Abstract

Management research explores the relationship between distributed leadership (DL) and dynamic capabilities (DCs). This study introduces the Distributed Dynamic Capabilities (DDC) framework through a 2010-2023 Xiaomi case study, identifying three mechanisms: situated empowerment, redundant experimentation, and protocol-based coordination. These enable strategic agility (SA) in competitive ecosystems.Using triangulated data from 32 interviews, 5,000+ documents, and AI analytics, we reveal DL's paradoxical nature. While decentralization enhances innovation, it risks capability fragmentation and algorithmic rigidity. The DDC framework mitigates risks through protocol-based coordination with algorithm safeguards.Theoretically, this work shifts DC theory from executive cognition to protocol-embedded routines, while connecting DL's structural decentralization with capability modularity (termed agility's modular institutionalization). Practically, we propose the 3A Framework (Autonomy, Algorithms, Alignment) for managing digital ecosystem agility.

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