The concept of dynamic capabilities was introduced by Teece & Pisano (1994) and Teece, Pisano, & Shuen (1997)who asserted that in a dynamic environment a firm’s competitive advantage will rest on the firm’s internal processes and routines that enable the firm to renew and change its stock of organizational capabilities thereby making it possible to deliver a constant stream of new and innovative products and services to customers. Capabilities are complex bundles of skills and knowledge that are exercised through organizational processes. Capabilities thus describe the effectiveness in undertaking processes relative to the competition (Nelson & Winter, 1982), and the literature has also shown a close link between capabilities and their underlying processes (Sambamurthy, Bharadwaj, & Grover, 2003; Tecce, 2007; Wnag & Amhed, 2007).
A fundamental issue for researchers and managers is to understand and leverage dynamic capabilities – the ability to reconfigure operational competencies to address turbulent environments. However, previous porter has viewed dynamic capabilities have been viewed as abstract phenomena with no set prossesses therefore hard, virtually impossible to the competitor to replicate. To enable managers to leverage dynamic capabilities, this research proposes a set of core components to capture the effectiveness in undertaking the key processes of dynamic capabilities, in terms of effectively undertaking the reconfiguration process. Which are sensing capability, absorptive capability, integrative capability and innovative capability. Finally, some implications for managers are also discussed.
Keywords: dynamic capabilities, core components of dynamic capabilities, firm performance.
How firms create and sustain competitive advantage is the fundamental issue in the field of strategic management（Rumelt, Schendel, & Teece, 1994; Zott, 2003）. The
References: Amit, R., & Schoemaker, P. J. (1993). Strategic assets and organizational rent. Strategic Management Journal, 14 (1), 33-46. Bain, J. S. (1959). Industrial Organization. Wiley, New York. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120. Barney, J. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27, 643-650. Bierly, P. E. & Chakrabarti, A. K.. (1996). Technological learning, strategic flexibility, and new product development in the pharmaceutical industry. IEEE Transactions on Engineering Management, 43: 368-380. Blyler M. & Coff, R. W. (2003). Dynamic capabilities, social capital, and rent appropriation: ties that split pies. Strategic Management Journal, 24: 677-686. Chang, H. R. & Hou, J. J. (2007). Organizational change and dynamic capabilities; A case of high-tech company. Industrial Forum, 9 (1), 15-29. Cohen, M. A., & Levinthal, D. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35 (1), 128-152. Deeds, D. L., DeCarolis, D., & Coombs, J. (1999). Dynamic capabilities and new product development in high technology ventures: An empirical analysis of new biotechnology firms. Journal of Business Venturing, 15, 211-229. Delmas, M. A. (1999). Exposing strategic assets to create new competencies: The case of technological acquisition in the waste management industry in Europe and North America. Industrial and Corporate Change, 8, 635-650. Dosi, G., Nelson, R., & Winter, S. (2000). Introduction: The nature and dynamics of organizational capabilities. in. Dosi, G., Nelson, R., & Winter, S. (Eds.) (2000). The Nature and Dynamics of Organizational Capabilities. Oxford University Press, Oxford. Dutta S., Narasimhan, O. & Rajiv, S. (2003). Conceptualization and measuring capability: methodology and empirical application. Strategic Management Journal, 24: 667-686. Eisenhardt, K. M. & Martin, J. A. (2000). Dynamic capabilities: what are they? Strategic Management Journal, 21: 1105-1121. Ethiraj S. K., Kale, P., Krishnan, M. S., & Singh, J. V.. (2005). Where do capabilities come from and how do they matter? a study in the software service industry. Strategic Management Journal, 26: 25-45. Galunic, D. C., & Rodan, S. (1998). Resource recombination in the firm: Knowledge structures and the potential for Schumpeterian innovation. Strategic Management Journal, 19, 1193-1201. George, G. (2005). Learning to be capable: patenting and licensing at the Wisconsin Alumni Research Foundation 1925–2002. Industrial and Corporate Change, 14, 119-151. Grant, R. M. (1996). Prospering in dynamically-competitive environments: Organizational capability as knowledge integration. Organization Science, 7 (4), 375-388. Griffith, D. A., & Harvey, M. G. (2001). A resource perspective of global dynamic capabilities. Journal of International Business Studies, 32 (3), 597-606. Helfat, C. E. (1997). Know-how and asset complementarily and dynamic capability accumulation: The case of R&D. Strategic Management Journal, 18 (5), 339-360. Ho, Y. C., & Tsai, T. H. (2006). The impact of dynamic capabilities with market orientation and resource-based approaches on NPD project performance. Journal of American Academy of Business, 8 (1), 215-228. Iansiti, M. and K. B. Clark. (1994). Integration and dynamics capability: evidence from product development in automobiles and mainframe computers. Industrial and Corporate Change, 3: 557-605. King, A. A., & Tucci, C. L. (2002). Incumbent entry into new market niches: The role of experience and managerial choice in the creation of dynamic capabilities. Management Science, 48 (2), 171-186. Kogut, B., & Zander, U. (1996). What firms do? Coordination, identity, and learning. Organization Science, 7 (5), 502-518. Lazonick, W., & Prencipe, A. (2005). Dynamic capabilities and sustained innovation: Strategic control and financial commitment at Rolls-Royce Plc. Industrial and Corporate Change, 14, 501-542. Leonard-Barton D. (1992). Core capabilities and core rigidities: a paradox in managing new product development. Strategic Management Journal. 