the ’glass cockpit’,
and a new fuselage tail with a smaller elevator. All this helped us to modernize
the A300 to become the A300− 600, but I don’t think it would have been
possible without the A310. The A300− 600 got the A310 s shorter fuselage
tail and two-man cockpit. With the new tail we could lengthen the cylindrical
part of the fuselage, to accommodate 15 more passengers without increasing
the overall length of the fuselage. And when GE brought a new generation of
power plants on to the market, there was a big saving - some 7% - in fuel costs.
So now we had two lanes that had a great deal in common as far as systems
and cockpits were concerned.“
The gradual pace of managing the family of aircrafts matches the
firm commonality strategy. The graduality provides the possibility of a
comprehensive update in all aircrafts. It provided a higher degrees of
freedom for additional experimentation and making related adjustments
within the related group of products. This provided the possibility of
responses on related market shifts and changes: in the presence of sig­
nificant shifts in the context, the approach was a better one in making
adjustment by providing enough resource/capacity buffer to respond.
Although, Airbus benefitted from items such as developing several new
wing designers (Fokker/Aerospatiale) in hedging versus a single developer in
the 2nd cycle; with regard to the timely planning of and selecting A310 as a
smaller-size aircraft in meeting the requirements of SwissAir and Lufthansa
(among others).
In the same line, when it comes to addressing the Airbus technology
strategy (in the initial cycles) and its gradual approach, it can be noted
that an increase in the number of different products, in parallel with an
increase in the total amount of assets, increases the level/amount of
component commonality. One key point is related to the relationship
between the commonality strategy (increasing the number of products)
18
Scandinavian Journal of Management 37 (2021) 101137
and decreasing level of costs: that, the additional number of cycles
brings about new products in cumulative manner as well as an
decreasing level of costs with regard to the highest amount of economic
efficiency. However, with an increase in pace follows an increase in
related costs handled by breaking the components over several cycles
with an appropriate rhythm from 6 to 5 to 4 (e.g. Hashai et al., 2018 in
the context of alliancing). The second issue is that with new cycles there
is an increase in the amount of variations/deviations for a product group
from one product (e.g. A310) to another (e.g. A320): the amount of
commonality increases versus characteristics’ differences between
different products (Itami & Numagami, 1992). In this condition, the
nature of specificities (deviations between products) in interaction with
the overall product group, in each cycle, affects the nature of products
being developed with regard to the efficiency criteria. The gradually
approach, for instance addressed as ‘minimum variations’ between
different products’ derivatives in initial cycles and under severe condi­
tions, was a solution providing the possibility of responding to the con­
textual/customers’ requirements.
Finally, the commonality strategy allowed Airbus to efficiently capi­
talize on its assets for each new aircraft. First, commonality provided the
basis for development and allowed Airbus to benefit from economies of
scale. Second, commonality also was helpful to benefit from economies
of scope as a basis to expand the Airbus family of aircraft. This foun­
dation accelerated the rhythm for the introduction of new aircraft in the
following years (cycles shortened from 6 to 5 to 4 years sequentially for
A300B, A310, and A320). In fact, the concept became one of the primary
sources of Airbus competitive advantage, and it was very difficult for
other players to imitate Airbus. Third, the commonality strategy was not
only helpful to Airbus but was helpful to its customers as well. Large
airlines such as Air France and Lufthansa had a broad portfolio of air­
crafts. The airlines could plan and utilize their aircrafts according to
their periodic forecasts of market demand. Because of the commonality
between different Airbus aircraft, airlines could jump between these
aircrafts, particularly in the case of pilots and cabin crew, to respond to
changing market demand. This flexibility additionally led to consider­
able reductions in the time and costs involved in training pilots and
crew, positively contributing to the airlines’ cost efficiency and plan­
ning. We call this relational commonality (Fig. 2).
Proposition 4. A: Growing through new large product development, after
the first cycle, both internal and external forces affectthe direction of com­
monality strategies.
Proposition 4. B: Growing through new large product development, after
the first cycle, both intentional planning and pace-setting as well as external/
internal restrictions specify the direction of commonality strategy.
Proposition 4. C: Growing through several cycles of new large product
development, commonality strategy is more valuable as a source of compet­
itive advantage, when it creates impact on both the focal firm (e.g. Airbus)
and its customers (e.g. SwissAir).
5. Discussion
Our study contributes to several streams of studies in the strategy
literature. First of all, once prior studies address gradual accumulation
(e.g. Brown & Eisenhardt, 1997, Sastry, 1997; Ugur et al., 2016), we
extended the field by addressing different types of gradual accumula­
tions according to the types of capabilities including alliancing, R&D,
and commercializing (Danneels, 2008; Eriksson, 2014). In our Airbus
case, we showed how in the first cycle all capabilities had to be both
valued and directed according to the nature of the very first vulnerable
product, but in the following cycles there was a shift on the emphasis
placed on a specific capability (e.g. R&D as a primary), while other ones
also had to become more advanced (alliancing and commercializing as
secondary). The point can be seen by the return of British government to
the established consortium in a way that it would attract new partners as
A. Kazeminia
Fig. 2. Airbus Growth Map.
well as new orders on its own, and parties’ leave or orders/their finan­
cial support would had become a less of concern in the second cycle.
That, alliancing and commercializing capabilities had passed their time
of crisis when they were hugely distressed firstly because of the British
leave and secondly in getting additional orders at the end of first cycle
when they were experiencing a milder condition. However, in that
period, there was pressure for efficiency that was hugely pushing the
Airbus R&D capabilities (Prieto et al., 2009). With this, additionally, our
study provides an empirical representation and extends the literature for
a cyclical form of dynamic capabilities (Helfat & Peteraf, 2009).
The results of our study on gradual accumulation is also elaborative
in similar programs in the commercial aircraft industry for instance in
the case of Boeing Dreamliner 787 where the program faced problems
and had major delays in delivery:
“Jim McNerney, Boeing’s current CEO readily admitted Boeing’s diffi­
culty in executing its chosen strategy and noted:‘But we may have gone a little
too far, too fast in a couple of areas. I expect we’ll modify our approach
somewhat on future programs—possibly drawing the lines differently in
places with regard to what we ask our partners to do, but also sharpening our
tools for overseeing overall supply chain activities.’ (The Boeing Company,
press release, 2008)” (Kotha & Srikanth, 2013)
We extended the literature by showing how graduality shows itself
with a different pace in different capabilities and the pace changes in
different cycles according to the types of capabilities. The fact that when
the overall cycle feels gradual (6 + 4 years, the initial), there is still
slowing-down and speeding-up in accumulation for instance when
alliancing slows-down in design and accelerates in commercializing, but
the overall (increasing) pace is still constant. This graduality both showed
itself in the first cycle when accumulation was driven by all three ca­
pabilities while alliancing and R&D were more central at first, and once
these activities had come to a closure for the first product they cooled
down, and it was necessary that activities be shifted into commercial­
izing and further intensified in that area. The fact that at the end of first
cycle it was necessary to introduce the product into the market while the
initial planning had started in design with Lufthansa and Air France. It
should be noted that the three capabilities were developing in parallel
with each other and over time there were shifts in valuing or the overall
capacity in developing them. One discussion could be that the overall
19
Scandinavian Journal of Management 37 (2021) 101137
Airbus capacity in developing new capabilities had increased rather than
mere an appropriate distribution of its capacity over several capabilities.
