Handbook of Organizational Learning and Knowledge Management, Second Edition

A Review of the Concept

The dynamic capability (henceforth DC) perspective has emerged in the last two decades as a promising attempt to untangle the complex problem of describing how firms learn to adapt their internal and external resource configurations and processes to shifting expectations and market conditions in pursuit of competitive advantage. In their original definition of the concept, Teece, Pisano, and Shuen posit:

We refer to this ability to achieve new forms of competitive advantage as ‘dynamic capabilities’ to emphasize two key aspects . . . The term ‘dynamic’ refers to the capacity to renew competences so as to achieve congruence with the changing environment . . . The term ‘capabilities’ emphasizes the role of Strategic Management in appropriately adapting, integrating, and reconfiguring internal and external organizational skills, resources, and functional competences to match the requirements of a changing world.

(Teece, Pisano, and Shuen, 1997: 510)

The fact that the achievement of ‘new forms of competitive advantage’ and of ‘congruence with changing environment’ is premised as a constitutive component of the concept rather than as a goal in pursuit of which the ‘renewal’ is made, has created significant debate in the literature. The difference is not trivial, for at least two reasons. First, it implicitly equates change with adaptation which is clearly false. The ability of a firm to change its configuration of resource and capabilities does not necessarily ...