Emergence of Dynamic Capabilities for Entrepreneurship: Insights from Extreme Cases

In this paper we tackle the question how entrepreneurs without initial industry-specific knowledge develop market-entry capabilities in knowledge intensive industries. To do so, we study how the yesterday’s parents without prior experience in this field, become entrepreneurs in order to find a cure to the disease of their children. We find that several parameters of the cases in focus make them “extreme” and, as several organizational theorists have recently emphasized, interesting from a theory construction perspective. With this research, we contribute to the emergence of dynamic capabilities literature by investigating the micro- foundations that generate organizational level market-entry capability, To do so, we extend our understanding of the dynamic capabilities by building on social system view applied to entrepreneurship. Our contribution is threefold. First, introduce the concept of “readiness to act entrepreneurially” and thus discuss the processes and capabilities that need to be built up in order to successfully develop a capability to sense and seize opportunities in the market. Second, we contribute to the literature by systematically addressing the social processes behind the emergence of dynamic capabilities. Prior research underscores the complexity in explaining routines and capabilities and could, therefore, benefit from a systemic approach to analysis. Third, our findings could provide a practical basis for training entrepreneurs in rare disease field.