Combining institutional theory with resource based theory to understand processes of organizational knowing and dynamic capabilities

Purpose/ Research question. A promising way to understand the development of the dynamic capabilities and the knowing process is to build a bridge between the Institutional Theory and the Resource-Based Theory (RBT). Although being needed, this approach is missing in the extant literature. So we have a research question: It possible to construct a bridge between two dimensions basing on two theoretical bodies (Institutional Theory and RBT) using an “inverted binocular” to look at knowing process enacted in a process of organizational learning, for formation of competences and dynamic capabilities? Design/Method/Approach. This paper analyses two different theoretical frameworks in a theoretic way and proposes an interface between those. Findings. The exploration and explication of micro-institutional processes (organizational or individual) can be connected to the macro level (societal or field level) by combining Institutional Theory with Resource Based Theory (RBT) in a multiparadigmatic view between visions and levels (cross-level). Theoretical implications. The bridge between these two theories would enable to strengthen the comprehension of the organizational changes in the various levels of analysis, considering their mutual dependence, and the knowing process and dynamic capabilities. Originality/Value. One of the differentials of this paper is the attention given to knowledge as the main piece for the construction of the bridge between these theories. Research limitations/Future research. An interface between the RBT and Institutional theory is necessary for a further development and understanding of concepts such as dynamic capabilities.

Тип статті -теоретична. Introduction e propose that the exploration and explication of microinstitutional processes (organizational or individual) can be connected to the macro level (societal or field level) by combining Institutional Theory (Scott, 2013) with Resource Based Theory (RBT) (Barney, 2011) in a multiparadigmatic view between visions and levels (cross-level). For that, we use the metaphor of binoculars, which is an instrument with a lens for each eye, making distant objects seem nearer. However, our binocular is a little bit different. Whereas one lens makes distant objects seem nearer, the other lens makes near objects seem distant. We call it an inverted binocular. Thus, we are trying to look at the organizational practices from both structural and microprocessual lenses.
Using an inverted binocular demands a support theory that allows us to look at macro processes, and another support theory to look at micro processes. We suggest using Institutional Theory for the first and RBT for the second. Thus, in order to what we look at makes sense, we chose some relevant concepts that link these two lenses: legitimacy, institutionalization process and filtering process, resources and capabilities, reciprocal process.
Considering this aim and these theories and concepts, we focus on the study about the social and organizational knowledge as a process of knowing, as a flow of knowledge, and dynamic capabilities. It is because knowledge may be considered a potential way to understand the interface between micro and macro, agency and structure, and individual and social. Knowledge is also a phenomenon that occurs at both levels.

Research question
he research question of this paper is "Is it possible to construct a bridge between two dimensions basing on two theoretical bodies (Institutional Theory and RBT), using an inverted binocular to look at knowing process enacted in a process of organizational learning, competences and dynamic capabilities?".

Method
n order to answer the research question a theoretical analysis of two theoretical frameworks (Institutional Theory and RBT) was performed.

Results of the theoretical analysis
n this section, we present the main concepts related to RBT and Institutional Theory. Also presented are examples of theoretical propositions that evidence the compatibility of these theories.
In the 1980s strategy studies favored the analysis of the environment in which the organization was embedded, such as the classic study of the five competitive forces developed by Michael Porter. In this context Wernerfelt (1984) emphasizes the importance of organizational resources to the definition of organizational strategy and wedge the expression "Resource-Based View" (RBV).
According to Barney (1991), RBV is anchored in two assumptions: the resources of organizations are heterogeneous and these resources do not have perfect mobility. These two arguments contradict the assumptions made by economists in considering firms as owners of the same resources and the perfect competition in which all organizations can access all resources. Barney (1991) proposed that for the organization to achieve competitive advantage, the resource must have four characteristics: value; rareness; imperfect imitability; imperfect substitutability.
In 2011, Barney, Ketchen, & Wrigth (2011) point out that RBV becomes a theory, called Resource-Based Theory (RBT). This statement was made based on four factors that report the maturity of resource-based studies as a theory: the increasing use of the term RBT; use of the resource-based idea with other perspectives; RBT's relationship with other theories, such as Institutional Theory; discussions involving research on the theme.
The origins of Institutional Theory date back to the nineteenth century (Scott, 2013), yet the popularity of Institutional Theory in organizational studies is a relatively recent phenomenon of the 1980s. Institutional Theory considers that actions are guided by the intersubjective interpretation of social actors on the predominant rationality in the social context itself (Machado-da-Silva, Fonseca & Crubellate, 2005).
