Home The Dynamic Capabilities of High-Turbulent Markets: Indonesian Start-Up Cases During COVID-19 Pandemic
Article
Licensed
Unlicensed Requires Authentication

The Dynamic Capabilities of High-Turbulent Markets: Indonesian Start-Up Cases During COVID-19 Pandemic

  • Indria Handoko ORCID logo EMAIL logo and Hendro Adiarso Tjaturpriono
Published/Copyright: April 20, 2023

Abstract

This study explores how start-ups manage high-turbulent markets during the first six-months of the COVID-19 pandemic, and how dynamic capabilities are operationalized in that situation. A multiple-case study approach was employed to investigate eight start-up cases in Indonesia. Indonesia was chosen to represent an emerging economy with a tremendous growing number of start-ups. The data are presented based on the evolving circumstances of the COVID-19 crisis. The research findings illustrate how dynamic capabilities are operationalized simultaneously with the validation of adjusted business models through simple-experiential routines, iterative executions, and action-oriented processes amidst the high-turbulent markets. Dynamic capabilities that operate in full combination by sensing, seizing, and transforming capabilities potentially can facilitate the creation of values for firms faster than otherwise. This study also identifies specific elements and alignment mechanisms incorporated in the dynamic capabilities.


Corresponding author: Indria Handoko, School of Business and Economics, Universitas Prasetiya Mulya, RA Kartini, Cilandak Barat, 12430, Jakarta, Indonesia E-mail:

References

Agarwal, R., A. Santoso, K. T. Tan, and P. Wibowo. 2021. “Ten Ideas to Unlock Indonesia’s Growth after COVID-19”. McKinsey. May 3. https://www.mckinsey.com/featured-insights/asia-pacific/ten-ideas-to-unlock-indonesias-growth-after-covid-19 (Accessed October 3, 2021).Search in Google Scholar

Alvarez, S., and L. W. Busenitz. 2001. “The Entrepreneurship of Resource-Based Theory.” Journal of Management 27 (6): 755–75. https://doi.org/10.1177/014920630102700609.Search in Google Scholar

Ambrosini, V., and C. Bowman. 2009. “What Are Dynamic Capabilities and Are They a Useful Construct in Strategic Management?” International Journal of Management Reviews 11 (1): 29–49. https://doi.org/10.1111/j.1468-2370.2008.00251.x.Search in Google Scholar

Argote, L. 1999. Organizational Learning: Creating, Retaining, and Transferring Knowledge. Boston: Kluwer Academic.Search in Google Scholar

Aulet, B. 2013. Disciplined Entrepreneurship: 24 Steps to a Successful Startup. Hoboken: John Wiley & Sons.Search in Google Scholar

Baker, T., and R. E. Nelson. 2005. “Creating Something from Nothing: Resource Construction through Entrepreneurial Bricolage.” Administrative Science Quarterly 50 (3): 329–66. https://doi.org/10.2189/asqu.2005.50.3.329.Search in Google Scholar

Barreto, I. 2009. “Dynamic Capabilities: A Review of Past Research and an Agenda for the Future.” Journal of Management 36 (1): 256–80. https://doi.org/10.1177/0149206309350776.Search in Google Scholar

Berends, H., M. Jelinek, I. Reymen, and R. Stultiëns. 2014. “Product Innovation Processes in Small Firms: Combining Entrepreneurial Effectuation and Managerial Causation.” Journal of Product Innovation Management 31 (3): 616–35. https://doi.org/10.1111/jpim.12117.Search in Google Scholar

Blank, S. 2013. “Why the Lean Start-Up Changes Everything.” Harvard Business Review 91 (5): 63–72.Search in Google Scholar

Bryman, A., and B. Burgess. 2002. Analyzing Qualitative Data. London: Routledge.10.4324/9780203413081Search in Google Scholar

Burns, P. 2016. Entrepreneurship and Small Business, 4th ed. London: Palgrave Macmillan Limited.10.1007/978-1-137-43034-2Search in Google Scholar

Carland, J. 2015. “Seeing What’s Not There: The Enigma of Entrepreneurship.” Journal of Small Business Strategy 7 (1): 1–20.Search in Google Scholar

Chaparro, X. A. F., and L. A. V. Gomes. 2021. “Pivot Decisions in Startups: A Systematic Literature Review.” International Journal of Entrepreneurial Behavior & Research. Advance online publication 27 (4): 884-910, https://doi.org/10.1108/ijebr-12-2019-0699.Search in Google Scholar

Doern, R., N. Williams, and T. Vorley. 2019. “Special Issue on Entrepreneurship and Crises: Business as Usual? An Introduction and Review of the Literature.” Entrepreneurship & Regional Development 31: 400–12. https://doi.org/10.1080/08985626.2018.1541590.Search in Google Scholar

