Volume 20, Number 1 Article by Adwaita Govind Menon March, 2008
Revisiting Dynamic Capability :
Dynamic capability emerged as a complement to the Resource Based View (RBV), in an attempt to explain competitive advantage in a rapidly changing environment. Issues pertaining to its conceptualisation have been debated at length but the literature is ambivalent on these aspects. This paper revisits the concept and looks at the different threads which have contributed to dynamic capabilities. It discusses the origin of dynamic capability, the ambiguities surrounding its definition and its attributes. The ambiguity is traced to the lack of both a clear description of resources and capabilities, and a proper distinction between capabilities and dynamic capabilities in the literature. This award winning essay compares varying definitions of dynamic capability to enable an appreciation of the disparate ideas in the dynamic capabilities literature.
Dynamic capabilities have often been referred to as second order organisational capabilities. Several authors have attempted to categorise dynamic capabilities in a hierarchy. The paper coalesces their thoughts and compares the logic behind such categorisation. Further, the paper studies the literature on the impact of market velocity on dynamic capabilities. The examination of different streams of thought on dynamic capabilities enables a better understanding of the concept. A synthesis of the literature yields three core processes for dynamic capabilities: ‘learning’, ‘reconfiguration’, and ‘coordination and integration’. This paper conceptualises these as concurrently running processes with a cyclical relationship within dynamic capabilities. An attempt is also made to provide directions for further empirical work in the field by identifying the need to work towards measurable constructs for dynamic capabilities. The paper concludes by identifying the less explored areas in the concept, and proposes that dynamic capabilities, while providing competitive advantage, hold out a greater potential for transcending the barriers of competition and creating a domain for themselves which is devoid of competition.
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