Another discussion also is that capability development and related
accumulation went from an equally-weighted development to a more
sequentially-weighted later (Brown & Eisenhardt, 1997). While our
discussion addressed the nature of managing capabilities around NPD,
prior studies have addressed the role of a right corporate governance
and a lower cost of capital in managing a firm pace of accumulation
(Pacheco-de-Almeida et al., 2015). In fact, our study is in line with the
results of Pacheco-de-Almeida et al. (2015) in the capacity of a firm
which is benefiting from its R&D capabilities. As a result, additionally
our study contributes to the current speed capability literature by
addressing intentional pace-setting in terms of two processes: (1)
keeping the pace as well as (2) avoiding big-jumps in the case of large
new products.
In the case of developing related capabilities, firstly, Airbus capa­
bilities were partly leveraged from the partners’ experience into the
alliance, while the nature of Airbus was unique and they had to develop
these capabilities on their own (e.g. Salvato 2009). However, regarding
the pace of asset accumulation, Airbus firstly responded to related
events (e.g. economic recessions and oil-price shifts) in the context upon
events, and even before that according to its system of listening to its
customers in late 60 s and more importantly, different groups such as
suppliers, developers, and customers were involved in the consortium.
One point that makes this issue more important is that the volume of
investment had made financiers very concerned about the results of
Airbus, and that pushed them to carefully follow related occasions via
iteratively nudging the Airbus managers (by closing messages!) on what
happens in Airbus, the context, and between the other players (e.g.
Gersick, 1988): long discussions and sessions between governors (e.g.
Karl Schiller, the British government, …) and negotiation between
Airbus managers (e.g. Henri Zielger) is a significant indicator of the
importance. This also helped Airbus to realize related occasions even
before their occurrences and made them able to make related adjust­
ments. This was over the Airbus own rhythm of development planning
which included starting the cycles on related plans and managing these
cycles exactly after having enough orders to move to the next cycle in the
first cycle and pre-order even before developing the aircraft in the following
A. Kazeminia
cycles (e.g. Schmitt & Klarner, 2015).
Another issue that we point out is related to managing capability
gaps in asset accumulation. This issue showed itself such that Airbus
capabilities were being developed in an even way. Airbus had to have a
minimum amount of each capability and develop related assets ac­
cording to these capabilities, since if even one capability lagged behind
the others, it would bring the whole down in the following occasions.
For instance, Warde’s as well as Pierson’s emphasis on developing
related commercializing capabilities was very important, since if they
had the most economic Aircraft in the market, but did not have the
appropriate department to meet the requirements of their customers,
they could not be successful. This required an even development of all
capabilities in sustaining the Airbus growth and that if the advancement
level of one capability increases over others, the firm may encounter
problems since filling it in the following occasions may be very difficult .
. (e.g. Brusoni et al. 2001). In this condition, keeping with the firm
overall rhythm of development (e.g. the start of each cycle or periodical
cycles) as well as upon events (e.g. a decrease in sale lower than ex­
pectations) can be appropriate points for measuring and responding to
these capabilities gaps (Bornemann et al., 2019). For this, Airbus firstly
put economic efficiency as the main purpose and then it was swinging
between the pressures imposed by the partners internally and what the
context was directing (Hitt et al., 2011). This was done by firstly adding
new capabilities or refreshing (upgrading prior products with new
technologies) them in those areas that were required.
Our study, also further advances/extends AAT by reifying Airbus
within it. We noted that the AAT characteristics have both hindering and
enabling effects and at different levels: firstly, our results on graduality
extend AAT addressing how the interaction of these characteristics can
affect and is the representation of accumulation pace at the firm level. In
managing both the hindering and enforcing effects, while the pace of
accumulation did not allow for further accumulation, moving to lower
levels resolved the problem: that, the effects were mitigated by playing
between cycles and components levels. In the case of planning, they
started and finished the cycles according to alliancing, R&D, and
commercializing, but at the component level, to accelerate the process,
they were able to select which parts of the aircraft had to be developed
(composites, fly-by-wire, etc.) in interaction with the aircraft itself. This
is related to the requests by airliners, as well as available technologies
and the possibility of developing new technologies with regard to the
context in that specific period: if there was enough base to develop that
specific technology they would, if not it would be shifted to the
following cycle. That, what the context would require would also specify
what should have been developed at the component level. In the first
cycle, these are time compression diseconomies and a lack of capacity in
developing new aircrafts that did not allow the first radical design and
pushed airbus to make the design smaller. That, the basis of develop­
ment was not available. But, in the following cycles, these were both
interconnectedness as well as asset mass efficiency that provided the
possibility of quick shifts and moving between cycles. However, beside the
external efficiency trend, decrease in size basically shows the nature of
time compression diseconomies and other aspects that does not allow for
a very large product and a very breakthrough technology at the same
time. The fact that the same level of developing capacity provides the
possibility of breakthroughs, but in smaller sizes.
Another important contribution of our study within AAT and the
cyclical model is that an enough amount of assets (e.g. credibility) can
partly break the sequence. Firstly, some of accumulation processes cannot
be accelerated subject to the AAT limitations (e.g. R&D or commer­
cializing in the first cycle), but accumulated stocks can create a tem­
porary base for interfering with cycles. That, when there is an enough
amount of assets, a cycle can be bent over itself or cycles over each other,
and different capabilities overlap rather than being sequenced after each
other. For instance, A320 had already enough orders even before it was
developed, since Airbus had proved itself as a reliable developer. Despite
this, Airbus again made a luxury introduction of product at the end of
20
Scandinavian Journal of Management 37 (2021) 101137
third cycle. Another issue is related to the minimum amount of assets
required for managing cycles. Our study addresses a minimum amount of
accumulated assets for an effect in a specific cycle: for a specific process a
specific amount of accumulated assets can be specified for which, it can
be addressed, when to move to another cycle (e.g. demand for another
product and enough orders), when to wait in a cycle (e.g. managing the
risky nature of a commercial aircraft and enough orders), when to bend
a cycle (e.g. enough credibility, 2nd-order), etc.
Regarding the nature of delays, different internal and external forces
were imposing/causing related delays (Hitt et al., 2011). Some delays
were firstly inherent to the processes regarding the trial and errors in
developing a right component until reaching to a congruence. This also
could be related to decisions about developing a right product, being
able to develop related components (time compression diseconomies),
and managing work-shares between partners. At the other side, delays
are related to limitations in accessing to resources (finding a right
component) or regulations (new trade laws or deregulation of the airline
industry) interrupting a current plan and adding further restrictions.
Whether they have been set intentionally or imposed by the context,
they did not allow for a linear growth and made it overall exponential,
but with a large (the initial cycle) to smaller (2nd & 3rd cycles) oscil­
lations with regard to orders in different products-A300/A310/A320 (e.
g. Brown & Eisenhardt, 1997). For instance, the long delay related to
getting enough orders, 4 years in the initial cycle, brought Airbus
initially down. But, related governmental supports helped Airbus to
keep going in that occasion. However, in the following cycles Airbus had
small oscillations with regard to oil prices and economic recessions or
delays related to finding a right work-share in the alliance or selecting a
right product for development affecting its growth making it non-linear
(Amis et al., 2004).
