"Strategy Formation, Dynamic Capabilities and Firm Performance"

We extend the canonical distinction between deliberate and emergent strategies to advance theory regarding dynamic capabilities. Specifically, we connect the dynamic capabilities literature and the strategy-as-practice perspective and articulate how the process through which a firm’s strategy is formed acts as an antecedent to the emergence of dynamic capabilities, which in turn influences firm performance. To accomplish this, our study examines new product introductions in the video game industry between 1996 and 2013. We find support for our model that an emergent strategy formation process increases the probability that a firm will develop dynamic capabilities, and the emergence of these capabilities mediates the relationship between a firm’s strategy formation process and the rate of new product introductions.