In an institutional perspective of analysis, it is considered that although institutional standards limit the possibility of rational action, it is these same patterns that make possible some action. The central argument to be developed is that there are rationally limited actions through institutional references (Machado-da-Silva et al., 2005). Fonseca, & Crubellate (2005) exemplify when describing that any social actor in any daily situation of problem solving needs references to act. Such references are delineated and consolidated by institutions such as the State, industry, professional associations, among others. To access such references is to interpret contemporary stimuli that come in the daily flow of practices established by social structures. Such references never come in a linear and direct way from an external source to the agent, but always through interpretation, of the meaning that he attributes to the context and social practice.
Other works propose the integration of Resource-Based Theory and Institutional Theory, as, for example, did Oliver (1997) and Crubellate, Pascuce, & Grave (2008). Oliver (1997, p. 697) proposed that "firm's sustainable advantage depends on its ability to manage the institutional context of its resource decisions". Crubellate, Pascuce, and Grave (2008) discussed the notion of strategy, through the inclusion of institutional references not only as limitations but also as enablers of actions, thus, moving towards a vision based on legitimate resources. The main consequence of this finding is that we need to understand the process of interpretation to understand how resources and context affect decisions.
The dynamic capabilities approach allows for bridging both micro and macro aspects. The construction of this bridge is based on: a) the statement of the seminal author of dynamic capabilities that "it [dynamic capabilities] is an integrative and interdisciplinary framework" (Teece 2009, p. 107); and b) the statement that "the dynamic capability view can only gain in importance if it is integrated with existing streams of research, rather than attempting to co-exist independently". (Wall et al., 2010, p. 5). From the perspective of Institutional Theory, Greendwood et al. (2008) encouraged the construction of this bridge. A recent example of such bridging is the work developed by McKague (2011), who proposes the relation between dynamic capabilities and institutional entrepreneurship. When performing their case study, the authors discovered that highly institutionalized organizations need to manage two main tensions in order to act as institutional entrepreneurs. The tensions are related to legitimacy (also highlighted in this paper) and to the process of change.
The RBT perspective points to the micro processes where the resources are modified and articulated in the process of development of competences, which results from the process of organizational learning that, in turn, implicates in the institutionalization of knowledge and conversion into routines (stable patterns of actions).
We consider that knowledge is not a simple resource but rather a complex process where the core aspects are those of knowledge creation, utilization, and institutionalization in the organizations (Patriotta, 2003). Therefore, "knowledge making has less to do with performance, control or competition and more with sense making, existence, and ontology" (Patriotta, 2003, p. 11).
Organizational learning, as a lens (Prange, 2001), allows us to approach the appropriation of knowledge by the organization. Yet, learning involves more than the creation of individual knowledge, including its utilization and institutionalization in the organization. This is the main point of the idea of 'flow of knowledge and knowing'. Knowledge, internal or external, can be absorbed (Cohen, & Levinthal, 1990), acquired, assimilated, combined with the existing knowledge in order to change cognition structures and routines and, thus, extend or create new and existing organizational competences (Zahra, & George, 2002). The organizational learning is a process of transformational change, involving the various levels (individuals, groups, and organization) through which the creation, utilization, and institutionalization of knowledge occur.
The result of organizational learning is the acquisition of a new competence: an ability to apply new knowledge to improve the performance of a present or future activity (Prahalad, & Hamel, 1990;Hamel, & Heene, 1994;Chiesa, & Barbeschi, 1997). Therefore, the assumption that competences are related to organizational learning is implied in this work.
Another key aspect for the development of competences is the concept of interpretation from which decisions and actions may result. As proposed by Institutional Theory, the process of interpretation is also influenced by reference patterns in society. Therefore, interpretation is influenced by personal, organizational, and societal factors. The Institutional Theory highlights this aspect, since the organizations are influenced by symbolic aspects, such as cultural and social elements, as much as by cognitive structures (Scott, 2013). Eggers, & Kaplan (2013) describe that cognitive structures are applied in both the environmental diagnostics and the prognosis concerning a further capacities to be developed.
New interpretations supply the flow of knowledge that can lead to the internalization of such knowledge. Knowledge can be converted into stable practices or mechanisms that involve changes and articulation of resources. The result of the organizational learning process is the development of competencies. Organizational knowing is circular. It involves internal and external dimensions (Patriotta, 2003), agency and structure aspects, individual and social dynamics, organization and society.
