The Microfoundations of Dynamic Capabilities in Nigerian SMEs: Agency, Learning, and Strategic Change

This dissertation investigates the microfoundations of dynamic capabilities in Nigerian small and medium enterprises, with particular attention to how individual-level agency, organizational learning processes, and strategic change episodes are interconnected. Dynamic capabilities theory has been criticized for insufficient attention to micro-level processes that generate and sustain capabilities, and this gap is particularly pronounced in SME and emerging market contexts. Microfoundations of dynamic capabilities theory, organizational learning theory, and strategic change literature provide the theoretical anchors. The research employs a longitudinal qualitative design using ethnographic and process research methods across eight Nigerian SMEs in Lagos and Kano over a twenty-four-month observation period. Data were collected through participant observation, serial interviews with owners and managers, and organizational process documentation. Process theory analytical methods including event sequencing and narrative analysis were applied. Findings reveal that dynamic capabilities in Nigerian SMEs are generated through iterative cycles of owner-manager sensing, resource reconfiguration experiments, and collective sensemaking processes that do not follow the linear capability development pathways assumed in large-firm theory. The study identifies bricolage agency as the dominant microfoundational mechanism through which Nigerian SME owners construct capabilities from available resources under uncertainty. The dissertation makes original contributions to dynamic capabilities microfoundations theory by providing SME-contextual and Africa-grounded conceptual extensions. Keywords: dynamic capabilities, microfoundations, Nigerian SMEs, organizational learning, strategic change.