What comes to your mind when you think about: Dynamic Capabilities?
Nature of Dynamic Capabilities Dynamic Capabilities VS RBV "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)
RESOURCESCAPABILITIES COMPETITIVE ADVANTAGE STRATEGY Nature of Dynamic Capabilities Dynamic Capabilities VS RBV
Nature of Dynamic Capabilities Dynamic Capabilities VS RBV
Nature of Dynamic Capabilities 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 Dynamic Capabilities VS RBV RBVDC
Market Dynamism How does market dynamism affect dynamic capabilities? Dynamic capabilities differ in their dependence on existing knowledge Patterns of effective dynamic capabilities depend on market dynamism A firm can be in a market of moderate dynamism or high velocity dynamism
Market Dynamism Moderately dynamic vs. high velocity markets
Causal ambiguity of dynamic capabilities differs with market dynamism Sustainability of the capabilities differs with market dynamism Market Dynamism What are the implications?
Evolution Which factors influence the evolution of dynamic capabilities? 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 Learning mechanism Moderately dynamic market: variation High velocity market: selection Market dynamism Consequential Order of implementation
Evolution Questions 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
The role of the Manager Managerial practices in Dynamic Capabilities framework
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 Disney corporate culture Competitve advantage: Innovative animation techniques Competitve advantage: Innovative animation techniques Creative collaboration routines Adopt Touchstone Pictures’ dynamic capabilities to Disney animation Reconfigure & Integrate new resources