How did a local guerrilla turn into a global gorilla? Learning how transformational change happened under dynamic capabilities from the rise of Huawei

Abstract

PurposeIn this paper, the authors tentatively develop a theoretical model that depicts how the dynamic capabilities of a firm may be driven by three macro-organizational foundations: visionary leadership, organizational culture, and empowered human resources. The authors propose that visionary leaders are the original driver of dynamic capabilities and that visionary leaders create a unique organizational culture and empowered human resources so that their organizations embrace the spirit of entrepreneurship, an orientation toward learning, and a commitment to mission-driven improvement.Design/methodology/approachThe authors use a case of the early success of a highly performing Chinese telecommunication equipment producer, Huawei Technology, to explain the theoretical model that shows how dynamic capabilities are developed as visionary leaders influence firm routines for learning, innovation, and strategic human resource policies, which in turn collectively create and update operational capabilities to deliver directly manipulatable competitive advantages.FindingsThe paper concludes by arguing that the sources of dynamic capabilities need not be dynamic. Instead, visionary leadership, organizational culture, and human resource policies are relatively stable factors in comparison with other possible competence-building mechanisms such as innovation or ambidexterity.Practical implicationsThe authors’ model provides a direction for firms in high-tech industries to develop dynamic capabilities in order to maintain competitiveness and sustain high performance.Originality/valueThis paper is the first to present three macro-level drivers of dynamic capabilities, and it is also the first to understand the success of Huawei from a dynamic capabilities perspective.