Dynamic Capabilities: Micro-foundations of strategy, dynamic capabilities, knowledge, and ambidexterity

Topic 2: Dynamic Capabilities

Competitiveness Based On Dynamic Capabilities Paradigm: Consolidating Entrepreneurship, Change Management, Innovation, and Organisational Learning Knowledge

Permanent search for the explanation of the competitive advantage makes scholars to constantly rethink paradigm theories, views as well as theoretical perspectives. Resource-based view is no longer sufficiently explaining competitive advantage of the firms in the innovation economy. Thus, new perspective should be developed. Prahalad (1990), Minzberg et al. (2003) and others offered dynamic capabilities as the new perspective that should explain processes that take place in the firm in order to match the dynamic, volatile environment. Many scholars (Teece, Helfat, Eisenhardt, Winter etc.) made efforts to operationalize dynamic capabilities however the main challenge was to eliminate the overlap between dynamic capabilities and akin concepts - corporate entrepreneurship, entrepreneurship, innovations, learning and knowledge management as well as change management. 

The emergence of the dynamic capabilities concept and related theory has been hindered by the lack of an adequate explanation for how and why some firms develop competitive advantage in rapidly changing environments (Eisenhardt and Martin, 2000) while others do not. However, scholars elaborating on Teece’s position identified dynamic capabilities as a distinct function and attempted to construct a framework of indicators to measure the phenomenon and its impact on a variety of variables, such as corporate entrepreneurship, innovations, knowledge management, and change management. As the literature analysis reveals, a clear overlap with the established theories of corporate entrepreneurship, innovations, etc., is in evidence. Of course, difficulties also arose attempting to empirically measure the phenomenon and its relationship with other variables. As Arend and Bromiley (2009) state, a dynamic capabilities perspective offers an incomplete theory, oversimplifying a complex phenomenon and not clearly defining its domain of relevance. 

Thus the proposed topic aims to stimulate the discourse how dynamic capabilities consolidates entrepreneurship, change management, innovation management and organisational learning knowledge and in that way contributes to the competitiveness development. The discourse opens new page in dynamic capability research eliminating tautology and providing new insight into the dynamic capabilities empirical research methodology. The topic is composed of several subtopics: shift of the concept of the competitiveness in innovation economy; dynamic capabilities as a paradigm theory; entrepreneurship, innovation, change management, organisational learning and dynamic capabilities; ways to measure the effects of the dynamic capability; any other sub-topic contributing to the development the main topic. 

  • Adner R, Helfat, CE. 2003. Corporate effects and dynamic managerial capabilities. Strategic Management Journal 24(10): 1011-1025.
  • Arend, A.R., Bromiley, P. (2009). Assessing the dynamic capabilities view: spare change, everyone? Strategic Organization, 7(1): 75-90. 
  • Eisenhardt, KM, Furr NR, Bingham, CB. 2010. Microfoundations of performance: Balancing efficiency and flexibility in dynamic environments. Organization Science 21(6): 1263-1273.
  • Eisenhardt. KM, Martin, JA 2000. Dynamic capabilities: what are they? Strategic Management Journal 21(10-11): 1105-1121.
  • Helfat, CE, Winter, SG. 2011. Untangling dynamic and operational capabilities: Strategy for the (n)ever-changing world. Strategic Management Journal 32(11): 1243-1250. 
  • Mintzberg, H, Lampel J, Quinn JB, Ghoshal, S. 2003. The Strategy Process: Concepts, Contexts, Cases. Prentice Hall/Pearson Education, Inc., Upper Saddle River, NJ. Fourth Edition.
  • Prahalad, CK, Hamel, G. 1990. The core competence of the corporation. Harvard Business Review 68(3): 79-91.
  • Teece, DJ, Pisano, G, Shuen, A. 1997. Dynamic capabilities and strategic management. Strategic Management Journal 18(7): 509-533.
  • Teece, DJ. 2007. Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal 28(13): 1319-1350.
  • Teece, DJ. 2012. Dynamic capabilities: Routines versus entrepreneurial action. Journal of Management Studies  49(8): 1395-1401.
  • Zahra, SA, Sapienza, HJ, Davidsson, P. 2006. Entrepreneurship and dynamic capabilities: a review, model and research agenda. Journal of Management Studies 43(4): 917-955.

Contact details:

Asta Pundzienė
Kaunas University of Technology, Lithuania