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6.3 Conclusion
Whereas researchers and practitioners have substantially investigated methods to guide
the balance between process improvement and innovation capabilities in a monopoly setting,
competition greatly influences firm-level capability development trade-offs. We suggest that
researchers and decision makers use a dynamic framework to further explore such effects
and the disruptive nature of process innovation. The dynamic modeling used in our study
shows a promising future for advancing management, organization, and psychology studies
(Davis et al., 2007; Harrison et al., 2007; Vancouver et al., 2010) due to the modelʼs ability
to depicting nonlinear relationships and dynamic competition (Sterman et al., 2007;
Rahmandad, 2012). This approach is based on differential equations and has been widely
used in the study of biology, ecology, evolutionary economics, and strategy. According to
Bendoly et al. (2010), Schroeder (2008), and Größler et al. (2008), dynamic modeling is
useful for investigating specific operational problems since the operations management field
is characterized by feedback, resource accumulation, and delay. Dynamic modeling therefore
enables us to further explore the complicated and unforeseen interactions within this
complex adaptive system (Choi et al., 2001; Repenning, 2003; Keyhani et al., 2015).
We offer a dynamic, competition lens to better understand improvement-innovation
capability trade-offs in process development and management. This perspective fills the void
in the operations management literature that overlooks rivals’ retaliation, which has blocked
the examination of the interaction between inner capability trade-offs and outer competition.
Specifically, we show that one firm, in pursuit of process superiority, can take the long-term-
growth capability development path. Yet it can be led astray by imitating leading firms that
intentionally make their superior processes easy to imitate. This study adds a unique message
to market leaders about the potential benefits of easy-to-imitate capabilities: In publicizing
the best practice to follower firms, leading firms experience less threat of radical process
innovation from them.