Eisenhardt, K. M. 1989. “Building Theories from Case Study Research.” Academy of Management Review 14 (4): 532–50. https://doi.org/10.5465/amr.1989.4308385.Search in Google Scholar

Eisenhardt, K. M., and M. E. Graebner. 2007. “Theory Building from Cases: Opportunities and Challenges.” Academy of Management Journal 50 (1): 25–32. https://doi.org/10.5465/amj.2007.24160888.Search in Google Scholar

Eisenhardt, K. M., and J. A. Martin. 2000. “Dynamic Capabilities: What Are They?” Strategic Management Journal 21: 1105–21. https://doi.org/10.1002/1097-0266(200010/11)21:10/11<1105::aid-smj133>3.0.co;2-e.10.1002/1097-0266(200010/11)21:10/11<1105::AID-SMJ133>3.0.CO;2-ESearch in Google Scholar

Enkel, E., and V. Sagmeister. 2020. “External Corporate Venturing Modes as New Way to Develop Dynamic Capabilities.” Technovation 96–97: 1–14. https://doi.org/10.1016/j.technovation.2020.102128.Search in Google Scholar

Feng, N., C. Fu, F. Wei, Z. Peng, Q. Zhang, and K. H. Zhang. 2019. “The Key Role of Dynamic Capabilities in the Evolutionary Process for a Startup to Develop into an Innovation Ecosystem Leader: An Indepth Case Study.” Journal of Engineering and Technology Management 54: 81–96. https://doi.org/10.1016/j.jengtecman.2019.11.002.Search in Google Scholar

Foss, N. J., and P. G. Klein. 2017. “Entrepreneurial Discovery or Creation? In Search of the Middle Ground.” Academy of Management Review 42 (4): 733–6. https://doi.org/10.5465/amr.2016.0046.Search in Google Scholar

Freeman, J., and J. S. Engel. 2007. “California Management Models of Innovation: Startups and Mature Corporations.” California Management Review 50 (1): 94–119. https://doi.org/10.2307/41166418.Search in Google Scholar

Gibbert, M., W. Ruigrok, and B. Wicki. 2008. “What Passes as a Rigorous Case Study?” Strategic Management Journal 29 (13): 1465–74. https://doi.org/10.1002/smj.722.Search in Google Scholar

Glaser, B. G., and A. L. Strauss. 1967. The Discovery of Grounded Theory: Strategies for Qualitative Research. New York: Aldine De Gruyter.10.1097/00006199-196807000-00014Search in Google Scholar

Hamel, G., and L. Valikangas. 2003. “The Quest for Resilience.” Harvard Business Review 81: 52–63.Search in Google Scholar

Hanchi, S. E., and L. Kerzazi. 2020. “Startup Innovation Capability from a Dynamic Capability-Based View: A Literature Review and Conceptual Framework.” Journal of Small Business Strategy 30 (2): 72–92.Search in Google Scholar

Helfat, C. E. 1997. “Know-How and Asset Complementary and Dynamic Capability Accumulation: The Case of R & D.” Strategic Management Journal 18: 339–60, https://doi.org/10.1002/(SICI)1097-0266(199705)18:5%3C339::AID-SMJ883%3E3.0.CO;2-7.10.1002/(SICI)1097-0266(199705)18:5<339::AID-SMJ883>3.0.CO;2-7Search in Google Scholar

Helfat, C. E., S. Finkelstein, W. Mitchell, M. Peteraf, H. Singh, D. Teece, and S. Winter. 2007. Dynamic Capabilities: Understanding Strategic Change in Organizations. Singapore: Blackwell Publishing.Search in Google Scholar

Helfat, C. E., and M. A. Peteraf. 2009. “Understanding Dynamic Capabilities: Progress along a Developmental Path.” Strategic Organization 7 (1): 91–102. https://doi.org/10.1177/1476127008100133.Search in Google Scholar

Ho, T. H., and C. S. Tang. 2004. “Introduction to the Special Issue on Marketing and Operations Management Interfaces and Coordination.” Management Science 50 (4): 429–30. https://doi.org/10.1287/mnsc.1030.0171.Search in Google Scholar

Irwin, K. C., C. M. Gilstrap, P. L. Drnevich, and C. M. Tudor. 2019. “From Start-Up to Acquisition: Implications of Financial Investment Trends for Small- to Medium-Sized High-Tech Enterprises.” Journal of Small Business Strategy 29 (2): 22–43.Search in Google Scholar

Korber, S., and R. B. McNaughton. 2018. “Resilience and Entrepreneurship: A Systematic Literature Review.” International Journal of Entrepreneurial Behavior & Research 24: 1129–54. https://doi.org/10.1108/IJEBR-10-2016-0356.Search in Google Scholar

