Dynamic Capabilities

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Description of Dynamic Capabilities (Teece, Pisano and Shuen, 1997). Explanation.


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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. Description.

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:

The Need for Dynamic Capabilities. Role

Dynamic capabilities can be a:

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

Dynamic Capabilities Forum
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Dynamic Capabilities Special Interest Group

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Best Practices - Dynamic Capabilities Premium

Expert Tips - Dynamic Capabilities Premium

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In an HBR article of June 2015, Reeves, Zeng and Venjara argue there's a new way to apply algorithmic principles that enables organizations to constan...
Usage (application): Organizational Agility, Strategic Agility, Real Options, Emergent Strategy

Process Steps for Organizational Agility

Organizations that strive for enterprise agility will need to go to various steps in order to achieve it. Korn ferry (2014) define the process of a...
Usage (application): Organizational Agility, Enterprise Agility, Corporate Agility

Components of Learning Agility

One of the critical factors for achieving organizational agility is learning agility, which refers to the ability and eagerness to learn from experien...
Usage (application): Organizational Agility, Organizational Learning, Knowledge Management

Resources - Dynamic Capabilities Premium

Definition, Differences and Relationships between Resources, Capabilities, Competencies and Core Competencies

Javidan (1998) has made a great contribution to answering the question for the relationship / differences between resources, capabilities, competencie...
Usage (application): Core Competencies


Dynamic Capabilities


Dynamic Capabilities


Dynamic Capabilities


Dynamic Capabilities

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

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