Decisions in Airbus were mostly taken by people at top in the gov­
ernments as well as the Airbus heads in different divisions such as
Beteille, Zeigler, Warde, etc. Although, the Airbus heading managers
took a full control in giving a structure to the consortium: that, they were
at the center of governance having the role of haggling with (1) the
governments at top for further finance and more support, and (2) the
technical partners at down for delivering and meeting the requirements
of the product. In the initial cycle, the governments had a strong influ­
ence on directing/supporting the consortium, but the more Airbus
became established, the more the decision authority shifted from the
governments into the hands of GIE. That, in the following cycles, Airbus
on its own took actions and made decisions in different occasions: for
instance, even how a government should join the consortium (e.g. the
return of British government). Although, from the initial moments, the
Airbus managers had enough authority/legitimacy to negotiate with/
convince people in their governments for their requests. These are
related to the requests for further finance, negotiations for resolving
related trade-barriers between governments (specifically between
Europe and the US), and work-shares between different parties, and the
additional investments into the program. This also could be considered
as a special case of government-based ventures.
Alliancing: In the case of alliancing capabilities, this study went
through Airbus in a stream from bringing partners beside each other for
funding and forming the alliance at a government-level to the designers
for developing the product at a strategic-technical level (Sørensen &
Reve, 1998). We showed that when promising results (A300B) came to
existence by technical partners in the first cycle, the concerns at the
government/financial supporter level calmed down and a space for a
new set of R&D activities opened up for the next cycle (Ariño & de la
Torre, 1998; Doz, 1996). That, when an alliance becomes established,
the following activities are the piecemeal deviations from the previously
established routines (e.g. García-Canal et al., 2014). This as well
included negotiating, managing conflicts, and more importantly task
distributions according to the partners’ technical capabilities (Ariño &
Reuer, 2004; Rothaermel & Deeds, 2006). As it was addressed above, the
alliancing capability was a major contributor to the partners’
A. Kazeminia
performance (Schilke & Goerzen, 2010; Schilke, 2014a, 2014b; Wang &
Rajagopalan, 2015) specifically with the leave of the British government
in the first cycle and related changes in the initial design, while in the
following cycles they shifted toward technical sides. This also was
shown in handling interactions between governments, and/or technical
partners, and/or customers by the Airbus managers. The fact that ac­
cording to the required strategies in the context or within Airbus, it was
necessary that a right move be formulated and those activities be
appropriately sequenced (Ireland et al., 2002). Additionally, the nature
of product was directive: that how its distribution required managing
interactions over several countries from France to Britain and Germany,
and later Spain and the Netherlands. This was specifically with regard to
overall shifts after the British leave in the first cycle.
Also, it should be noted that in the formation of consortium (e.g. Doz
et al., 2000; Sakakibara, 2002), since the project was (1) a highly unique
one with a high level of investment, (2) that not everyone could build
those components, and (3) partners were from highly reputed European
aircraft developers, this on its own reduced a lot of costs related to
partners’ search and selection: in many cases component developers
were selected via auctions/tenders and in very competitive contexts
(Wang & Rajagopalan, 2015). This was also very important since in the
initial cycle, some of the partners were involved in other parallel pro­
jects (e.g. Corcorde between France and Britain) with each other that by
its own decreased the costs of alliance formation and was a source of
return (Dyer & Singh, 1998). In addition, since the partners were
advanced ones, further costs were mitigated because of their history of
activities in the industry and that the partners were professionals. Also,
the legal structure of consortium provided enough flexibility for finan­
cial activities between partners while setting English as the shared
language helped to pass some of barriers in developing the aircraft,
improving communication, and setting a common ground between
partners (Prieto et al., 2009). In addition, since Airbus was formed be­
tween partners from various countries with different nationalities (as a
born-global), its management was a more difficult task versus other
players such as Boeing which was from a single country. Therefore, the
Airbus managers made a difference in developing the consortium/air­
crafts and in defining it as a success.
R&D: On the nature of R&D and the product design, we addressed
the how of developing better and more advanced components with
decreasing level of a product size. The issue is discussed in this way that
an increase in a product size includes additional amount of efforts and
arrangements to a new design (ceteris paribus) and a firm capabilities
should be fairly distributed over different parts for accumulation. Ca­
pabilities required for the arrangement of a large product can be
directed to the development of an advanced component. That, smaller
designs decrease the required amount of arrangement activities and
release capabilities to be dedicated to those parts that really matter. An
important issue is that despite developing breakthroughs, the overall combi­
nation of all components together with that size at a higher level follows the
piecemeal accumulation (Brown & Eisenhardt, 1997). In our study, in the
second cycle it was the market and competitive pressures for more
efficient aircrafts while at the same time Airbus had to bring up a
product that ‘voo’ everyone in the industry to keep its activities in the
following years and make it sustainable. This would require an addi­
tional amount of efforts directed to R&D and pushed Airbus to bring
breakthroughs which became very representative in terms of both de­
signs as well as components in A320. The fact that A320 became the
most successful product of Airbus among all others (with the lowest
amount of defects). In addition, as it can be seen most of product designs
were customer-driven and beneficiary airlines were directly involved in
developing the aircrafts (Brown & Eisenhardt, 1995; Danneels, 2016;
Hargadon & Sutton, 1997; Schilling & Hill, 1998).
Our study also mounts the dynamic capability literature (Pavlou & El
Sawy, 2011; Schriber & Löwstedt, 2020) to a new level by addressing
that various actions/new initiatives taken within the firm can affect both
streams of dynamic and operational capabilities, but with different
21
Scandinavian Journal of Management 37 (2021) 101137
weights. This is while, the accumulation of dynamic and ordinary ca­
pabilities can follow different paces based on (1) the dynamic nature of a
specific context and the amount of reconfigurations that should be built
as well as (2) the nature of inherent relationship between the two sets of
capabilities. That, new strategies or activities contribute to the
improvement of both capability sets when they are inherently bound
and growing in an interactive way. For instance, enforcing the Airbus
management team and new investments for new components (e.g.
A320) provided Airbus with very new and delicate development capa­
bilities (dynamic capabilities) resulted in FBW and very delicate tech­
nologies, but a series established processes (lower-order ones) were
being shifted from the second cycle to the third one (less novel processes,
some of NPD structuring activities) (e.g. Hermano & Martín-Cruz,
2016). In an interactive way and a high level of association between the
two capabilities, the higher the level of change in dynamic capabilities,
the more significant the shift in the nature of operational capabilities as
they are majorly reconfigured for a specific setting. For instance, in the
3rd cycle, more weights were toward dynamic capabilities for devel­
oping new technologies and meeting new contextual criteria, and there
were down-enriching level-2 in terms of component shifts. This leads us
to address, the faster the rate of changes in dynamic capabilities, the
faster the pace of changes in operational capabilities in addressing
related dynamic uncertainties. However, this does not fully address that
the faster the rate of changes in operational capabilities, the faster the
rate of changes in dynamic capabilities, as they can only be related to
exploitative improvements in the nature of operational capabilities.
