An exploratory study of the nature of cumulative capabilities

Abstract This research sets out to test some yet unanswered questions from the literature on cumulative capabilities, as well as addressing some of the shortcomings in prior research on cumulative capabilities. Multiple regression analysis is used to test hypotheses using an existing data set of 165 plants in five countries and three industries. The findings indicate substantial differences in patterns of cumulative capabilities between countries and limited evidence of industry differences. Cumulative capabilities were found to be related to plant performance, with no difference in this relationship by industry. Support for sequential progression of cumulative capabilities was not evident, leading to the notion that development of cumulative capabilities is a complex endeavor, affected by many interrelated contingencies, not limited to sequence of development. A sequence of strategic initiative development was proposed and tested, finding support for a common foundation of practices related to cumulative capabilities, with limited support for the relationship between specific strategic initiatives and higher-level cumulative capabilities.