Dynamic Capabilities

Knowledge Center

According to Porter (1985), there are 3 viable competitive strategies to achieve a Sustainable Competitive Advantage: Cost Leadership, Differentiation and Focus.

In 1993, John Kay argued that there are  three "Distinctive Capabilities" through which a firm may achieve a sustainable competitive advantage through relationships.

Because Competitive Environments, Industries and Technologies are changing fast and significantly, another potential source of competitive advantage may be the ability of firms to develop capabilities or Competencies to strategically adapt accordingly.

Definitions Dynamic Capabilities?

In 1997, the term Dynamic Capabilities was coined by David Teece, Gary Pisano and Amy Shuen as "the firm's ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments" (D.J. Teece, G. Pisano, and A. Shuen - Dynamic Capabilities and Strategic Management, Strategic Management Journal, 24(10), 991-995).

In 2000, Kathleen Eisenhardt and Jeffrey Martin emphasize the unstructured, experiential and improvisational nature of these types of competencies in highly turbulent environments (K.M. Eisenhardt and J.A. Martin - Dynamic Capabilities: What are They? Strategic Management Journal, 21, 1105-1121).

In 2002, Maurizio Zollo and Sidney Winter suggest to redefine dynamic capability as "a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness" (M. Zollo and S.G. Winter - Deliberate Learning and the Evolution of Dynamic Capabilities, Organizationm Science 13(3), 339-351)

Examples of Dynamic Capabilities

Typical examples of dynamic capabilities include capabilities or routines for:

• Process Research and Development

• Reorganization or Restructuring

• Post Merger / Acquisition Integration

The Need for Dynamic Capabilities. Role

Dynamic capabilities can be a:

• Source of Competitive Advantage

• Source of VRIN Resources (Barney)

• Strategic way of Organizational Learning

How do Dynamic Capabilities develop? process

There is debate on the required intentionality of dynamic capabilities. Maybe they could arise simply by unconscious emergence out of external influences on the firm. Zollo and Winter distinguish 3 mechanisms (with increasing level of intentionality):

1. Experience Accumulation

2. Knowledge Articulation

3. Knowledge Codification

Forum Forum about Dynamic Capabilities. 🔥 Strategic Capabilities versus Dynamic Capabilities Hello! I am a PhD student researching strategic capabilities as a basis for building sustainable competitive advantage and achieving superior competitive performance. I would like to hear what pe... 4   4 comments Dynamic Capabilities and Product Development What dynamic capabilities are needed for new product development? Thanks..... 4   Dynamic Capabilities Cases and Examples I am looking for examples of companies that have implemented dynamic capabilities.... 3   1 comments Impact of Dynamic Capabilities How do dynamic capabilities impact organizational change on a macro level, the integration of business mergers and acquisition of products and services, and the development of business expansion? Anyo... 2   Start a new topic about Dynamic Capabilities Sign up for free

Courses about Dynamic Capabilities. Beginners Course Advanced Course Course for Experts

Expert Tips Advanced insights about Dynamic Capabilities. Here you will find professional advices by experts. Consultancy Tips Teaching Tips Practical Implementation Tips How to Become a Self-tuning Enterprise: Advanced Experimenters Organizational Agility, Strategic Agility, Real Options, Emergent Strategy In an HBR article of June 2015, Reeves, Zeng and Venjara argue there's a new way to apply algorithmic principles that en... Process Steps for Organizational Agility Organizational Agility, Enterprise Agility, Corporate Agility Organizations that strive for enterprise agility will need to go to various steps in order to achieve it. Korn ferry (20... Components of Learning Agility Organizational Agility, Organizational Learning, Knowledge Management One of the critical factors for achieving organizational agility is learning agility, which refers to the ability and ea...

Information Sources Various sources of information regarding Dynamic Capabilities. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. Definition, Differences and Relationships between Resources, Capabilities, Competencies and Core Competencies Core Competencies Javidan (1998) has made a great contribution to answering the question for the relationship / differences between resour...

Tools Useful tools regarding Dynamic Capabilities. News Videos Presentations   Books Academic More

Compare with: Resource-Based View  |  Porter  |  Organizational Agility  |  Operational Agility  |  Portfolio Agility  |  Strategic Agility  |  Agile Absorption  |  Strategic Types  |  Four Trajectories of Industry Change  |  Distinctive Capabilities  |  Acquisition Integration Approaches

Return to Management Hub: Change & Organization  |  Knowledge & Intangibles  |  Strategy & Innovation

More on Management  |  Return to Management Dictionary

This ends our Dynamic Capabilities summary and forum.