While our study is focused on dynamic capabilities, the nature of
operational capabilities remains open for the future studies to address.
Also we comment on the routinization rate of dynamic capabilities
and their shifts into operational capabilities. Some capabilities (e.g.
moving processes), when are formed for the first time, can be specified
as dynamic ones; but when they get routinized, they become more
operational and shift to lower orders. The routinization rate at a cycle
level has a lower pace versus within-cycle advancements (in the initial
cycles) depending on the types of components. This is because, on average,
the routinization for a cycle requires finishing a whole cycle of NPD
versus several forming components within-cycles and their related
processes which become more interwoven progressively (e.g. Kunisch
et al., 2019). In addition, the issue can be addressed in the routinization of
between-cycles moving processes (e.g. leveraging ones) versus within-cycles
processes: depending on the nature of components developing within-­
cycle processes, on average, is comparatively quicker versus between-cycle
processes. This is because the routinization of between-cycles moving
processes initially requires several full cycles and is slower, but related
within-cycle processes is quicker because of more manageable/smaller
within-cycle components. For instance, related down-sizing processes
were improved/enriched in two sequential full cycles first, and then
there was the possibility of moving to larger aircrafts (e.g. A340/A330
which were developed afterwards). But, for wings, in each cycle there
were different wing-development processes irrespective of the whole
cycle. One discussion is that how these interacting processes are improved
according to the selection of a specific to-be-developed aircraft. In terms of
process selections, related performance criteria can be considered: for
instance, those processes could be selected that could facilitate the faster
routinization of between-cycle moving processes in a way that economic
efficiency criteria could be met.
Commercializing: In the case of commercializing capabilities,
despite the Airbus emphasis and advertisements on the design of Aircraft
and the fact that the governments and airlines were a part of the process
(Danneels, 2002), again at the end of design, Airbus had to go for an
intense market expansion processes to get its initial orders. Although, in
this period Airbus faced an economic recession that was further limiting.
Also, despite different airlines were following conflicting interests, being
involved in the design period facilitated their purchases afterwards, and
that the product from the design period was being adapted to their re­
quirements. In the case of commercializing, while the usual capabilities
A. Kazeminia
were important, more personal stories/relational capital and negotia­
tions made the way. As it was addressed before, this is related to the main
characteristic of the product (industry) as a risky one which intensifies and
lingers its acceptance period specifically in the initial cycle despite being
developed by highly reputed developers; by its establishment in the following
cycles this aspect cooled down. Two of these items are the following:
leasing procedures (1) for instance, a 6 month trial with free return in
the US that was very competitive, and face-to-face sales/follow-ups (2)
for instance, orders from Indian Airline. This study is in line with the
results of Danneels (2002, 2016) emphasizing the firm commercializing
capabilities as important ones in delivering the products to the market.
This specifically was very important in the initial cycle since there were
very strong players in the market requiring very strong commercializing
capabilities for expansion (specifically in the US). The fact that intensive
negotiations were required to sell the first product in the first period and
in the following periods, the Airbus credibility was being built on its own
(Danneels, 2002, 2016).
Regarding the characteristics of the industry, leasing contracts are
among the main vehicles for gaining orders and Airbus had to be active
in the area (Danneels, 2002). The leasings were used to both gain market
share in the US and/or develop market in the case of East Asia for which
they needed local knowledge (Hitt et al., 2004) and mostly were done by
local experts in those regions (Barbero et al., 2011) as a part of their
commercialization capabilities. In the first cycle, in the case of the US
market, Airbus pushed to create a customer base by working with
customer airlines for convincing them about their products’ economic
efficiency/quality. This included detaching customers from the US de­
velopers and attaching them to Airbus. For this, the Airbus products had
the required similarity with other products such as Boeing in sharing the
same bases (e.g. airports) for being utilized in the US market. In addi­
tion, the leasing activities were sensitive to overall falls in demand or
shocks/recessions in the context. Airbus was making an entry into the
industry versus other aircraft developers with the supports of govern­
ments. Comparable to other developers in that period, and controlling
for the age and entry of Airbus, Boeing as an established developer was
following a similar pattern. They were in direct contacts with customers
and for instance in the case of Boeing 747, the development of the
aircraft was enacted in a joint meeting between Boeing and Pan Am’s
CEO with the following approach: Boeing builds an aircraft (747) if Pan
Am buys/do you (Boeing) build if we buy (747)? This was again because
of the huge amount of investments in the program that without a
customer it would remain null.
Commonality: Finally, our research provided a new approach on
managing commonalities by having a hand on the past while looking
forward according to the firm internal planning and development as well
as external forces (e.g. competition) that are driving the firm forward.
Brown and Eisenhardt (1997) address the point on designing new
products by showing probes into the future as well as a series of
time-plans, while our study discussed a similar concept on the nature of
commonalities as a higher order concept. We discussed both external
and internal forces direct a firm commonality strategy. This could be
further extended by discussing how commonalities direct the firm NPD
activities and not vice versa. That, how commonalities can be deter­
mining when competition is pushing firms to develop more competitive
(energy-efficient) products, when the firm has to have quicker shifts to
new technological advances meaning that to increase its pressure on
delving into future rather than considering previous technologies. That,
how maximum commonality can be directed by benefiting from the
most of what is possible to be utilized while new items should be
substituted. In this condition, contextual as well as internal forces
specify what types of commonalities should be pushed further. Airbus
firstly pushed for composites to make its aircrafts lighter and then
developed fly-by-wire to improve its controls. In addition, the shorter
cycles from 6(+4) and 5 to 4 can be also partly explained by this com­
monality effect.
In the case of commonalities, in addition, our study further extended
22
Scandinavian Journal of Management 37 (2021) 101137
the literature by addressing the issue in an alliance setting when sup­
pliers, a focal firm, and customers are involved in development pro­
cesses and these commonalities should be managed with various
perplexities involved in managing the alliance parties. The fact that
alliancing capabilities become more of a concern with an increasing
level of relational perplexities in R&D (Capaldo & Petruzzelli, 2011). In
this condition, commonalities are stretched toward partners based on a
developing relational capital between parties as a source of a firm
competitive advantage. One expectation could be related to how these
commonalities are both empowered as well as hindered by parties’ in­
terests. For instance, in Airbus different partners were following
different interests in the alliance: Germany was looking to rebuild its
aviation industry while Britain was looking to create job opportunities;
how partners’ shares changed in the second cycle is informative (e.g.
Kale et al., 2000). Another expectation could be related to the interac­
tion between the nature of alliance and the parties’ capabilities (e.g.
Kapoor & Adner, 2012). This was partly shown by how Airbus was
managing the commonality in both forward and backward forms of
updating products in its alliance with its customers (e.g. Lufthansa,
SwissAir, and Air France) as well as its suppliers (e.g. SNECMA). This is
while, as we discussed, in such conditions factors such as market pres­
sure, competition from other parties, or access to resources are very
important in specifying the direction of a firm commonality strategy.
Future studies, in addition, could further advance this stream of
research: this can be shown by addressing how commonalities can be
future-oriented, partner-oriented (Doz et al., 2000), or be framed by
other contextual factors such as markets (e.g. Danneels, 2007). In this
regard, we also introduced the concept of relational commonality which
can be further advanced in both design and operational contexts.
