Relational capabilities and performance: examining the moderation-mediation effect of organisation structures and dynamic capability

Abstract

This study examines how organisations’ relational capabilities are associated with dynamic capability and performance in the context of emerging economies. Further, it examines how organisation structures moderate the effect of relational capabilities on dynamic capability development. The proposed framework is tested using structural equation modelling to survey data from 220 Indian firms. The findings suggest that firms with strong relationships with their customers and strategic partners will have better access to knowledge resources, which positively influences their dynamic capability and organisational performance. Further, it finds that centralised or formalised organisation structures decrease the effectiveness of firms’ relational capabilities. Lastly, the study uncovered that the association between firm performance and relational capabilities is mediated by dynamic capability. This study advances extant research by examining the underlying mechanism between relational capabilities and performance and first to test the contingent impact of different organisation structures on dynamic capability development through relational capabilities.

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