The Dynamics of Strategic Capability

International Business Research

January, 2010

The Dynamics of Strategic Capability
Jokull Johannesson
Northampton Business School
University of Northampton
E-mail: [e-mail]
Iryna Palona
University of Liverpool
Abstract
The strategic capability concept and its integration into the strategic planning process in international business have not been sufficiently explored as its conflicting definitions indicate. Moreover international managers may not be aware of the need for strategic capability because, the strategic capability paradigm for international business has not been sufficiently conceptualized and explored. Therefore this paper reviews how the business environment influences strategic capability, explains the elements of strategic capability, how strategic capability is integrated into the strategic planning, and gives some suggestions for future research on the strategic capability paradigm as it pertains to international businesses.
Keywords: Strategic Capability, Business Environment, Strategy
1. Introduction
Every business in order to survive and thrive in a competitive business environment needs to possess a certain level of strategic capability. The type of strategic capability that the company needs at a specific time is determined by the legitimizing forces and the threats/opportunities in the future business environment (Ansoff, 1984: 177).
Legitimizing forces are the factors that establish the purpose of the international business and the criteria for its success.
These forces evolve from the external environment of the international business and involve: The determination of the key attributes measuring successes in the international business (Vogel, 1991); the determination of the aggressiveness of behavior pertaining to each key attribute (Grahame, 1991); the determination of the rules of the game for the international business organization (Farrell, 1991; Grahame, 1991); the

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