Managerial Implications:
While our study provides a broad sets of managerial implications,
here we try to frame some of them in several major lines:
First of all, our study addresses the pace of asset accumulation as a
central factor in managing the growth of firm in dynamic context. In this
line, managers have to pay a careful attention to setting the pace ac­
cording to time compression diseconomies, asset mass efficiency, and
asset interconnectedness. Our study also invites managers to consider
asset accumulation as an appropriate framework for managing the
growth of their firms versus other approaches. They can gain a lot by
playing between the factors and understanding their interactions at
different levels (cycles, components, etc.). It also motivates managers to
consider setting a right purpose as a process (e.g. efficiency) as well as a
series of long-term plans (e.g. a family of aircraft) as those bases for
which the firm is always interactively in struggle. That, the firm is
involved in a constant effort for introducing new advances, technolo­
gies, and products with the regard to the requirements of its evolving
context to meet the stated purposes/plans. Although, this does not mean
a deterministic plan, but leaving it open partly to what the context offers
and staying on an edge for making sense of new opportunities to
respond/improvise on related occasions (e.g. Salvato, 2009; Brown &
Eisenhardt, 1997).
Our study invites managers to set the pace of their asset accumula­
tion with regard to various involved interacting capabilities. Firstly, in
different periods of accumulation, different capabilities get primary
roles and managers have to consider the primacy of one over others and
they have to appropriately direct capabilities toward each other, based
on the firm development capacity. This also encourages managers that
these capabilities as the base of asset of accumulation have to be
managed in an even way. The over-progress of one capability over others
can create capability lags which may be very difficult to compensate if
not taken seriously. While strategic alliancing and R&D capabilities have
been considered among important capabilities in developing new
products, specifically when there is a huge amount of investment, our
study emphasized on the role of commercializing: commercializing right
from a starting point should be managed in interaction with alliancing
and R&D as it can further enrich the two capabilities in terms of being
A. Kazeminia
right for the product’s market, being aware of related trends, and
involving the beneficiary parties from the initial moments of design.
According to our asset accumulation framework, the amount of
different stocks can affect the sequence of activities in new development
plans. Although, the nature of product may still require further efforts:
the more risky the new product, the higher the efforts required for
establishing it. In the case of growth, managing various groups of
products in terms of technology selection can reduce costs while its re­
turn has to be balanced according to various advantages over the pace of
product portfolio adjustments. This is more important when these ac­
tivities are conducted in an alliance context, when the firm is formed on
relationships which further adds to its complexities. In addition, the
results of our study showed that when there are different interests within
development programs (e.g. political interests), still defining a right
purpose such as keeping economic concerns (economic efficiency) and
going for what is right can mitigate the effects of partners’ interests and
increase the chances of a firm sustained growth. Future studies can further
advance this stream.
Finally, we elaborate on the nature of probing the future as well as
transitions: with regard to the huge amount of investments within the
program, the financiers were very concerned about outcomes and this
pushed Airbus to become more cautious of its situation in advance. In
addition, the involved parties (e.g. customers, suppliers, …) and the
alliance nature of the consortium facilitated the probing since these
parties were feeding to the consortium according to their own estima­
tions. This was also in parallel with the related trends in the industry. In
the case of transitions, making associations between cycles and pre­
paring for transitions usually starts before the end of a specific cycle
making them smooth (Brown & Eisenhardt, 1997): in Airbus transitions
were not abrupt, but it had a long-term planning for moving between
cycles and most of times they had several options among which they had
to choose. Firstly, Airbus as a holistic plan had a family approach to its
products. Secondly, the requirements for transitions (e.g. negotiations
for joint programs with Boeing for A310, work-shares, etc.) started
around 6 months to 1 year (late 76) before moving to the next cycle
(1977), which this also was according to the overall requests of airlines
(SwissAir in transition between the first and second cycles for A310) and
the overall requirements of the context for further efficiency. An inter­
esting point, if it was required they held the transition to fully finalize
their planning and get ready for an appropriate and a quick imple­
mentation of NPD for instance in the case of A320: instead of developing
an aircraft in 7 years (the initial cycle for A300), they did a right plan­
ning and made a fast implementation in 4 years (Eisenhardt & Tabrizi,
1995).
6. Conclusion
In this study answering the question “how do firms grow sustainably
in dynamic technology-intensive industries?” we presented the suc­
cessful case of the Airbus consortium from its birth until the moment
that it became a pioneer in the commercial aircraft industry in terms of
technological advances. We proposed a process-based model of sus­
tainable growth and supported it in the context of a dynamic and
technology-intensive industry. We found the incremental and piecemeal
accumulation of resources to be the primary underlying pattern behind
the sustainable growth of Airbus over the period of study. In fact, after
the introduction of its first aircraft, cycles of continuous innovation,
improvement, and introduction of (new) products, contributed to Airbus’
incremental accumulation of resources over time. Using the maximum
commonalities between their aircraft when developing their techno­
logical assets and aircraft, Airbus has been able to improve the efficiency
of their growth. Additionally, keeping the family of aircraft updated
with the most recent technologies based on the commonality strategy
helped Airbus to develop their products in a homogeneous way and
benefit from economies of scale and scope over time.
This study contributes to current streams on Asset Accumulation
23
Scandinavian Journal of Management 37 (2021) 101137
Theory (AAT) (Dierickx & Cool, 1989) and Dynamic Capabilities
(Eisenhardt & Martin, 2000) in the strategy literature by confronting a
theoretical model with empirical data. The study proposes and empiri­
cally supports a process-based model of sustainable growth of the firm
through the cyclical introduction and improvement of new products. In
addition, the study complements the previous studies in the field by
addressing a successful case of growth from the firm’s birth until the
moment that it became a technological pioneer in its environment.
Previous studies have tended to focus on other stages such as decline (e.
g., Danneels, 2002, 2011). Our study showed how the cycles of large
NPDs interact and how they feed to the firm asset accumulation. For
that, we specified the underlying processes of asset accumulation and
capability development under a cyclical framework, while the cycles
interact with each other. We showed that how managing a right pace,
setting the firm’s interacting capability development activities in
interaction with the pace, and managing the sequence of capabilities in a
cycle according to the pace can feed to the firm successful growth. This is
despite ups and downs in introducing a risky aircraft into its market. In
addition, we showed how selecting shared technologies/components
between a group of products, with regard to the pace of accumulation,
can create synergies and be a source of financial return.
It is worth mentioning that this study does not allow for a strong
generalization because we have relied on only one case, which is a
limitation of our study. However, one point that makes our study still
rigorous for generalization is the following point: Airbus was managed
by managers (e.g. Beteille, Zeigler, etc.) who were involved in a series of
other aircraft developments (e.g. Galion, Concorde, etc.) in France,
Britain, and Germany; and even in the US (as pioneers in that period)
before Airbus and even in parallel with Airbus; Managers who were ex­
perts for over decades and involved in parallel projects as the founders of
aviation sector in these countries. One key issue that makes our study
still distinctive on providing only one case is that other studies may rely
on a mixture of managers with different backgrounds: for instance, in
young entrepreneurial settings, managers are usually unexperienced
where variations are sought between different un/successful cases (e.g.
