1. Managing in a Global Context
DYNAMIC CAPABILITIES
Managing in a Global Context
Montonen Maria
Nguyen Huyen
Nguyen Thi Hong Yen
Nuttens Robin

2. Presentation Outline
1. Nature of Dynamic Capabilities 2. Market Dynamism 3. Evolution of Dynamic Capabilities 4. The Role of the Manager

3. 1. Nature of Dynamic Capabilities

4. What comes to your mind when you think about: Dynamic Capabilities?

5. Dynamic Capabilities VS RBV
Nature of Dynamic Capabilities
"It consists of strategic and organizational specific processes that create values in companies operating in dynamic markets by manipulating resources into new strategies for value creation“
Eisenhardt; Martin (2000)

6. Dynamic Capabilities VS RBV
RESOURCES
CAPABILITIES
COMPETITIVE ADVANTAGE
STRATEGY
Nature of Dynamic Capabilities

7. Dynamic Capabilities VS RBV
Nature of Dynamic Capabilities

8. Dynamic Capabilities VS RBV
Nature of Dynamic Capabilities DC
RBV
Internal analysis of the firm
Reconfigure
Organizational capabilities: routines and standard operating procedures
Source of competitive advantage
Internal analysis of the firm
Possess
Tangible and Intangible resources
Source of sustained competitive advantage

9. 2. Market Dynamism

10. Patterns of effective dynamic capabilities depend on market dynamism
How does market dynamism affect dynamic capabilities?
Market Dynamism
A firm can be in a market of moderate dynamism or high velocity dynamism
Patterns of effective dynamic capabilities depend on market dynamism
Dynamic capabilities differ in their dependence on existing knowledge

11. Moderately dynamic market
Moderately dynamic vs. high velocity markets
Market Dynamism
Moderately dynamic market
High velocity market
Change occurs frequently and on predictable and linear paths
Industry structures are relatively stable
Various stakeholders are well known
Effective dynamic capabilities are heavily dependent on existing knowledge
“Learning before doing” approach
Change is more nonlinear and harder to predict
Industry structure is unclear
Successful business models are unclear
Various stakeholders are vague
Less reliance on existing knowledge
Dynamic capabilities are simple

12. Sustainability of the capabilities differs with market dynamism
What are the implications?
Market Dynamism
Sustainability of the capabilities differs with market dynamism
Causal ambiguity of dynamic capabilities differs with market dynamism

13. 3. Evolution of Dynamic Capabilities

14. Order of implementation
Which factors influence the evolution of dynamic capabilities?
Evolution
Learning mechanism
Repeated practice
Codification of experience into technology and formal procedure
Pacing of experience: either too much or too little at a time
Mistake: small losses, not success or big failure
Market dynamism
Moderately dynamic market: variation
High velocity market: selection
Order of implementation
Consequential

15. How to create competitive advantages in high velocity market?
Questions
Evolution
How to create competitive advantages in high velocity market?
Are those advantages sustained?
By using dynamic capabilities to create resource configurations that have those characteristics of competitive advantages
Duration of competitive advantages in high velocity market is unpredictable as dynamic capabilities are unstable as well due to continuous changes

16. 4. The Role of the Manager

17. Managerial practices in Dynamic Capabilities framework
The role of the Manager

18. Leadership in Dynamic Capabilities: Disney Case
The Role of the Manager
20s
30s
60s
80s
2005
Roy O. Disney
Donn Tatum
E. Cardon Walker
Ron W. Miller
Reconfigure & Integrate new resources
Competitve advantage:
Innovative animation techniques
Adopt Touchstone Pictures’ dynamic capabilities to Disney animation
Creative collaboration routines
Disney corporate culture

19. Questions?