The German University in Cairo

Faculty of Management Technology

Students Name:

Hana Anous 52-6617

Mariam El Sabak 52-3453

Nayera Khalaf 52-1699

Tutorial Number: 4

Article Name:

“Competence destroying discontinuities”

Date: 3/3/2024

Summary :
The article discusses the way firms adapt to discontinuous changes in their external
environment. It focused on the concept of dynamic capabilities. It also mentioned the three
categories of dynamic capabilities which are sensing, seizing, and reconfiguring, and their
role in helping firms adapt to discontinuous change. The study mentioned three case studies
of firms including Nestle, GSK, and BMW and their specific modes of adoption. Nestle
utilised structural separation, GSK focused on behavioural integration and BMW emphasised
sequential alternation to adapt to the changing business environment. The article also
highlighted the importance and role of a firm's vision, culture, and people development model
in enabling and strengthening modes of adaptation. Additionally, it discusses the
methodology used for the research which involved conducting three longitudinal comparative
case studies to clarify and explain how firms use different organisational modes and their
related dynamic capabilities to adapt to discontinuous change.

Question 1: What are dynamic capabilities? How does this concept differ from traditional
management practices in adopting to change?

It is the ability to develop, enhance, and maintain a company’s assets through sensing
opportunities and threats, seizing these opportunities by using resources, and reconfiguring by
adapting to change. These dynamic capabilities are vital for businesses to succeed in a
rapidly changing environment. Unlike the basic capabilities which only work in slow moving
environments and would not overcome discontinuous change.

Question 2: Define the concept “Ambidexterity” in organisational settings

The ability of an organisation to successfully handle various demands, especially when it

comes to exploration and exploitation is referred to as ambidexterity. It is important to
comprehend how businesses can continue to take advantage of their current resources and
markets while also investigating new ones. It includes three opposing approaches to
reconciliation: sequential alternation, behavioural integration, and structural separation. Each
of these approaches calls for different organisational configurations and competencies. For
businesses that are experiencing sudden shifts, ambidexterity is essential since it allows them
to adjust to new environmental obstacles without disrupting their current business processes.
Question 3: What is the role of organisation culture in the ability to respond to discontinuous
change?

The capacity of an organisation to adapt to sudden shifts is greatly influenced by its culture.
According to the study, the firm's strategy for adjusting to discontinuities is influenced by its
organisational legacy, which includes its vision, culture, and people development. According
to this, a company is more likely to select one adaptation strategy over another if it has a
specific organisational heritage. the ability of top executives to intentionally choose a new
mode of adaptation and make corresponding changes to organisational qualities makes their
involvement in influencing the organisational heritage all the more important. organisational
culture must be in line with the selected form of adaptation to effectively respond to change.

Question 4: Discuss the three modes of adoption proposed in the articles? (Structural
separation, Behavioral Integration, Sequential alteration)

There are 3 approaches firms could implement to be able to adapt to discontinuous change.
Firstly, a structural separation involves separating exploration and exploitation activities into
different organisational units. Secondly, behavioural integration involves developing a
behavioural context to make employees handle different organisational objects
simultaneously in a single unit. Lastly, sequential alteration involved frequently shifting
attention between explorative and exploitative activities.

Question 5: In your own words, Describe how each mode of adaptation impacts the
development of dynamic capabilities?

Each mode of adaptation requires different levels of capability set (levels of sensing and
seizing and reconfiguring) . This means that the nature of dynamic capabilities in each mode
is different. In structural separation, firms manage the exploration activities with sensing
capability and exploitation activities with seizing capability. Firms using behavioural
integration mode allow sensing and seizing opportunities at the same time using a behavioural
context. In sequential alteration, firms alternate between sensing and seizing. All 3 modes are
sustained through reconfiguring capabilities.

Linking to the lecture:

The lecture highlighted the importance of companies embracing innovation and starting new
businesses to adapt to changing market demands. It emphasises the need to find a balance
between current operations and exploring new opportunities for growth. The lecture also
discusses the reliance on customers and investors highlighting the importance of meeting
diverse customer needs and considering new ventures. It also distinguishes between internal
corporate ventures which encourage entrepreneurial thinking within the company and external
ventures which involve investing in external companies for innovation. The lecture also
mentioned the meaning and importance of being an Ambidextrous organisation which is able
to compete by both exploiting their current capabilities and exploring new ones. The article
and the lecture content both focused on addressing the challenges and opportunities of
embracing disruptive technologies and fostering corporate new ventures. They highlighted the
importance of companies adapting to changes in the external environment and the role of
dynamic capabilities in helping firms adapt to discontinuous change. Both used different Case
studies of firms to showcase their specific modes of adoption or experiences with corporate
new ventures. Both also recognized the significance of a firm's vision, culture and people
development model in enabling adaptation.