13: 111-125. Luo, Y. (2000). Dynamic capabilities in international expansion, Journal of World Business, 35 (4), 355-378. Mahoney, J. & Pandian, J. (1992). The Resource-based View within The Conversation of Strategic Management. Strategic Management Journal, 13, pp. 363-380. Mason, E. (1949). The current state of the monopoly problem in the U.S., Harvard Law Review, 62, pp. 1265–1285. Menguc, B. & Auh, S. (2006). Creating a firm-level dynamic capability through capitalizing on market orientation and innovativeness. Journal of the Academy of Marketing Science, 34 (1), 63-73. Nelson, R., & Winter, S. G. (1982). Evolutionary Theory of Economic Change. Belknap Press of Harvard University Press, Cambridge, MA. Newbert, S. L. (2005). New firm formation: a dynamic capability perspective. Journal of Small Business Management, 43 (1), 55-77. Okhuysen, G. A., & Eisenhardt, K. M. (2002). Integrating knowledge in groups: How formal interventions enable flexibility. Organization Science, 13 (4), 370-386. Pan, S., Pan, G. M. & Hsieh, H. (2006). A dual-level analysis of the capability development process: a case study of TT&T. Journal of the American Society for Information Science and Technology, 57(13): 1814-1829. Pavlou, H. (2004). IT-enabled dynamic capabilities in the new product development: Building a competitive advantage in the turbulent environments. doctoral dissertation, University of Southern California. Penrose, E. (1959). The Theory of the Growth of th Firm. Basil Blackwell, London. Petroni, A. (1998). The analysis of dynamic capabilities in a competence-oriented organization. Technovation, 18(3): 179-189 Pettus, M Porter, M. E. (1980). Competitive Strategy: Techniques for analyzing Industries and Competitors. Free Press: New York. Prahalad, C. K. & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), pp. 79–91. Priem, R. L., & Butler, J. E. (2001). Is the resource-based ‘view’ a useful perspective for strategic management research? Academy of Management Review, 26 (1), 22-40. Roy, P., & Roy, P. (2004). The Hewlett Packard–Compaq computers merger: Insight from the resource-based view and the dynamic capabilities perspective. Journal of American Academy of Business, 5 (1/ 2), 7-14. Rumelt, R., Schendel, D.,& Teece, D. (1994). Strategic management and economics, Strategic Management Journal, 12, 5-29. Salvatos, C. (2003). The role of micro-strategies in the engineering of firm evolution. Journal of Management Studies, 40 (1), 83-108. Sambamurthy, V., Bharadwaj, A. S., & Grover V. (2003). Shaping agility through digital options: Reconceptualizing the role of IT in contemporary firms. MIS Quarterly, 27 (2), 237-263. Sanchez, R. (2004). Understanding competence-based management: Identifying and managing five modes of competence. Journal of Business Research, 57(5): 518-532. Schumpeter, J. A. (1942). Capitalism, Socialism, and Democracy. Harper, New York. Shapiro, C. (1989). The theory of business strategy. RAND Journal of Economics, 20(1), 125–137. Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28, 1319-1350. Teece, D. J., & Pisano, G. (1994). The dynamic capabilities of firms: an introduction. Industrial and Corporate Change, 3 (3), 537-556. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal,18 (7), 509-533. Tripsas, M. (1997). Surviving radical technological change through dynamic capability: Evidence from the typesetter industry. Industrial and Corporate Change, 6 (2), 341-377. Verona, G., & Ravasi, D. (2003). Unbundling dynamic capabilities: an exploratory study of continuous product innovation. Industrial and Corporate Change, 12, 577-606. Wang, C. L., & Ahmed, P. K. (2004). The development and validation of the organisational innovativeness construct using confirmatory factor analysis. European Journal of Innovation Management, 7 (4), 303-313. Wang, C. L., & Ahmed, P. K. (2007). Dynamic capabilities: A review and research agenda. International Journal of Management Reviews, 9 (1), 31-51. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic management journal, 5 (2), 171-180. Wheeler, B. C. (2002). NEBIC: A dynamic capabilities theory for assessing net-enablement. Information Systems Research, 13 (2), 125-146. Winter, S. (2003). Understanding Dynamic Capabilities. Strategic Management Journal, 24:10, 991-995. Woiceshyn, J., & Daellenbach, U. (2005). Integrative capability and technology adoption: evidence from oil firms. Industrial and Corporate Change, 14 (2), 307-342. Zollo, M. & Winter, S. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13: 339-351. Zott, C. (2003). Dynamic capabilities and the emergence of industry differential firm performance: Insights from a simulation study. Strategic Management Journal, 24 (2), 97-125.