Likewise, change is another point of consensus because there is a clear relationship with the learning process and the development of competences, since it implies in change and articulation of resources (Prahalad, & Hamel, 1990;Mills, et al., 2002). However, the possibility to access resources (or a lack of it) depends on the pre-interpretation (cognitive and behavioral aspects) and the structure of the institutional environment (e. g. Danneels, 2010). As Thornton, & Ocasio (2008) say, institutions limit and enable, but do not determine the choices of the actors and the relation of recursive nature between institutions and actions.
The studies on knowledge, organizational learning, and development of competences under a dynamic and processual approach (Heene, & Sanchez, 1997) point towards the process of adjustment or organizational change in the face of new strategic redirections or operations throughout time (Turner, & Crawford, 1994). Response to environmental pressures or even proactivity in the technological changes requires flexibility in order to create new knowledge and its application (Heene, & Sanchez, 1997). Therefore, knowledge and practices can be institutionalized and deinstitutionalized, as the organizational behavior can vary from a passive conformity to an active resistance in response to the environmental pressures, depending on the nature and context of the very pressures (Oliver, 1992).
Scholars started to ponder on the way the organizations develop and renew their competences before the environmental changes and their own interests. In order to analyze this process, Teece, & Pisano (1994), and later Teece et al., (1997) proposed the concept of dynamic capabilities, referring to the organizational capability to renew competences to acquire congruency with the environmental changes. The term capabilities emphasizes the key role of strategic management in adapting, integrating, and reconfiguring internal and external organizational skills, resources and functional competences according to the needs of a changing environment. Thus, dynamic capabilities regard the "[...] firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments" (Teece et al., 1997, p. 516). Teece (2014) describes dynamic capabilities as an advanced multidisciplinary theoretical framework to explain the company's long-term performance.
From the development of studies on dynamic capabilities, the definitions started to become more ample as the one presented by Eisenhardt, & Martin (2000, p. 1107 in which the dynamic capability is "The firm's processes that use resourcesspecifically the processes to integrate, reconfigure, gain and release resources -to match and even create market change. Dynamic capabilities thus are the organizational and strategic routines by which firms achieve new resource configurations as markets emerge, collide, split, evolve, and die". Thus, a "dynamic capability is a learned and stable pattern of collective activities that modify an organization's operating routines" (Zollo, & Winter, 2002, p. 340). Al-Aali, & Teece (2013) emphasize that the interpretation of the environment and organizational resources are important for the study of dynamic capacities.
Institutional Theory analyzes the processes of institutionalization and deinstitutionalization of practices. The dynamic capabilities approach describes the existence of routines and patterns (Eisenhardt, & Martin, 2000) or established patterns (Zollo, & Winter, 2002) approach practices. Therefore, the use of the institutional analysis approach can improve its understanding of the change. In the last years, the Institutional Theory has faced the challenge of seeking to understand how the processes of change occur. Change has been approached, for example, through the concepts of institutional change (Dancin, Goodstein, & Scott, 2002), institutional entrepreneurship (Garud, Hardy, & Maguire, 2007), and institutional work (Lawerence, Suddaby, & Leca, 2009).One of the propositions of this paper is fill this gap in literature on the institutional understanding of the change by the integration of concepts from resource-based theory and dynamic capability view. When analyzing the microfoundations of dynamic capabilities, Teece (2009) describes that the organizational processes depend on information to be conducted and that the managers need to have skills to understand this information, as the "information must be filtered, and must flow to those capable of making sense of it" (Teece, 2009, p. 12). It is this capability of filtering process that will be used by the manager to decide which routine should be utilized/modified in each particular context. This argument is supported by the studies of Hoffman, & Ocasio (2001) that demonstrate that the events are not perceived in a similar way by several members of the industry.
Dynamic capabilities help an organization to constantly adjust its ordinary capabilities to threats and/or opportunities detected in the environment. Therefore, the institutionalization of the dynamic capabilities leads to recurring adjustments and changes. In order to look at the changes unchained by the existence of dynamic capabilities, or in order to allow a firm to integrate, construct and reconfigure competences towards environmental changes, it is necessary to have a binocular lens that makes distant objects seem nearer. RBT and its spin-off concept of dynamic capabilities, may represent this lens because it allows us to observe organizational change closer at a microprocessual level.