Eisenhardt, 1989). However, a project like Airbus is not put under the
control of a usual manager and Airbus had a very strong management
team. The fact that our study deviates from those studies/contexts such
that despite benefiting from only one case, the one case is still very
representative as the actions of these managers were representative (e.g.
the Andrew Grove of IBM). We believe our case is a “talking pig”, a very
representative and extra-ordinary one in describing the phenomena
addressed in this study (Siggelkow, 2007). For instance,
“For more than twenty years Beteille had been at or close to the center of
most of the important developments in French aeronautical life. As a test
pilot he had survived a crash of the Armagnac, the first long distance
French passenger plane built to rival Lockheed’s Constellation; he was in
charge of flight trails of the Caravelle, France’s most successful civil jet; he
spent time with Hawker Siddeley at Haffield working on Concorde; and
had been in charge of the development of Sud Aviation’s missile and space
business. It was this that gave him practical experience of working closely
with the Germans, the British, the Spanish and the Italians – something
that was shortly to stand him in very good stead.”
Finally, we emphasize that the aim of the study was to provide a
better understanding of the underlying processes of firm growth as
suggested by previous studies (e.g., Danneels, 2002, 2011; Tran et al.,
2019). Because at the current moment, the field has an emerging nature,
more qualitative studies can uncover the nature of firm sustainable
growth in the case of dynamic environments. Also, there remains dis­
cussions on the nature of governments’ subsidies in Europe and the US
which had affected a series of trade agreement negotiations (e.g. GATT)
during the period of study specifically since 1978. However, the nature
of investments neutralizes the issue in the industry: in the US (sequen­
tial: investment and leveraging technology from non-commercial to
A. Kazeminia
commercial sectors) versus Europe (separate parallel streams of in­
vestments in non-commercial and commercial sectors). That, the US
players similarly have benefitted from a huge amount of the US gov­
ernment’s investments within- and post-war, and even from the aviation
technology developed in Europe (e.g. Germany) during the second
world-war. This is in fact one of main reasons making entry into that
segment of the industry very difficult or even impossible (e.g. Kotha,
2010).
Acknowledgements
The paper has been a part of the author’s doctoral thesis (2010/15).
The author is thankful to Africa Arino and Cristina Gimenez Thomsen.
Also, he would like to thank the seminar participants of Strategic
Management Society Conference-PDW (2014, Madrid) and the Strategic
Management Society Conference (2016, Berlin). Special thanks and
gratitudes to Editor-in-Chief Hans Hasselbladh, Associate Editor John P.
Ulhøi, and two anonymous reviewers for their supports and constructive
comments.
Appendix A. Supplementary data
Supplementary material related to this article can be found, in the
online version, at doi:https://doi.org/10.1016/j.scaman.2020.101137.
References
Ambrosini, V., & Bowman, C. (2009). What are dynamic capabilities and are they a
useful construct in strategic management? International Journal of Management
Reviews, 11(1), 29–49.
Amis, J., et al. (2004). The pace, sequence, and linearity of radical change. The Academy
of Management Journal, 47(1), 15–39.
Ariño, A., & de la Torre, J. (1998). Learning from failure: Towards an evolutionary model
of collaborative ventures. Organization Science, 9(3), 306–325.
Ariño, A., & Reuer, J. J. (2004). Designing and renegotiating strategic alliance contracts.
The Academy of Management Perspectives, 18(3), 37–48.
Barbero, J. L., et al. (2011). Managerial capabilities and paths to growth as determinants
of high-growth small and medium-sized enterprises. International Small Business
Journal, 29(6), 671–694.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of
Management, 17(1), 99–120.
Barney, J. B. (1986). Strategic factor markets: Expectations, luck, and business strategy.
Management Science, 32(10), 1231–1241.
Bettis, R. A., et al. (2015). Qualitative empirical research in strategic management.
Strategic Management Journal, 36(5), 637–639.
Bornemann, T., et al. (2019). Successive product generations: Financial implications of
industry release rhythm alignment. Journal of the Academy of Marketing Science,
1–18.
Brown, S. L., & Eisenhardt, K. M. (1995). Product development: Past research, present
findings, and future directions. The Academy of Management Review, 20(2), 343–378.
Brown, S. L., & Eisenhardt, K. M. (1997). The art of continuous change: Linking
complexity theory and time-paced evolution in relentlessly shifting organizations.
Administrative Science Quarterly, 42(1), 1–34.
Brusoni, Stefano, & Prencipe, Andrea (2001a). Unpacking the black box of modularity:
technologies, products and organizations. Industrial and corporate change, 10(1),
179–205.
Brusoni, S., & Prencipe, A. (2001b). Managing knowledge in loosely coupled networks:
Exploring the links between product and knowledge dynamics. Journal of
Management Studies, 38(7), 1019–1035.
Brusoni, S., et al. (2001). Knowledge specialization, organizational coupling, and the
boundaries of the firm: why do firms know more than they make? Administrative
Science Quarterly, 46(4), 597–621.
Capaldo, A., & Petruzzelli, A. M. (2011). In search of alliance-level relational capabilities:
Balancing innovation value creation and appropriability in R&D alliances.
Scandinavian Journal of Management, 27(3), 273–286.
Conboy, K., et al. (2020). Using business analytics to enhance dynamic capabilities in
operations research: A case analysis and research agenda. European Journal of
Operational Research, 281(3), 656–672.
Crook, T. R., et al. (2006). Has strategic management shed the normal science
straightjacket?: Revisiting Bettis’(1991) critiques. Journal of Managerial Issues,
409–423.
Dalpiaz, E., & Di Stefano, G. (2018). A universe of stories: Mobilizing narrative practices
during transformative change. Strategic Management Journal, 39(3), 664–696.
Danneels, E. (2002). The dynamics of product innovation and firm competences. Strategic
Management Journal, 23(12), 1095–1121.
Danneels, E. (2007). The process of technological competence leveraging. Strategic
Management Journal, 28(5), 511–533.
24
Scandinavian Journal of Management 37 (2021) 101137
Danneels, E. (2008). Organizational antecedents of second-order competences. Strategic
Management Journal, 29(5), 519–543.
Danneels, E. (2011). Trying to become a different type of company: Dynamic capability
at Smith Corona. Strategic Management Journal, 32(1), 1–31.
Danneels, E. (2016). Survey measures of first-and second-order competences. Strategic
Management Journal, 37(10), 2174–2188.
Demir, R., et al. (2017). The strategic management of high-growth firms: A review and
theoretical conceptualization. Long Range Planning, 50(4), 431–456.
Di Stefano, G., et al. (2014). The organizational drivetrain: A road to integration of
dynamic capabilities research. The Academy of Management Perspectives. amp.
2013.0100.
Dierickx, I., & Cool, K. (1989). Asset stock accumulation and sustainability of
competitive. Management Science, 35(12), 1504–1511.
Doz, Y. L. (1996). The Evolution Of Cooperation in Strategic Alliances: Initial Conditions
or Learning Processes? Strategic Management Journal, 17, 55–83.
Doz, Y. L., et al. (2000). Formation processes of R&D consortia: Which path to take?
Where does it lead? Strategic Management Journal, 21(3), 239–266.
