- Dynamic capabilities
Dynamic capability is defined as “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments”. The basic assumption of the dynamic capabilities framework is that core competencies should be used to create short term competitive positions that can be used to build longer-term competitive advantage.
Three dynamic capabilities are necessary in order to meet new challenges. Organizations and their employees need the capability to learn quickly and to build strategic assets. New strategic assets such as capability, technology and customer feedback have to be integrated within the company. Existing strategic assets have to be transformed or reconfigured.
Learning requires common codes of communication and coordinated search procedures. The organizational knowledge generated resides in new patterns of activity, in “routines”, or a new logic of organization. Routines are patterns of interactions that represent successful solutions to particular problems. These patterns of interaction are resident in group behavior and certain sub-routines may be resident in individual behavior. Collaborations and partnerships can be a source for new organizational learning which helps firms to recognize dysfunctional routines and prevent strategic blind spots. Similar to learning, building strategic assets is another dynamic capability. For example alliance and acquisition routines can enable firms to bring new strategic assets into the firm from external sources.
The effective and efficient internal coordination or integration of strategic assets may also determine a firm’s performance. According to Garvin (1988) quality performance is driven by special organisational routines for gathering and processing information, for linking customer experiences with engineering design choices and for coordinating factories and component suppliers. Increasingly competitive advantage also requires the integration of external activities and technologies: for example in the form of alliances and the virtual corporation. Zahra and Nielsen (2002) show that internal and external human resources and technological resources are related to technology commercialization.
Transformation of existing assets
Fast changing markets require the ability to reconfigure the firm’s asset structure and to accomplish the necessary internal and external transformation (Amit and Schoemaker, 1993). Change is costly and so firms must develop processes to find low pay-off changes. The capability to change depends on the ability to scan the environment, to evaluate markets and to quickly accomplish reconfiguration and transformation ahead of the competition. This can be supported by decentralization, local autonomy and strategic alliances.
- ^ a b Teece, D., G. Pisano and A. Shuen, 1997, "Dynamic Capabilities and Strategic Management.", Strategic Management Journal, (18:7),pp.509-533
- ^ Eisenhardt, K. and J. Martin, 2000, "Dynamic capabilities:What are they?", Strategic Management Journal, (21),pp.1105-1122.
Zahra, S.A., Nielsen, A.P.(2002) Sources of capabilities, integration and technology commercialization. Strategic Management Journal, 23; 5; pp. 377–398.
Wikimedia Foundation. 2010.
Look at other dictionaries:
Dynamic Business Modeling — ( DBM ) describes the ability to automate business models within an open framework. The independent analyst firm Gartner has recently called Dynamic Business Modeling critical for BSS solutions to succeed . Dynamic Business Modeling is based on… … Wikipedia
Dynamic Logical Partitioning — (DLPAR), is the capability of a logical partition (LPAR) to be reconfigured dynamically, without having to shut down the operating system that runs in the LPAR. DLPAR enables memory, CPU capacity, and I/O interfaces to be moved nondisruptively… … Wikipedia
Dynamic random access memory — (DRAM) is a type of random access memory that stores each bit of data in a separate capacitor within an integrated circuit. Since real capacitors leak charge, the information eventually fades unless the capacitor charge is refreshed periodically … Wikipedia
Dynamic Discounting — Dynamic Payables Discounting is a process which allows buyers and sellers of commercial goods and services to dynamically change the payment terms such as net 30 to accelerated payment based on a sliding discount scale. Dynamic Payables… … Wikipedia
Dynamic Diagrams — is an information design consultancy based in Providence, Rhode Island, USA. Its services include information architecture and design for web sites and applications, as well as diagramming complex processes, systems, and data to help clients… … Wikipedia
Dynamic discounting — Dynamic payables discounting is a process which allows buyers and sellers of commercial goods and services to dynamically change the payment terms such as net 30 to accelerated payment based on a sliding discount scale. Dynamic payables… … Wikipedia
Dynamic awareness theory — (DAT) offers an alternative to explaining the creation of awareness in distributed work groups. DAT highlights the important role of users and social practices in awareness creation. The theory further points to the dynamic nature of awareness… … Wikipedia
Dynamic Adaptive Streaming over HTTP — (DASH) is a multimedia streaming technology currently being developed under MPEG. Work on DASH started in 2010; it became a Draft International Standard in January 2011, and it is expected to become an International Standard in November 2011.… … Wikipedia
Dynamic Terrain — A Dynamic Terrain is the representation of terrain (e.g. mountains, hills, valleys) together with the capability for modification during a simulation (e.g. a constructive soldier (i.e. battlespace entity) digging a trench). Contents 1 Dynamic… … Wikipedia
Dynamic General Guardian — The Dynamic General Guardian are a series of fictional super robots from the Super Robot Wars series. Often called Double G units for short, they appear in the Super Robot Wars Alpha series and the series. All units in this series of robots are… … Wikipedia