Virtual special issue: The organizational economics of organizational capability development

For many strategy scholars, the central question in the field is why some firms consistently outperform others in terms of financial performance. One of the major concepts invoked to explain these differences is differential organizational capabilities: the ability of some organizations to perform certain activities in ways that rivals cannot. However, although many agree that persistent performance differences among firms are often because of differential organizational capabilities of some kind, how these capabilities are built, and what exactly they consistent of, remains poorly understood.1 For example, although capabil­ities are often simply measured by experience, some organizations surely gain more from their experi­ences than others. The articles in this virtual special issue explore various ways in which economic rea­soning, particularly from organizational economics (agency theory, transaction cost economics, property rights theories, contract theory, evolutionary eco­nomics, etc.) can help to shed light on the nature, development, and implications of differential orga­nizational capabilities.