The development of dynamic capabilities through organisational and managerial processes

Abstract

One key consequence of the dynamic capabilities approach is that the competitive advantage of a firm lies in its organisational and managerial processes. The research question examined in this paper is how organisational processes such as knowledge management and managerial processes such as the coordination between top managers specifically create dynamic capabilities. After reviewing the literature, several case studies are presented and the impact of these particular organisational and managerial processes on dynamic capabilities is examined in detail. The first case is a healthcare firm that used a managerial process; however, this firm did not achieve a dynamic capability. The other two cases specifically illustrate how a financial services firm used an organisational process and how a manufacturing firm used a managerial process to develop dynamic capabilities. In comparing these three cases, the three sets of activities that are necessary to develop a dynamic capability are demonstrated.