Aiming at innovation: a case study of innovation capabilities in the Swedish defence industry

Many firms are struggling with altering and developing their organisational capabilities. The purpose of this paper is to contribute to organisational capability theory by providing insights from an empirical setting of the successive process of developing capabilities to respond to sudden and disruptive changes to the market context. This paper is based on an exploratory interview study of a Swedish defence supply organisation. We argue that to develop capabilities, firms need to question the logic behind how to generate new knowledge. The organisation, we studied, did not question the overall assumptions in its development organisation, nor did it revisit the underlying norms and values of its product development organisation. The initiatives it launched in response to change and to develop their capabilities were ambitious, but insufficient; they did not address the critical issue of knowledge generation. Changes in the context pinpoint the strategic change aspect of the development of innovating capabilities.