Managing in a Global Context
DYNAMIC CAPABILITIES
Montonen MariaNguyen HuyenNguyen Thi Hong YenNuttens Robin
1. Nature of Dynamic Capabilities2. Market Dynamism3. Evolution of Dynamic Capabilities4. The Role of the Manager
Presentation Outline
1. Nature of Dynamic Capabilities
What comes to your mind when you think
about:Dynamic Capabilities?
Nature of Dynamic CapabilitiesDynamic 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)
RESOURCES
CAPABILITIES
COMPETITIV
E ADVANTAG
E
STRATEGY
Nature of Dynamic CapabilitiesDynamic Capabilities VS RBV
Nature of Dynamic CapabilitiesDynamic 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
2. Market Dynamism
Market DynamismHow 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 DynamismModerately dynamic vs. high velocity markets
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
Causal ambiguity of dynamic capabilities differs with market
dynamism
Sustainability of the capabilities
differs with market dynamism
Market DynamismWhat are the implications?
3. Evolution of Dynamic Capabilities
EvolutionWhich 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
EvolutionQuestions
• 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
4. The Role of the Manager
The role of the ManagerManagerial practices in Dynamic Capabilities framework
Leadership in Dynamic Capabilities: Disney CaseThe Role of the Manager
20s 30s 60s 80s 2005
Roy O. DisneyDonn TatumE. Cardon WalkerRon W. Miller
Disney corporate culture
Competitve advantage:Innovative animation techniques
Creative collaboration routines
Adopt Touchstone Pictures’ dynamic
capabilities to Disney animation
Reconfigure & Integrate new resources
QUESTIONS?