Exploring micro-foundations of knowledge-based dynamic capabilities in social purpose organizations

Purpose This study aims to explore the micro-foundations of knowledge-based dynamic capabilities (KBDCs) in social purpose organizations (SPOs). The KBDCs facilitate SPOs to successfully manage the acquisition, creation and combination of knowledge to sustain their pursuit of socioeconomic value creation by effectively recognizing and addressing opportunities. Design/methodology/approach This study adopts a multiple-case study research design based on the semi-structured interviews of the founders and top managers of case SPOs. The semi-structured interviews were then compared with the theoretical framework of KBDCs following an abductive research approach. Findings This study identifies that certain capabilities are required to recognize and leverage the opportunities by SPOs. The authors found ten micro-foundations of KBDCs that sustain successful operationalization and overall development in SPOs. By using an abductive reasoning approach, the authors noted that certain KBDCs are essentially required for the operationalization and overall development of SPOs. Research limitations/implications The authors conducted “semi-structured interviews” of founders and top managers that are retrospective in nature. From the implication viewpoint, this study provides insights for practitioners and researchers as it deepens the comprehension and contribution of knowledge and knowledge-related activities and procedures in SPOs. Practical implications KBDCs and their specific micro-foundations can help social entrepreneurs to delineate their idea, strategic processes and actions to achieve effective operationalization and overall sustainable development. Originality/value This study improves the understanding of Teece et al. (1997) theoretical construct of dynamic capabilities (DCs) and extends the framework of Zheng et al. (2011) simultaneously by exploring KBDCs that develop in the context of SPOs. The authors used an abductive reasoning approach that is vital for exploring dynamic capabilities; consequently, this study contributes to the approach of DCs and proffers a methodological advancement that can facilitate future research in this direction.