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of
interorganizational competitive aadvantage. The Academy of Management Review, 23
(4), 660–679.
Dykes, B. J., et al. (2019). Organizational speed as a dynamic capability: Toward a
holistic perspective. Strategic Organization, 17(2), 266–278.
Easterby-Smith, M., et al. (2009). Dynamic capabilities: Current debates and future
directions. British Journal of Management, 20(s1), S1–S8.
Eisenhardt, K. M. (1989). Building theories from case study research. The Academy of
Management Review, 14(4), 532–550.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: what are they? Strategic
Management Journal, 21(10–11), 1105–1121.
Eisenhardt, K. M., & Tabrizi, B. N. (1995). Accelerating adaptive processes: Product
innovation in the global computer industry. Administrative Science Quarterly, 40(1),
84–110.
Eriksson, T. (2014). Processes, antecedents and outcomes of dynamic capabilities.
Scandinavian Journal of Management, 30(1), 65–82.
Fainshmidt, S., et al. (2016). Dynamic capabilities and organizational performance: A
meta-analytic evaluation and extension. Journal of Management Studies, 53(8),
1348–1380.
Fainshmidt, S., et al. (2019). When do dynamic capabilities lead to competitive
advantage? The importance of strategic fit. Journal of Management Studies, 56(4),
758–787.
García-Canal, E., et al. (2014). Contractual form in repeated alliances with the same
partner: The role of inter-organizational routines. Scandinavian Journal of
Management, 30(1), 51–64.
Garrette, B., et al. (2009). Choosing between collaborative and autonomous production
in the worldwide aircraft industry, 1949–2000. Strategic Management Journal, 30(8),
885–894.
Gersick, C. J. G. (1988). Time and transition in work teams: Toward a new model of
group development. The Academy of Management Journal, 31(1), 9–41.
Gibbert, M., et al. (2008). What passes as a rigorous case study? Strategic Management
Journal, 29(13), 1465–1474.
Grant, R. M., & Verona, G. (2015). What’s holding back empirical research into
organizational capabilities? Remedies for common problems. Strategic Organization,
13(1), 61–74.
Hargadon, A., & Sutton, R. I. (1997). Technology brokering and innovation in a product
development firm. Administrative Science Quarterly, 716–749.
Hashai, N., et al. (2018). The performance implications of speed, regularity, and duration
in alliance portfolio expansion. Journal of Management, 44(2), 707–731.
Helfat, C. E. (1997). Know-how and asset complementarity and dynamic capability
accumulation: The case of r&d. Strategic Management Journal, 18(5), 339–360.
Helfat, C. E., & Peteraf, M. A. (2009). Understanding dynamic capabilities: Progress
along a developmental path. Strategic Organization, 7(1), 91–102.
Helfat, C. E., & Winter, S. G. (2011). Untangling dynamic and operational capabilities:
Strategy for the (N)ever-Changing world. Strategic Management Journal, 32(11),
1243–1250.
Helfat, C., et al. (2007). Dynamic capabilities. Understanding dynamic change in
organizations. Oxford: Blackwell.
Henderson, R., & Cockburn, I. (1994). Measuring competence? Exploring firm effects in
pharmaceutical research. Strategic Management Journal, 15(S1), 63–84.
Hermano, V., & Martín-Cruz, N. (2016). The role of top management involvement in
firms performing projects: A dynamic capabilities approach. Journal of Business
Research, 69(9), 3447–3458.
Hitt, M. A., et al. (2004). The institutional effects on strategic alliance partner selection in
transition economies: China vs. Russia. Organization Science, 15(2), 173–185.
Hitt, M. A., et al. (2011). Strategic entrepreneurship: Creating value for individuals,
organizations, and society. The Academy of Management Perspectives, 25(2), 57–75.
Iansiti, M., & Clark, K. B. (1994). Integration and dynamic capability: Evidence from
product development in automobiles and mainframe computers. Industrial and
Corporate Change, 3(3), 557–605.
Ireland, R. D., et al. (2002). Alliance management as a source of competitive advantage.
Journal of Management, 28(3), 413–446.
Itami, H., & Numagami, T. (1992). Dynamic interaction between strategy and
technology. Strategic Management Journal, 13(S2), 119–135.
Kahl, S. J. (2014). Associations, jurisdictional battles, and the development of dual-
purpose capabilities. The Academy of Management Perspectives, 28(4), 381–394.
Kale, P., et al. (2000). Learning and protection of proprietary assets in strategic alliances:
Building relational capital. Strategic Management Journal, 21(3), 217–237.
A. Kazeminia
Kapoor, R., & Adner, R. (2012). What firms make vs. What they know: How firms’
production and knowledge boundaries affect competitive advantage in the face of
technological change. Organization Science, 23(5), 1227–1248.
Karna, A., et al. (2016). Revisiting the role of the environment in the
capabilities–Financial performance relationship: A meta-analysis. Strategic
Management Journal, 37(6), 1154–1173.
Ketokivi, M., & Choi, T. (2014). Renaissance of case research as a scientific method.
Journal of Operations Management, 32(5), 232–240.
Kim, T.-Y., & Kuilman, J. G. (2013). The demography of resources. Journal of
Management Studies, 50(7), 1155–1184.
Knott, A. M., et al. (2003). On the strategic accumulation of intangible assets.
Organization Science, 14(2), 192–207.
Kotha, S. (2010). Spillovers, spill-ins, and strategic entrepreneurship: America’s first
commercial jet airplane and Boeing’s ascendancy in commercial aviation. Strategic
Entrepreneurship Journal, 4(4), 284–306.
Kotha, S., & Srikanth, K. (2013). Managing a global partnership model: Lessons from the
B oeing 787 “dreamliner”program. Global Strategy Journal, 3(1), 41–66.
Krishnan, V., & Ulrich, K. T. (2001). Product development decisions: A review of the
literature. Management Science, 47(1), 1–21.
Kunisch, S., et al. (2017). Time in strategic change research. The Academy of Management
Annals, 11(2), 1005–1064.
Kunisch, S., et al. (2019). Strategic initiative portfolios: How to manage strategic
challenges better than one at a time. Business Horizons, 62(4), 529–537.
Laaksonen, O., & Peltoniemi, M. (2018). The essence of dynamic capabilities and their
measurement. International Journal of Management Reviews, 20(2), 184–205.
Langley, A. (2007). Process thinking in strategic organization. Strategic Organization, 5
(3), 271–282.
Langlois, R. N., & Steinmueller, W. E. (2000). Strategy and circumstance: The response of
American firms to Japanese competition in semiconductors, 1980–1995. Strategic
Management Journal, 21(10–11), 1163–1173.
Lavie, D. (2012). The case for a process theory of resource accumulation and
deployment. Strategic Organization, 10(3), 316–323.
Leonard-Barton, D. (1992). Core capabilities and core rigidities: A paradox in managing
new product development. Strategic Management Journal, 13(S1), 111–125.
Mikalef, P., et al. (2020). Exploring the relationship between big data analytics capability
and competitive performance: The mediating roles of dynamic and operational
capabilities. Information & Management, 57(2), Article 103169.
Narayanan, V. K., et al. (2009). Building organizational and scientific platforms in the
pharmaceutical industry: A process perspective on the development of dynamic
capabilities. British Journal of Management, 20(s1), S25–S40.