Kost, D. 2020. “COVID Not Slowing VC Investment”. Harvard Business School Working Knowledge. https://hbswk.hbs.edu/item/covid-not-slowing-vc-investment (Accessed September 25, 2021).Search in Google Scholar

Kuckertz, A., L. Brändle, A. Gaudig, S. Hinderer, C. Arturo Morales Reyes, A. Prochotta, K. M. Steinbrink, and E. S. Berger. 2020. “Startups in Times of Crisis—A Rapid Response to the COVID-19 Pandemic.” Journal of Business Venturing Insights e00169. https://doi.org/10.1016/j.jbvi.2020.e00169.Search in Google Scholar

Leih, S., Linden, G., and Teece, D. 2015. Business Model Innovation and Organizational Design. In Business Model Innovation. UC Berkeley Previously Published Works. Also available at https://escholarship.org/uc/item/49x3z5jj.10.1093/acprof:oso/9780198701873.003.0002Search in Google Scholar

Ma, H., C. Lang, Q. Sun, and D. Singh. 2021. “Capability Development in Startup and Mature Enterprises.” Management Decision 59 (6): 1442–61. 10.1108/MD-03-2020-0313.10.1108/MD-03-2020-0313Search in Google Scholar

Martinelli, E., G. Tagliazucchi, and G. Marchi. 2018. “The Resilient Retail Entrepreneur: Dynamic Capabilities for Facing Natural Disasters.” International Journal of Entrepreneurial Behavior & Research 24: 1222–43. https://doi.org/10.1108/ijebr-11-2016-0386.Search in Google Scholar

McKelvie, A., and P. Davidsson. 2009. “From Resource Base to Dynamic Capabilities: An Investigation of New Firms.” British Journal of Management 20: S63–80. https://doi.org/10.1111/j.1467-8551.2008.00613.x.Search in Google Scholar

Miles, M. B., and A. M. Huberman. 1994. An Expanded Sourcebook, Qualitative Data Analysis. California: SAGE Publications.Search in Google Scholar

Montealegre, R. 2002. “A Process Model of Capability Development: Lessons from the Electronic Commerce Strategy at Bolsa de Valores de Guayaquil.” Organization Science 13 (5): 514–31. https://doi.org/10.1287/orsc.13.5.514.7808.Search in Google Scholar

Murphy, G., N. Tocher, and T. Burch. 2019. “Small Business Owner Persistence: Do Personal Characteristics Matter?” Journal of Small Business Strategy 29 (1): 99–114.Search in Google Scholar

O’Toole, J., Y. Gong, T. Baker, D. T. Easley, and A. S. Miner. 2020. “Startup Responses to Unexpected Events: The Impact of the Relative Presence of Improvisation.” Organization Studies 1 (25). https://doi.org/10.1177/0170840620937859.Search in Google Scholar

Pavlou, P. A., and O. A. El Sawy. 2010. “The “Third Hand”: IT-Enabled Competitive Advantage in Turbulence through Improvisational Capabilities.” Information Systems Research 21 (3): 443–71. https://doi.org/10.1287/isre.1100.0280.Search in Google Scholar

Penrose, E. T. 1959. The Theory of the Growth of the Firm. New York: John Wiley.Search in Google Scholar

Pentland, B. T. 1999. “Building Process Theory with Narrative: From Description to Explanation.” Academy of Management Review 24 (4): 711–24. https://doi.org/10.5465/amr.1999.2553249.Search in Google Scholar

Rindova, V., and S. Taylor. 2002. “Dynamic Capabilities as Macro and Micro Organizational Evolution.” Robert H. Smith School of Business-Smith Papers Online 1 (11): 1–11.Search in Google Scholar

Rui, Z., and X. Ma. 2020. “The Contingent Effects of New Venture’s Improvisational Capability and Ambidextrous Search.” IEEE Transactions on Engineering Management 69 (5): 2349–60, https://doi.org/10.1109/tem.2020.3012035.Search in Google Scholar

Saunders, M., D. Lewis, and A. Thornhill. 2015. Research Methods for Business Students. Essex: Pearson International Content.Search in Google Scholar

Strauss, A., and J. Corbin. 1990. Basics of Qualitative Research, Grounded Theory Procedures and Techniques. London: SAGE Publications.Search in Google Scholar

Teece, D. J. 2007. “Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance.” Strategic Management Journal 28 (13): 1319–50. https://doi.org/10.1002/smj.640.Search in Google Scholar

Teece, D. J. 2010. “Business Models, Business Strategy and Innovation.” Long Range Planning 43 (2–3): 172–94. https://doi.org/10.1016/j.lrp.2009.07.003.Search in Google Scholar

Teece, D. J. 2012. “Dynamic Capabilities: Routines versus Entrepreneurial Action.” Journal of Management Studies 49: 1395–401. https://doi.org/10.1111/j.1467-6486.2012.01080.x.Search in Google Scholar

