How dynamic can organizational capabilities be? Towards a dual‐process model of capability dynamization

TLDR

Dynamic capabilities are increasingly viewed as essential for overcoming the rigidities inherent in organizational capability building. This study investigates whether organizational capabilities can be dynamically reconfigured, and proposes a separate capability‑monitoring function to preserve their strategic value. The authors analyze path dependency, structural inertia, and commitment as drivers of rigidity, evaluate existing dynamic capability approaches, and introduce a countervailing, second‑level observation framework for capability monitoring. They find that conventional dynamic capability models risk eroding the core strengths of organizational capabilities, potentially undermining their strategic power, and recommend a tiered capability‑monitoring solution. © 2007 John Wiley & Sons, Ltd.

Abstract

Abstract The recent discussion in the field of strategic management broadly favors the idea of dynamic capabilities in order to overcome potential rigidities of organizational capability building. The major question addressed in this paper is whether capabilities can actually be conceived as being in flux—and if so, to what extent and in which way? After briefly recapitulating the distinguishing features of organizational capabilities, path dependency, structural inertia, and commitment are identified as the main capability‐rigidity drivers causing a managerial dilemma. In the search for a resolution of this dilemma different approaches of dynamic capabilities are identified and discussed. The analysis shows that the approaches suffer from inherent conceptual contradictions: the dynamization runs the risk of dissolving the original idea and strength of organizational capability building. Ultimately, capabilities would lose the strategic power attributed to them in the resource‐based view. The last section of this paper therefore aims to develop an alternative approach, which aims at preserving the original merits of organizational capability and solving the rigidity issue not by integrating a dynamic dimension into the capability construct but rather by establishing a separate function (‘capability monitoring’). The suggestions mount up to a tier solution. Its logic builds on the dynamics of countervailing processes and second‐level observation. Copyright © 2007 John Wiley & Sons, Ltd.