On the other hand, we need another lens that makes near objects seem distant. This lens may allow us to see more distantly structural and environmental aspects that impact the organizational life at a macro-processual level. From the perspective of the Institutional Theory, the bridge can be built between the theory and the concept aiming to help the studies on dynamic capabilities to understand their relation with the environment, using the other lens that distances the objects. This challenge of understanding the relation between the organization and the environment can be perceived in the notion by Teece (2009, p. 108) that "the dynamic capability perspective seeks to explore how changes in the world are likely to result in changes in business firms, and how organizations can shape their environments and improve their capabilities".
The main focus of Institutional Theory analysis is the relationship between the organizational and societal level, especially the organizational field. Among the different concepts that analyze the relation with the field, we highlight the legitimacy which is one of the fundamental concepts of the Institutional Theory. Legitimacy is related to the actions perceived as desirable and appropriate for certain systems of norms and values which are socially constructed (Deephouse, & Suchman, 2008). Kodeih, & Greenwood (2013) identified that organizations' (consolidated or projected) identity plays a relevant role in mediating multiple institutional logics present in an institutional field. Therefore, we propose that an organization that possesses legitimacy in its institutional context will have advantages when proposing technical innovations in relation to the competitors that do not have this legitimacy.
As an example, we would like highlight the products by Apple Inc. Due to the legitimacy regarding their customers, they have competence in launching innovative products, functions of which are unknown or even not accepted in the event of competitors' products, as demonstrates the company's recent releases (iPod, iPhone, and iPad had competitive products with similar functionality but were still highly appreciated by users). As the customers cannot fully understand the advantage and utility of innovative products/services, they evaluate them also based on the legitimacy that the organization acquired in the environment by launching qualitative products before. Users simply trust Apple Inc. and acquire new products not for knowing/appreciating their functionality but for being products by their trusted producer.

Conclusions
he study on organizational knowledge by fields such as competences of development, capabilities, and learning, allows exploring micro-institutional processes connecting them back to the macro level. When the concept of the organizational knowledge is integrated to the concept of organizational learning, it becomes an enabler of the development of competences. The latter allows for a better understanding of micro and macro processes of an organization. At the same time, 'institutions reside in intersubjectively shared knowledge about the word', making knowledge permeate organizations and institutions.
Reflecting on the notions presented, we understand the importance of integration of the Institutional Theory into research on dynamic capabilities and vice versa. As emphasized in the beginning, we consider that the main contribution of this paper is the work of construction of bridges between two dimensions rooted in two theoretical bodies (Institutional Theory and RBT), using an inverted binocular metaphor to look at knowing process enacted in a process of organizational learning, competences, and dynamic capabilities.
As in the study of Patriotta (2003), the forms of institutionalization of knowledge by means of routines and practices can be investigated in order to analyze the institutional dynamics or stability in a certain field and their relation with institutional logics.
Based on the concept from institutional work proposed by Lawrence et al. (2009), we ask ourselves: How do actions from the changes generated by the organizations with a high dynamic capability affect institutions? How can they cause constant innovations? Is it only about large companies which have a greater probability of having sufficient resources for a dynamic capability?
This constructed bridge generates a series of possibilities for researches that certainly posit a methodological challenge. One of the promising paths is the integration of theories. Complex situations can hardly be investigated using both theories, since these theories (Institutional theory and RBT) have limitations and different assumptions. When we integrate theories or concepts from one theory to another, we leverage the capacity of understanding and explanation of organizational phenomena, opening the 'black box' without decontextualizing it from its timespace. In-depth case studies with similar firms acting in different institutional environments (e.g. cross-cultural) are relevant in this regard and should concentrate on the micro processes with a methodological lens and at the macro processes with another conceptual lens. This approach would correspond to the idea of the inverted, multiparadigmatic binocular.
Finally, we believe that scholars from both domains can profit from the theories integration. This paper opens up an opportunity to investigate dynamic capabilities more thorough, considering organizations and their resources which are acting in an environment pressures and complex social norms. Our hope is that in looking at these possibilities we can inspire scholars interested in dynamic capabilities to add value through their researches about this concept. Future studies should further follow the call for dynamic capabilities research using integrated theories, and therefore adopt different approaches to look into this phenomenon such as Institutional Theory and RBT. Future researches could also consider this proposal to look into the effect of dynamic capabilities on high performance, investigating both internal activities and the competitive relations, or considering different dimensions of exploration and exploitation decisions. Because dynamic capabilities are a concept central to organizations and their success, a greater understanding of these capabilities can advance both strategic management theory and organizational practice.