An Empirical Study Of Firm’s Dynamic Capabilities And Social Ties Influencing Organization Performance

With the aggravation of environmental dynamism, dynamic capabilities theory has be the hot area of research to help firms to obtain performance. What’s more, the firm’s social ties have become new instruments for enhancing performance, which could replace the formal institutions to some extent during China’s economy transformation. However, the study found that operational capabilities are directly related to the performance during the real operation process, while dynamic capabilities as firm’s higher-order abilities, can’t directly influence performance, and the same to the firm’s social ties, which are the firm’s non-productive and valuable resources. While there are many papers about firm’s performance from dynamic capability view, no one considers the relationships among firm’s social ties, dynamic capabilities, operational capabilities and firm’s performance.In this research, we explored the action mechanism of the firm’s dynamic capabilities, social ties and operational capabilities for performance. Based on the discussion about the action mechanism of firm’s performance, we proposed a conceptual model. Firstly, we identified four dimensions of dynamic capabilities by analyzing the action mechanism of dynamic capabilities for operational capabilities:sensing capability, learning capability, integrating capacity, innovation capability. Operational capabilities included technical capability, marketing capability and managerial capability. We also introduced the variable of environmental dynamism to test the results of the research model during different degrees of environmental dynamism, which included the dimensions of market dynamism, technological dynamism and policy dynamism. Then, based on the relationships between the variables, we proposed7hypotheses. What’s more, the structural equation model was established, dynamic capabilities and social ties as the independent variables, operational capabilities as a mediating variable, and firm’performance as the dependent variables. Through the survey, we collected164valid questionnaires, and then the model and hypotheses were tested.The empirical study results have showed that firm’s dynamic capabilities and social ties have no significantly direct effects on firm’s performance, but play significant indirect effects through operational capabilities. The relationship of operational capabilities and firm performance is significant. Both dynamic capabilities and firm’s social ties influence operational capabilities significantly. What’s more, in the lower dynamic environment, the relationships of dynamic capabilities and firm’s performance, firm’s social ties and performance, are fully mediated by operational capabilities; but in the higher dynamic environment the operational capabilities play partial mediate roles. Finally, there are some suggestions promoted for enterprises:firm should try to cultivate firm’s dynamic capabilities and operational capabilities, and maintain good relations with business groups and government departments.