Nerkar, A., & Roberts, P. W. (2004). Technological and product-market experience and
the success of new product introductions in the pharmaceutical industry. Strategic
Management Journal, 25(8–9), 779–799.
Pacheco-de-Almeida, G. (2010). Erosion, time compression, and self-displacement of
leaders in hypercompetitive environments. Strategic Management Journal, 31(13),
1498–1526.
Pacheco-de-Almeida, G., et al. (2015). The right speed and its value. Strategic
Management Journal, 36(2), 159–176.
Pavlou, P. A., & El Sawy, O. A. (2011). Understanding the elusive black box of dynamic
capabilities. Decision Sciences, 42(1), 239–273.
Penrose, E. T. (1959). Theory of the growth of the firm. New York: Wiley & Sons.
Pentland, B. T. (1999). Building process theory with narrative: From description to
explanation. The Academy of Management Review, 24(4), 711–724.
Peteraf, M. A. (1993). The cornerstone of competitive advantage: A resource-based view.
Strategic Management Journal, 14(3), 179–191.
Peteraf, M., et al. (2013). The elephant in the room of dynamic capabilities: Bringing two
diverging conversations together. Strategic Management Journal, 34(12), 1389–1410.
Pezeshkan, A., et al. (2016). An empirical assessment of the dynamic
capabilities–performance relationship. Journal of Business Research, 69(8),
2950–2956.
Pisano, G. P. (2017). Toward a prescriptive theory of dynamic capabilities: Connecting
strategic choice, learning, and competition. Industrial and Corporate Change, 26(5),
747–762.
Prašnikar, J., et al. (2008). Identifying and exploiting the inter relationships between
technological and marketing capabilities. Long Range Planning, 41(5), 530–554.
Prieto, I. M., et al. (2009). Building dynamic capabilities in product development: How
do contextual antecedents matter? Scandinavian Journal of Management, 25(3),
313–326.
Protogerou, A., et al. (2012). Dynamic capabilities and their indirect impact on firm
performance. Industrial and Corporate Change, 21(3), 615–647.
Rindova, V. P., & Kotha, S. (2001). Continuous “Morphing”: Competing through dynamic
capabilities, form, and function. The Academy of Management Journal, 44(6),
1263–1280.
25
Scandinavian Journal of Management 37 (2021) 101137
Rothaermel, F. T., & Deeds, D. L. (2006). Alliance type, alliance experience and alliance
management capability in high-technology ventures. Journal of Business Venturing,
21, 429–460.
Sakakibara, M. (2002). Formation of R&D consortia: Industry and company effects.
Strategic Management Journal, 23(11), 1033–1050.
Sastry, M. A. (1997). Problems and paradoxes in a model of punctuated organizational
change. Administrative Science Quarterly, 237–275.
Schilke, O. (2014a). On the contingent value of dynamic capabilities for competitive
advantage: The nonlinear moderating effect of environmental dynamism. Strategic
Management Journal, 35(2), 179–203.
Schilke, O. (2014b). Second-order dynamic capabilities: How do they matter? The
Academy of Management Perspectives. amp. 2013.0093.
Schilke, O., & Goerzen, A. (2010). Alliance management capability: An investigation of
the construct and its measurement. Journal of Management, 36(5), 1192–1219.
Schilke, O., et al. (2018). Quo vadis, dynamic capabilities? A content-analytic review of
the current state of knowledge and recommendations for future research. The
Academy of Management Annals, 12(1), 390–439.
Schilling, M. A., & Hill, C. W. (1998). Managing the new product development process:
Strategic imperatives. The Academy of Management Perspectives, 12(3), 67–81.
Schmitt, A., & Klarner, P. (2015). From snapshot to continuity: A dynamic model of
organizational adaptation to environmental changes. Scandinavian Journal of
Management, 31(1), 3–13.
Schoemaker, P. J. (1990). Strategy, complexity, and economic rent. Management Science,
36(10), 1178–1192.
Schriber, S., & Löwstedt, J. (2015). Tangible resources and the development of
organizational capabilities. Scandinavian Journal of Management, 31(1), 54–68.
Schriber, S., & Löwstedt, J. (2018). Managing asset orchestration: A processual approach
to adapting to dynamic environments. Journal of Business Research, 90, 307–317.
Schriber, S., & Löwstedt, J. (2020). Reconsidering ordinary and dynamic capabilities in
strategic change. European Management Journal, 38(3), 377–387.
Shi, W., & Prescott, J. E. (2011). Sequence patterns of firms’ acquisition and alliance
behaviour and their performance implications. Joumat of Management Studies, 48(5),
1044–1070.
Shi, W., & Prescott, J. E. (2012). Rhythm and entrainment of acquisition and alliance
initiatives and firm performance: A temporal perspective. Organization Studies, 33
(10), 1281–1310.
Siggelkow, N. (2007). Persuasion with case studies. The Academy of Management Journal,
50(1), 20–24.
Sirmon, D. G., et al. (2007). Managing firm resources in dynamic environments to create
value: Looking inside the black Box. The Academy of Management Review, 32(1),
273–292.
Sørensen, H. B., & Reve, T. (1998). Forming strategic alliances for asset development.
Scandinavian Journal of Management, 14(3), 151–165.
Teece, D. J., et al. (1997). Dynamic capabilities and strategic management. Strategic
Management Journal, 18(7), 509–533.
Thomas, H. (1984). Strategic decision analysis: Applied decision analysis and its role in
the strategic management process. Strteagic Management Journal, 5(2), 139–156.
Thomke, S., & Kuemmerle, W. (2002). Asset accumulation, interdependence and
technological change: Evidence from pharmaceutical drug discovery. Strategic
Management Journal, 23(7), 619–635.
Thompson, J. D. (1967). Organizations in action: Social science bases of administrative
theory.
Tran, Y., et al. (2019). A process model of the maturation of a new dynamic capability.
Industrial Marketing Management, 83, 115–127.
Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition, and inertia: Evidence from
digital imaging. Strategic Management Journal, 21(10–11), 1147–1161.
Ugur, M., et al. (2016). Inverted-U relationship between R&D intensity and survival:
Evidence on scale and complementarity effects in UK data. Research Policy, 45(7),
1474–1492.
Van de Ven, A. H. (1992). Suggestions for studying strategy process: A research note.
Strategic Management Journal, 13(5), 169–188.
Van de Ven, A. H., & Poole, M. S. (1995). Explaining development and change in
organizations. The Academy of Management Review, 20(3), 510–540.
Wang, Y., & Rajagopalan, N. (2015). Alliance capabilities review and research agenda.
Journal of Management, 41(1), 236–260.
Wilden, R., & Gudergan, S. P. (2015). The impact of dynamic capabilities on operational
marketing and technological capabilities: Investigating the role of environmental
turbulence. Journal of the Academy of Marketing Science, 43(2), 181–199.
Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal,
24(10), 991–995.
Wirtz, B. W., et al. (2007). Strategy in high-velocity environments. Long Range Planning,
40(3), 295–313.
Yin, R. K. (2003). Applications of case study research (applied social research methods) series
(4th edn.). Thousand Oaks: Sage Publications.