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date: 27 February 2020

Abstract and Keywords

Our understanding of dynamic capability has been impeded by lack of consensus over definition and limited empirical investigation. To better understand the nature and role of dynamic capabilities and to guide empirical research into their antecedents and consequences, we emphasize the systemic nature of capabilities. We propose capability architecture as a framework to describe and analyze firms’ capability systems in preference to the hierarchical capability structures presented in the dynamic capabilities literature. Our framework allows us to investigate not only the hierarchical structuring of capabilities but also their linkages to managerial cognition, organizational processes, and organizational structure. Within this framework, dynamic capability—a firm’s “capacity to alter how it makes its living”—emerges not only from the existence of a distinct category of “dynamic” capabilities whose explicit role is to effect change, but also from the flexibility of “ordinary” capabilities and from system-wide changes in the overall capability architecture. This integrated approach to organizational capabilities has the potential to overcome the fruitless debate over delineating dynamic from ordinary capabilities and to foster a closer linkage between conceptual and empirical research into dynamic capability.

Keywords: dynamic capabilities, capability architecture, organizational capabilities, managerial cognition, organizational processes, organizational structure, systemic approach

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