Presentation prepared for the 21st Conference of the International Academy for Management and Business, held in Montreal, QC, on May 19, 2016.

1. Exploring the strategic impact
of online communities:
A dynamic capabilities perspective
Dr. David Wagner (@dw_p)
Presentation prepared for the
21st Conference of the
International Academy for
Management and Business
Montreal, QC
May 19, 2016

2. 2
Outline
1. Motivation
2. Theoretical Foundation
3. Research Design
4. Results
5. Discussion
6. Contributions

3. 3
1. Motivation
• Focus of work: Strategic use of online communities
• Online communities are highly important in practice settings (Chui et al.,
2012; McAfee, 2009; Kane et al., 2009; Treem & Leonardi, 2012)
• Some contributions to the organizational and information systems
literature (Aral et al., 2013; Faraj et al., 2011; Kane et al., 2013; Kraut et al., 2011)
• Strategic implications largely neglected to date (Bharadwaj et al., 2013;
Haefliger et al., 2011; Gulati et al., 2012; von Krogh, 2012)
• Call to integrate online communities into dynamic capabilities
research (Majchrzak, 2009)
• Research question: How may online communities be used by
organizations to adapt to a changing business environment?

4. 4
2. Theoretical Foundations
Online Communities (OCs):
• OCs are large collectivities “of voluntary members whose primary
goal is member and collective welfare, whose members share a
common interest, experience, or conviction and positive regard for
other members, and who interact with one another and contribute to
the collectivity primarily over the Net” (Sproull and Arriaga, 2007: 898).
Dynamic Capabilities (DCs):
• DCs are defined as a firm’s ability to continuously adapt its resource
base to a volatile business environment in order to achieve and
maintain a competitive advantage (Teece et al., 1997).
• DCs can be “disaggregated into the capacity (1) to sense and shape
opportunities and threats, (2) to seize opportunities, and (3) to
maintain competitiveness through enhancing, combining, protecting,
and, when necessary, reconfiguring the business enterprise’s
intangible and tangible assets” (Teece, 2007: 1319).

5. 5
3. Research Design
Explorative, multiple case study Yin (2009)
• Prominent method among strategy scholars (Eisenhardt, 1989; Gibbert et
al., 2008; Langley & Abdallah, 2011)
• Much potential to advance knowledge on DCs (Teece, 2012)
• Particularly suitable to theorize OCs (Urquhart & Vaast, 2012)
• Multiple cases provide us with a richer understanding and allow us
to compare OCs along key constructs.
Field access: German Association for Community Management
• Sampling strategy: Theory-based/criterion (Miles and Huberman, 1994)
• Main source of evidence: Interviews with Social Media/Community
Managers
• Additional sources: Community data, on-site oberservations, prior
studies, industry reports, press clippings, corporate documents

6. 6
3. Results: Case Descriptions
Customer
Community
Innovation
Community
News
Community
Industry E-commerce Automotive Publishing
Purpose
Generation of
product reviews
Increase
of ideas
Generation of
local news
Capability Sensing Seizing Reconfiguration

7. 7
4. Results: Interview Quotes
Capability
Sample quotes*
(Interviews were conducted in German; the below citations have been translated)
Sensing
“We recently switched shipping services from [Company A] to [Company
B]. We now also offer deliveries via [Company C]. It was my task to
oversee how people would react to these changes, whether there are any
complaints. If so, I would need to speak to the board of directors to let
them know what isn’t working. […] This is the reason why I’m invited to
such meetings. I realize very quickly when things go wrong.” (Case 1)
Seizing
“The idea about [Product A] was initially posted to the community. It was
taken up by the right people, who were also able to develop the idea
further. The project was pitched in the right types of committees, later it
received the necessary funding. Ultimately, [Product A] was developed and
prototyped in cooperation with the same people who initially suggested it.”
(Case 2)
Reconfiguration
“When we introduced the community, our editors were thrown in at the
deep end. They were used to producing offline editorial content for the
freesheets about once or twice a week. However, none of them had an
affinity for producing content online, nor did they want to do it.” (Case 3)

8. 8
5. Discussion
• OCs are organizational resources that can be used to implement
value-creating strategies (Barney, 1991; Wernerfelt, 1984); commmunity-
building is a key process for value capture (Kane et al., 2009; Kraut &
Resnick, 2011).
• OCs are central to strategy because of their potential to facilitate
organizational adaptation to a changing business environment.
• We define a community capability as a firm’s ability to create value
through the business use of OCs; a community capability is a type of
dynamic capability that is tied to OC contexts.
• Caution: OCs do not necessarily take a strategic role, there may be
a strategic misfit (Neumann et al., 1992), rival explanation: institutional
isomorphism (DiMaggio & Powell, 1983)

9. 9
6. Contributions
Contributions to Theory:
• Providing empirical insights into the strategic use of digital
technologies by organizations (Bharadwaj et al., 2013; Pan et al, 2015).
• Integrating OCs into the DC framework by showing how online
communities are mobilized to sense opportunities and threats, to
seize opportunities, and to reconfigure the enterprise’s intangible
and tangible assets, thus helping their host organizations to cope
with changing business environments (Teece, 2007; Majchrzak, 2009)
• Developing the notion of a community capability (Corley & Gioia,
2011; Puranam, et al, 2014).
Contributions to Practice:
• The results are relevant for practicing social media and
community managers, helping them to understand the strategic
role their communities (may) play and illustrating ways to
employ them accordingly.

10. 10
Contact Details
Dr. David Wagner
Post Doc/Assistant Professor
Digital Strategy & Innovation
+49 (0)7131 6456 36-85
david.wagner@ggs.de
www.kpsquared.org

11. 11
Key References
Bharadwaj A, El Sawy OA, Pavlou PA, Venkatraman N. 2013. Digital Business Strategy: Toward
a Next Generation of Insights. MIS Quarterly 37(2): 471–482.
Faraj S, Jarvenpaa SL, Majchrzak A. 2011. Knowledge Collaboration in Online Communities.
Organization Science 22(5): 1224–1239.
Gulati R, Puranam P, Tushman M. 2012. Meta-Organization Design: Rethinking Design in
Interorganizational and Community Contexts. Strategic Management Journal 33(6): 571–
586.
Kraut RE, Resnick P. 2011. Building Successful Online Communities: Evidence-Based Social
Design. MIT Press: Cambridge, MA.
Haefliger S, Monteiro E, Foray D, von Krogh G. 2011. Social Software and Strategy. Long Range
Planning 44(5–6): 297–316.
Majchrzak A. 2009. Comment: Where is the Theory in Wikis? MIS Quarterly 33(1): 18–20.
Pan, G., Pan, S.-L., & Lim, C.-Y. (2015). Examining how firms leverage IT to achieve firm
productivity: RBV and dynamic capabilities perspectives. Information & Management, 52(4),
401–412.
Puranam P, Alexy O, Reitzig M. 2014. What’s ‘New’ About New Forms of Organizing? Academy
of Management Review 39(2): 162–180.
Sproull L, Arriaga M. 2007. Online Communities. In Handbook of Computer Networks, Bidgoli H
(ed). John Wiley & Sons, Inc.: 898–914.
Teece DJ. 2007. Explicating Dynamic Capabilities: The Nature and Microfoundations of
(Sustainable) Enterprise Performance. Strategic Management Journal 28(13): 1319–1350.
Yin RK. 2009. Case Study Research: Design and Methods. Sage: Thousand Oaks, CA.