Innovation: Teece and Exploring the Core Components of Dynamic Capabilities

Exploring the Core Components of Dynamic Capabilities

Abstract

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.

INTRODUCTION

How firms create and sustain competitive advantage is the fundamental issue in the field of strategic management（Rumelt, Schendel, & Teece, 1994; Zott, 2003）. The

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