What Is a Capability and What Does It Matter?

2 October 2007 at 5:41 pm 10 comments

| David Hoopes |

I am often surprised when I present or submit papers because audience members and reviewers find my construct definitions problematic. Often, people find my definitions are too narrow. Also, sometimes others don’t find the scholars whose work I would like to develop merit the attention I give them. This attention sometimes comes in the form of using their definition.  Case in point: Sid Winter and capabilities. In a couple of papers I’m working on my co-authors and I have based our definition of capabilities on one Sid Winter has used in an SMJ paper and a book he edited. Tammy Madsen and I have stuck with Sid’s definition. Steve Postrel and I have taken Sid’s definition and made it more specific to our work. Some readers and listeners have had a hard time with this (and given me a hard time). Now, there’s one “school,” that generally does not like definitions or theoretical constructs to be very narrow. Thus, “can’t X, Y, or Z also be a capability?” “Well, it could be. Just not in this paper.” “Aren’t capabilities just resources?” “Sure. So and So big shot thinks so. We just think of resource and capabilities as being two different things.” Another “school” doesn’t understand why we should care about Sid’s opinion. “Shouldn’t you use Other Big Shot’s definition?” “Well, I don’t really understand her definition. Sid has been doing this capability thing for a while.” “Isn’t it the same as Selznick?” “I don’t think so. Sid doesn’t think so” (see Intro to edited volume with Dosi).

I don’t mind that people prefer other definitions. Yet, I am surprised by how agitated people get. I get agitated by definitions when 1) There aren’t any; 2) I don’t understand what the author/presenter is saying; 3) The definition includes everything and the kitchen sink (presumably because that’s the way life is, “complex”).

So, I stumble along with my narrow definitions and hope not to get yelled at too much.

Entry filed under: Evolutionary Economics, People, Strategic Management.

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10 Comments Add your own

  • 1. Warren Miller  |  2 October 2007 at 10:25 pm

    Hear, hear, David. Dead-on on all counts. Thank you, thank you, thank you. Resources and capabilities ARE different. Sid Winter’s take on capabilities does differ from Selznick’s. Definitions which include the kitchen sink are, in my view, worse than no definitions at all because kitchen-sink definitions have the potential to create a false luster of intellectual respectability. And Tammy Madsen is a terrific colleague and first-rate scholar!

  • 2. Paolo MARITI  |  3 October 2007 at 5:30 am

    To an individual a capability is the quality of being able to do something. The deployment of a capabilitiy may require the use of resources and for this reason – as Warren points out – the two are different.
    However if you look at capabilities from the perspective of a firm, the capabilities of its
    personnel are resources to it.
    One can of course give as many working definitions of both capabilitiy and resource.
    since both terms are intrinsecally dialectical.
    But research conclusions and results are then bounded by those definitions and cannot be generalized.
    Besides the concept of capabilities belongs to the realm of potentialities and that makes things even more “complex”..All in all , I do not think that a theory of the firm or of organization can go very far by using such concepts which are often catch-all words.

  • 3. REW  |  3 October 2007 at 10:13 am

    As my French confreres would say, “Toujours, le dialogue des sourds continue”. I readily admit to stalking out of several paper sessions in recent years where all of the authors spent half of their allotted time defending their idiosyncratic definitions of resource/capability (including the tedious recitation on dynamic/static) and no time on how their paper leads to some useful codification of the constructs beyond the asserted “correct” definition.

    I understand the utility of maintaining separate niches in the intellectual landscape, so as to maximize the number of papers that might be presented/published on capabilities. However, the audience may lose interest in such a solipsistic dialogue of the deaf.

  • 4. ln  |  3 October 2007 at 11:06 am

    I understand the previous speaker’s argument, yet understand that the beginning of this thread not to be about introducing a new idiosyncratic definition of capability, but rather about getting acceptance for basing one specific paper solely on Sidney Winter’s definition. If one can just agree to this definition within the paper, one can move on to more workable codifications building on it, which perhaps is what the paper is about.

    That I respect Sidney Winter’s definition as relevant for building one or more papers on, should not be seen as discounting the contributions of numerous other great scholars, who have dealt with the definition issue.

  • 5. David Hoopes  |  3 October 2007 at 12:46 pm

    Warren: Thanks.
    “Besides the concept of capabilities belongs to the realm of potentialities”


    “I do not think that a theory of the firm or of organization can go very far by using such concepts which are often catch-all words.”

  • 6. David Hoopes  |  3 October 2007 at 12:47 pm

    “I do not think that a theory of the firm or of organization can go very far by using such concepts which are often catch-all words.”

    Well said.

  • 7. David Hoopes  |  3 October 2007 at 1:07 pm

    My point was that I did not want to talk on and on about how many ways a capability can be defined. As you point out, the definition is only as useful as the work it allows you to do. I would prefer the field to converge on some definitions so that discussion can move on to substantive issues.

    In: That I see my work building on Nelson and Winter (among)many others) doesn’t mean I have to dismiss every other approach to capabilities. So, I agree with you.

    I think one of the patterns that the RBV gets stuck in is continually re-slicing and re-dicing how to define a resource. I think this “discussion” becomes over-wrought when the definitions are so general and all-encompassing as to be vague.

    A lot of this “discussion” is verbal theory (since Nicolai doesn’t like the term conceptual). Without the discipline of an empirical specification or the clarity required in formal models many such “theories” end up being poorly specified. Or, again, vague.

    As implied by REW, the definition of construct is only as good as the understanding is leads to. Steve and I like to think that our defining capabilities as “a probability density of outputs conditional on what is requested…” (Hoopes and Postrel ,2007) is important to both our empirical work and our theories of capability development. Similarly, Tammy Madsen and I stick closer to Sid’s 2000 SMJ defintion because it does make distinuishing a capability from its inputs and outputs pretty easy theoretically and empirically.

    And I don’t use Sid’s definition just because he is Sid. It’s because Sid is a very rigorous thinker. He carefully builds on his own and others’ previous work. Whether everyone involved RBV debates knows it or not, his work has had a profound impact on how scholars think about capabilities and the myriad theories that use capabilities to explain things (firm and industry evolution, competitive heterogeneity, competitive advantage…)

    Well that’s enough said for me.

  • 8. spostrel  |  3 October 2007 at 8:31 pm

    It’s tempting to just coin a new term so people don’t think you’re trying to be imperialistic. Maybe call it a “bezinka” or a “gloobersnick” instead of a capability. Then you can talk about the “bezinka theory of X” or the “X hypothesis about gloobersnicks” and nobody can carp.

  • 9. David Hoopes  |  3 October 2007 at 9:50 pm

    Steve, you are just so darn helpful.

  • 10. David Hoopes  |  12 December 2009 at 3:49 am

    Post Script:
    Sid Winter won SJM’s best paper award for his 2003 paper on Dynamic Capabilities. I think it’s a great paper and never understood why I got so much grief using it as a foundation for discussing capabilities.

    Yay Sid (and Dick Nelson who got an award for his paper, “How Do Firms Differ?” What a cool topic).

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