The Role of Purposiveness in a Strategic Theory of Organizational Capabilities

Organizational capabilities appear in both the capability-based view and in the resource-based view. Both theories are, to a varying degree, based on notions such as bounded rationality and tacit knowledge, while paying less attention to the aspects of intentionality and purposiveness that are associated with the notion of being capable of something. Based on a case-study of pricing capability in the European packaging industry, I outline some of the central challenges to be addressed by a strategic theory of organizational capabilities and argue that a greater emphasis on purposive behavior in the study of organizational capabilities provides the foundations for directly addressing cross-sectional issues related to the differential performance of firms by highlighting the actual content of the capabilities that typical business firms rely on.