Abstract. This qualitative study examines the dominant logic’s influence on the development paths of microfoundations of dynamic capabilities of a Finnish healthcare company that has acquired dozens of smaller service providers in the same sector during the past five years. Moreover, the aim is to find out what kind of contradictions caused by distinctive dominant logics emerged in M&A processes, and how these contradictions were managed by the acquirer. In order to gain a comprehensive understanding of the often implicit phenomena that take place in the case organizations, qualitative data was gathered through interviews with the executives of the acquiring company and previous owner-managers of the acquired entities.
The theoretical part of the study introduces the theories of dominant logic and dynamic capabilities framework. In order to comprehend the dominant logic’s influence on the development paths of firm-specific microfoundations, and further dynamic capabilities, a conceptual model of the theories is build and presented.
The findings of this study implicate, that the dominant logic of a firm may explain the development of organizational capabilities, and therefore, it can contribute to the formation of a unique, firm-specific set of dynamic capabilities. The findings show that the level of innovativeness and orientation towards change corresponds with how weak versus strong the prevailing dominant logic in the organization is. The weaker the prevailing dominant logic of a firm, the higher the absorptive capacity of that specific firm, and followingly, the stronger the contained dynamic capabilities. On the other hand, the stronger the dominant logic, the lower the level of absorptive capability in the organization, and therefore, the more challenging it is for the organization to reconfigure its current assets.
Due to different dominant logics and capabilities that these distinct mental schemas highlighted, contradictions between the parties emerged in the perception of relevant organizational processes. Contradictions were managed through pre- and post-acquisition interviews. Another means to handle the emerged contradictions was to operate under more than one dominant logics
