The Relation Study Of Dynamic Capabilities, Institution And Business Performance

The research of enterprise's sustainable competitive advantage has always been an important part of Strategy Management Theory (Porter, 1985; Rumelt, 1984). Dynamic Capabilities Theory(represented by Teece et al.) is a powerful tool to solve this problem. Especially in the business environment facing by increasingly complex, volatile (economic globalization) today, Dynamic Capability Theory explain how companies do well in this environment to achieve sustainable competitive advantage. Meanwhile, in this complex environment, especially for the enterprise in countries with economies in transition like China, the Institution can not be neglected and the dynamic capabilities of an important factor in business performance. In this paper, samples of dynamic capability and performance measurement, and modeling through structural equation model(SEM), and illustrates that the dynamic capability, the Institution and the interaction among business performance and their relationships.For the study of this issue has important theoretical and practical significance, its theoretical significance is that the Dynamic Capability Theory (Teece, Eisenhardt, Martin, Zollo, Winter, Zott, Helfat, etc.) as the current strategic management research new, popular research issues, although less than three decades of history, but it integrates theories and schools of many mature point of view, such as the theory of Industrial Organization, evolutionary economics, resource based view (RBV), knowledge-based view (KBV), Enterprise Capability Theory, Organizational Learning Theory, Innovation and Entrepreneurship Theory, etc, so it has good development prospects and vitality. At the same time, Institutional Theory, in particular, the New Institutionalism in Economics (Coase, North, Williamson, etc.), Political Science (Ostrom, Crawford, March, Olsen, Moe, Shepsle, etc.) and Sociology (DiMaggio, Powell, Meyer, Scott, etc.) both are well developed, and because of its neo-classical economics to explain the role of complement, has been a growing number of disciplines and schools in the attention of scholars, many scholars (Coase, North, etc.) stressed that the Institution on the impact of economic behavior is critical to the Institution in addition to traditional economic theory as the three elements (elements of talent, technology and preferences) of the fourth important factor in the development of the Institution, path dependence, interdependence between the various Institutions (complementary) as the basis to the market characteristics of the political structure. Moreover, there are scholars made it clear that a strategy based on the theory of the Institution may become necessary for the global strategic part of literature, and based view of the Institution concept as the basis of following the industry and resource based view of strategic management after another major field of view ( Peng, 2006; Peng, Sun, Pinkham and Chen, 2009). And these two promising theory combined with the more important theoretical significance, both organizational studies, strategic management research, or the embedding of dynamic capabilities, scenario-style Institution of indigenous research are inseparable from the theory (especially The New Institutionalism) with. In addition, its real significance is that by 2010, China overtook Japan as the world's second largest after the U.S. economy. With the increase in the total Chinese economy and the improvement of ranking, we must also see that China's economic development is relatively extensive, there are many important need to optimize the economic structure; China's total population is relatively large, thus the per capita relatively low number, according to various international economic organizations per capita GDP ranking, China ranks 100th. China is a period of economic restructuring is still in the emerging economies, for living in one of the enterprises, how to develop their own capacity to better adapt to the dynamic domestic and external environment and thus achieve sustainable competitive advantage, not only for their own has a very important practical significance, but for our country to economic, social and political aspects to maintain rapid and healthy development and progress are enormous significance.Firstly, there is a detailed literature review of the Dynamic Capabilities theory, the research clarified the definition of dynamic capabilities, its measurement and causes, influencing factors, characteristics and formation mechanism, the relationship between dynamic capabilities and firm performance is also reviewed. Secondly, the research reviewed the literatures related to institutional theory, the definition of the Institution, institutional theory and organizational research, institutional theory and and Dynamic Capabilities theory in areas such as research and elaboration. Thirdly, Dynamic Capabilities, business performance and institutional factors were measured through the issuance in form of questionnaires, and through structural equation models were fitted to the data obtaining related results, the results show that dynamic capabilities can be divided into four dimensions which are capabilities of Environmental Sensing, Organizational Learning, Integration and Reconstruction, and dynamic capabilities on firm performance are more significant positive effect, institutional factors are the impact of dynamic capabilities by indirectly affect performance; Finally, inspiration and policy-related research proposals that in the turbulent and changing environment, companies realize the dynamic ability is an effective way to improve business performance, it should also be noted that, because of economic transformation, institutional factors are important for the enterprises to establishing their dynamic abilities, such as the phenomenon of state capture are more obvious, so companies have to develop their Viability and capabilities as well as Dynamic Capabilities to adapt to this complex environment.The main innovation of this study is the following three points: (1) Basing on summarizing many studies and scholars, this research think that the theory of dynamic capabilities should be integrated in many other schools and learn the benefits and nutrients, such as Industrial Organization theory, Evolutionary Economics science, Resource Based View, Knowledge Based View, Organizational Learning theory, theory of Innovation and Entrepreneurship, while as an important school in the field of strategic management, Dynamic Capabilities theory should draw a lot of economics (New Institutional Economics), Political science, Sociology (Organizational Sociology and the New Economic Sociology), and outstanding ideas of other subjects and theories, avoiding their deficiencies; (2) The combination of Institution Theory (The New Institutionalism) and Dynamic Capability Theory to explain the issues of sustainable competitive advantage in business in emerging economies; (3) This study is carried out based on empirical research which is embedded, scenario-style and Localization.