Chapter 3. Routines and Adhocism: How (Dynamic) Capabilities Allow for the
3.2 Dynamic capabilities and related concepts
3.2.2 What dynamic capabilities are not
Routines comprise a large part of organizational functioning (Winter, 2003). Even so, scholars have uncovered that in many cases, organizational-level factors guiding managers’ actions might be absent (Kaplan, 2008). Some actions are executed only once or several times and in these cases, the benefits from maintaining capabilities may not cover the expenses (Winter, 2003; Teece, 2012). In other cases, an organization might not have
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been able to develop desired capabilities (Eggers and Kaplan, 2013). In such cases, scholars have described that managerial cognition can be a substitute for capabilities (Kaplan, 2008;
Eggers and Kaplan, 2013). Winter (2003) has described ad hoc problem solving as a direct substitute to dynamic capabilities in these cases in which organizational-level factors might be absent. To concretize this problem-solving approach, we reach out to the case of the Ebola outbreak in 2014. Even though the outbreak does not reflect managerial action, using the sad case of nurse Briana Aguirre helps us to better grasp how the principle of ad hoc problem solving may manifest in the real world and will enable us to subsequently project it to managerial action. During the global Ebola outbreak, a Texas nurse was diagnosed with having Ebola. As she reflects on her infection, she describes that the reasons why it couldn’t be prevented were that she lacked relevant experience and that the hospital had not provided her with information on how to deal with Ebola. Nurse Briana Aguirre says that she and her colleagues did not know what protocol to follow in case a patient with Ebola arrived3 and in a filed lawsuit of nurse Nina Pham, the following can be read4:
‘Nina was shocked. She had never been trained to handled infectious diseases, never been told anything about Ebola, how to treat Ebola, or how to protect herself as a nurse treating an Ebola patient. The hospital had never given her any ... training or guidance about Ebola. All Nina knew about Ebola is what she had heard on television.’
Ad hoc problem solving is an action of an individual or groups of individuals that does not stem from organizational guiding or governing principles. Thus, it differs from dynamic managerial capabilities deployment in an important way. Whereas the former displays ‘creative’ problem solving, the latter displays routine-based problem solving (Lampel et al., 2014). In the aforementioned case of the Ebola outbreak, nurses did not know how to act because the problem (Ebola) was not encountered before, nor were any approaches institutionalized. Thus, it is a problem that resembles what Winter (2003) calls
3 http://www.businessinsider.com/nurse-at-texas-health-presbyterian-speaks-about-ebola-crisis-2014-10?IR=T
4 http://www.scribd.com/doc/257697491/Nina-Pham-Petition
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‘novel’ or ‘unpredictable’. Ad hoc problem solving might be in particular relevant to core tasks of organizations as these tend to be ‘highly uncertain and difficult to prespecify or codify into standards’ (Kwon, 2008). Translating this case to business, we argue that ad hoc problem solving may be of vital importance to top management in novel and unpredictable scenarios. Ad hoc problem solving
As ad hoc problem-solving is reached out for when in the absence of organizational guiding and governing factors, we propose that ad hoc problem solving is primarily dependent on the managerial experience of individuals or teams and their utilization of knowledge that past individual experiences have brought them through managerial cognition. These individual properties are then utilized to bring about ‘creativeness’ in the sense that these solutions are essentially non-routine (Teece, 2012) and should bring forward approaches that are new to the firm (Harvey, 2014), but not necessarily new to each individual within the firm and thus not necessarily creative to each person (George, 2007).
Greatest changes are produced in the absence of organizational features that limit the extent to which managers can break away from past paths (Gilson et al., 2005). With this, we however do not mean that managers that engage in ad hoc problem-solving cannot benefit from guidelines, routines or standard operating procedures that might e.g. preserve their cognitive capacity (Becker, 2004). Nor do we mean that creativity cannot be informed from past organizational paths (George, 2007). Rather, we mean that the ‘actual organizational creative act’ as a means of ad hoc problem-solving stems in our understanding from the unbound utilization of knowledge, accrued by managerial experience and made use of through managerial cognition. Scholars suggest that managers select appropriate experiences through cognitive encoding and consequently utilize this experience by cognitive retrieval (Eggers and Kaplan, 2013; Maitland and Sammartino, 2015).
Ad hoc problem-solving can be exercised by managers that are already employed by the organization that faces a complex problem, because, as aforementioned, not all individual experiences become translated to the organizational level, especially not if there has not been any reason or possibility to develop any routines and capabilities (Eggers and Kaplan, 2013) and costs of maintaining capabilities might have been simply too high to weigh up to their benefits (Winter, 2003)
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In the absence of managers with relevant experience, another possibility would be to consult organizational social capital to acquire the experiences and knowledge that have been missing to be able to effectively cope with the problem at hand (Guthrie and Datta, 2008; Gittell et al., 2010). By utilizing social capital, organizations in troublesome situations can narrow down the scope of a problem by constructing heuristics based on these external experiences (Bingham and Eisenhardt, 2014), or at least ensure effectiveness of treatments by being able to draw from proven knowledge (Garud and Nayyar, 1994). The quality of this approach will be dependent on the quality of organizational social capital (Tsai and Ghoshal, 1998).
Finally, organizations can recruit someone from outside the firm, such as interim-managers (Teece, 2012). By gathering around the person or people that possess relevant experience and knowledge, and sharing that knowledge with other members of the management team, the experience can become a shared experience and the knowledge can be a shared knowledge (Kor, 2006). Based on the cognitive understanding of the management team, shared experience can provide the input for momentarily solving the problem (Eggers and Kaplan, 2013). Eventually, experiences related to solving this particular problem can be institutionalized at the organizational level for use in future problems (Garud and Nayyar, 1994; Carpenter et al., 2003; Eggers and Kaplan, 2013).