Dynamic Capabilities: What are They?

Posted: 17 Nov 2009

See all articles by Kathleen M. Eisenhardt

Kathleen M. Eisenhardt

Stanford University - Department of Management Science & Engineering

Jeffrey A. Martin

The University of Texas at Austin

Date Written: 2000

Abstract

Seeks to present a better understanding of dynamic capabilities and the resource-based view of the firm. Dynamic capabilities are considered to be the "organizational and strategic routines by which firms achieve new resource configurations." Dynamic capabilities are identifiable and specific routines that can serve different purposes, including integrating resources, reconfiguring resources within firms, and guiding the gain and release of resources. Various examples such as the product development process and alliancing, are discussed. Commonalities related to effective dynamic capabilities can be seen across firms though this does not mean that these capabilities are exactly alike. The dynamism of the market can impact the sustainability of the dynamic capabilities and the causal ambiguity of these capabilities. Moderately dynamic markets see robust, grooved routine, while high velocity markets experience simple rules and real-knowledge creation. The evolution of these dynamic capabilities within a firm are unique but the firm's individual path is shaped by well-known learning mechanisms. Competitive advantage does not lie in the dynamic capabilities themselves but rather in the resource configurations that managers build using these dynamic capabilities. (SRD)

Keywords: Dynamic capabilities, Market dynamism, Resource model, Competitive advantages, Experiential learning, Resource management, Organizational learning

Suggested Citation

Eisenhardt, Kathleen M. and Martin, Jeffrey A., Dynamic Capabilities: What are They? (2000). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1505905

Kathleen M. Eisenhardt (Contact Author)

Stanford University - Department of Management Science & Engineering ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

Jeffrey A. Martin

The University of Texas at Austin ( email )

Austin, TX 78712
United States
512-232-4750 (Phone)
512-471-3937 (Fax)

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