Explaining the Causes and Effects of Dynamic Capabilities Generation: A Multiple‐Indicator Multiple‐Cause Modelling Approach

TLDR

The study develops a multiple‑indicator multiple‑cause model to explain dynamic capabilities generation and aims to clarify theoretical debates while offering a practical guide for understanding their origins and outcomes. The authors design a measurement tool based on operational, structural, and strategic flexibility, then test a multiple‑indicator multiple‑cause model using survey data from 200 Spanish CEOs to assess how identified factors trigger dynamic capabilities generation. Results indicate that high perceived environmental dynamism, knowledge codification, and technical innovation are significant drivers of dynamic capabilities generation.

Abstract

The purpose of this paper is to develop a multiple‐indicator multiple‐cause model to explain dynamic capabilities generation. We use one of the main common effects of dynamic capabilities (operational, structural and strategic flexibility) to design a measurement tool for dynamic capabilities generation. Based on this measurement tool, we test the influence of several factors identified in the specialized literature as potential causes that trigger and promote dynamic capabilities generation. We use data from a survey of 200 CEOs of Spanish firms to test the model. The results show that only organizations whose managers have perceived a high degree of environmental dynamism have generated dynamic capabilities. The results also show that knowledge codification and technical innovation are significantly related to dynamic capabilities generation. We attempt to shed light on current theoretical debates about dynamic capabilities generation and provide a practical guide to explain the origin and results of dynamic capabilities that have been tested empirically.