The impact of dynamic capabilities in disrupted supply chains—The role of turbulence and dependence

Abstract

This paper clarifies how a firm's use of dynamic capabilities (DCs) affects its supply chain management capabilities (SCMCs) when facing turbulence and interdependencies. First, it explains that the extent to which their DCs strengthen SCMCs grows with greater environmental turbulence, less so for within-firm and within–supply chain turbulence but more so for external environmental turbulence. Second, it illuminates that the extent to which DCs strengthen SCMCs increases with greater dependence. Dependencies condition this impact by (1) directing the firm's attention toward gaps in these SCMCs, and by (2) increasing path dependencies (i.e., rigidities) in interfirm integration and collaboration processes, through self-reinforcing effects, that may lead to lock-ins. Third, it elucidates that as mutual dependence decreases, the positive marginal impact of DCs on SCMCs due to greater dependence further increases. The latter is because of the greater urgency that this condition creates. Consequently, DCs become more relevant as means to renew ordinary capabilities in disrupted supply chains when firms face increasing turbulence and dependence. The theoretical arguments are illustrated drawing on several firms that have faced disruptions in their supply chains.