Dynamic capabilities
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Understanding Dynamic Capabilities: A Comprehensive Synthesis
Introduction to Dynamic Capabilities
Dynamic capabilities (DCs) refer to the organizational and strategic routines by which firms achieve new resource configurations, enabling them to adapt to changing environments. This concept has garnered significant attention in strategic management, yet it remains complex and often criticized for its vagueness and lack of practical value .
Conceptual Framework and Definitions
Defining Dynamic Capabilities
Dynamic capabilities are identifiable and specific routines that serve various purposes, such as integrating, reconfiguring, and guiding the gain and release of resources within firms. These capabilities are essential for firms to adapt to moderately dynamic and high-velocity markets, where the sustainability of DCs is influenced by market dynamism and causal ambiguity.
Multi-Dimensional Framework
A structured and integrated theory of DCs has been developed using morphological analysis (MA), which identifies five dimensions and 26 variants, providing a comprehensive representation of the conceptual foundations of DCs. This framework helps in understanding the assumptions, antecedents, key characteristics, input factors, impacting factors, desired outcomes, and assessment yardsticks of DCs.
Processes, Antecedents, and Outcomes
Processes of Dynamic Capabilities
The processes of dynamic capabilities range from very specific and identifiable routines to generic knowledge-related processes. These processes are shaped by experience accumulation, knowledge articulation, and knowledge codification, which co-evolve to develop and adapt operating routines.
Antecedents of Dynamic Capabilities
Antecedents of DCs can be internal or external to the firm. Internal factors include resources, knowledge, and learning, while external factors encompass alliances and environmental dynamism . Entrepreneurial orientation, however, does not have a direct relationship with DCs.
Outcomes and Performance
The relationship between dynamic capabilities and firm performance is complex and often mediated by intermediate outcomes. DCs primarily cause change and intermediate outcomes rather than directly impacting performance. The effectiveness of DCs is also moderated by economic and cultural contexts, with Eastern orientations showing stronger effects on performance than Western orientations.
Taxonomy and Practical Implications
Taxonomy of Dynamic Capabilities
A comprehensive taxonomy categorizes dynamic capabilities into three levels: sensing, seizing, and transforming (Level DC-1); 19 dynamic sub-capabilities (Level DC-2); and 240 idiosyncratic dynamic capabilities (Level DC-3). This taxonomy bridges the gap between rigorous conceptual literature and relevant empirical research, providing a tangible picture of DCs in practice.
Practical Applications
The MA framework and taxonomy help managers understand and assess the dynamic capability endowment of their firms, enabling them to develop, manage, and retain these capabilities effectively . This holistic view aids in strategic decision-making and enhances the firm's ability to adapt to changing environments.
Conclusion
Dynamic capabilities are crucial for firms to navigate and thrive in dynamic markets. Despite criticisms, recent research has provided a more structured and integrated understanding of DCs, highlighting their processes, antecedents, and outcomes. The development of comprehensive frameworks and taxonomies offers valuable insights for both scholars and practitioners, paving the way for future research and practical applications in strategic management.
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