Teece, D. J. 2018. “Business Models and Dynamic Capabilities.” Long Range Planning 51 (1): 40–9. https://doi.org/10.1016/j.lrp.2017.06.007.Search in Google Scholar

Teece, D. J., G. Pisano, and A. Shuen. 1997. “Dynamic Capabilities and Strategic Management.” Strategic Management Journal 18 (7): 509–33. https://doi.org/10.1002/(sici)1097-0266(199708)18:7<509::aid-smj882>3.0.co;2-z.10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-ZSearch in Google Scholar

Van de Ven, A. H., and M. S. Poole. 2005. “Alternative Approaches for Studying Organizational Change.” Organization Studies 26 (9): 1377–404. https://doi.org/10.1177/0170840605056907.Search in Google Scholar

Velu, C. 2015. “Business Model Innovation and Third-Party Alliance on the Survival of New Firms.” Technovation 35: 1–11. https://doi.org/10.1016/j.technovation.2014.09.007.Search in Google Scholar

Wang, D., E. C. Pahnke, and R. M. McDonald. 2022. “The Past Is Prologue? Venture-Capital Syndicates’ Collaborative Experience and Start-Up Exits.” Academy of Management Journal 65 (2): 371–402. https://doi.org/10.5465/amj.2019.1312.Search in Google Scholar

Williams, T. A., D. A. Gruber, K. M. Sutcliffe, D. A. Shepherd, and E. Y. Zhao. 2017. “Organizational Response to Adversity: Fusing Crisis Management and Resilience Research Streams.” The Academy of Management Annals 11: 733–69. https://doi.org/10.5465/annals.2015.0134.Search in Google Scholar

Winter, S. G. 2003. “Understanding Dynamic Capabilities.” Strategic Management Journal 24: 991–5. https://doi.org/10.1002/smj.318.Search in Google Scholar

Yin, R. K. 2009. Case Study Research, Design, and Methods. California: SAGE Publications, Inc.Search in Google Scholar

Zahra, S. A., H. J. Sapienza, and P. Davidsson. 2006. “Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda.” Journal of Management Studies 43 (4): 917–55. https://doi.org/10.1111/j.1467-6486.2006.00616.x.Search in Google Scholar

Zollo, M., and S. G. Winter. 2002. “Deliberate Learning and the Evolution of Dynamic Capabilities.” Organization Science 13 (3): 339–51. https://doi.org/10.1287/orsc.13.3.339.2780.Search in Google Scholar

Zott, C., and R. Amit. 2008. “The Fit between Product Market Strategy and Business Model: Implications for Firm Performance.” Strategic Management Journal 29 (1): 1–26. https://doi.org/10.1002/smj.642.Search in Google Scholar

Received: 2022-05-30
Accepted: 2023-04-01
Published Online: 2023-04-20

© 2023 Walter de Gruyter GmbH, Berlin/Boston

Articles in the same Issue

  1. Frontmatter
  2. Competitive Research Articles
  3. Impact of Entrepreneurial Orientation on MSME Performance: Mediating Role of Entrepreneurial Competency
  4. The Development of Corporate Entrepreneurship among Emerging Economy SMEs: Insights from Both Institutional and Contingency Theory
  5. The Dynamic Capabilities of High-Turbulent Markets: Indonesian Start-Up Cases During COVID-19 Pandemic
  6. Entrepreneurship, Resource Rents and Institutions
  7. The Scaling Strategies and the Scaling Performance of Chinese Social Enterprises: The Moderating Role of Organizational Resources
  8. Research on Corporate Entrepreneurship in Developing Countries: A Review and Agenda for Future Directions
  9. The Impact of Initial Intellectual Property Decisions of Start-Ups on Innovation Performance
  10. Social Capital and Innovative Performance in Networks: The Journey of Romanian SaaS Entrepreneurs
  11. Gender Differences in the use of Social Capital for Entrepreneurial Activity Within Contexts of Poverty
  12. Commitment Helps: The Positive Effects of Long-Term Orientation and Family Ownership on Firms’ International Expansion
  13. Institutional Environment, Executive Equity Incentive, and Enterprise Innovation: The Case of China
  14. Determinants of Entrepreneurial Employee Activity in Saudi Arabia
  15. How Does Entrepreneurial Role Model Connect to Entrepreneurial Perceptions: The Moderating Role of Psychological Distance
  16. The Influence of Top Management’s Strategic Planning Capacity and Entrepreneurial Orientation on Corporate Entrepreneurship
  17. Innovation Ambidexterity and Firm Performance: The Moderating Effects of Contextual Factors
Downloaded on 12.9.2025 from https://www.degruyterbrill.com/document/doi/10.1515/erj-2022-0225/html
Scroll to top button