Managerial Capabilities. Managerial capabilities were defined by Lado, Boyd, and Wright (1992) as possessing the ability to create a strategic vision and identity for the company, communicate these throughout the organization, and encourage the workforce to achieve them. For Boyatzis (1999), these organizational capabilities also include the company’s ability to formulate strategic planning processes and to design both the organization and the individual position, as well as to coordinate the different functions and departments involved. The literature
suggests four main managerial capabilities:“reinforcement of the organizational culture,”“strategic vision,” “obtaining employee potential,” and “flexible design”(Boyatzis, 1999; Lado & Wilson, 1994; Turner & Crawford, 1994).
Technical Capabilities. Within this group we have included input-based and transformational capabilities (Lado, Boyd, & Wright, 1992). These are organizational capabilities that contribute at the time of turning inputs into outputs. Essentially, they refer to the technological aspects of the creation, production, and development of products and services (Turner & Crawford, 1994). Technical capabilities are consistent with the notion of core competence put forward by Prahalad and Hamel (1990) and directly associated with the CEs themselves. Prahalad and Hamel focus on the collective learning process of an organization regarding the different productive abilities or skills and streams of technology (1990). Hammer and Champy (1993) and Teece et al. (1997) emphasize
the necessity of “creative destruction” for gaining competitive advantage. The
technical capability for “innovation” is key to carrying out new combinations of resources, methods, systems, and processes to generate new products
and services that fill actual and potential needs of customers.
Firms with this ability can earn and sustain greater returns than those without it (Upton, 1994).
