The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.

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Dynamic capabilities and strategic management

This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.

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Dynamic capabilities, what are they?

Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output The dominant logic focused on tangible resources, embedded value, and transactions Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships The authors believe that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators

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Evolving to a New Dominant Logic for Marketing

Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

https://memberfiles.freewebs.com/84/90/65819084/documents/TOWARD%20A%20KNOWLEDGE-BASED%20THEORY%20OF%20THE.pdf

Toward a Knowledge-Based Theory of the Firm

In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.

https://www.jstor.org/stable/pdfplus/259056.pdf

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

This study explores relationships between campus leadership and the organizational-level dynamic capabilities that underpin the management of research universities. Our observations suggest that the presence of leaders who marry strategic thinking and capabilities development enhance the likelihood of a university’s competitive fitness and long-term survival. We compare and contrast strategic decisions and leadership propensities of chancellors at UC Berkeley and presidents at Stanford University. Our findings help explain why Stanford has advanced vis-a-vis Berkeley and hint at the challenges and opportunities facing Berkeley chancellors. We also suggest that it is timely for university presidents to begin to manage proactively the university and, to the extent possible, its innovation ecosystem to increase the chances that their institutions will continue to prosper in an increasingly competitive environment that is also exposed to uncertainty and change.

Campus Leadership and the Entrepreneurial University: A Dynamic Capabilities Perspective

Decision Making Processes and the Rate and Direction of Innovation

The following sections are included:OverviewThe Nature and Importance of Competition and the Goals of AntitrustInnovation and Market Power AssessmentInnovation and Cooperative Agreements among CompetitorsThe (Traditional) Serial ModelThe Simultaneous ModelOrganizational Requirements of InnovationGovernance Alternatives for InnovationThe price mechanismInternal organizationStrategic alliancesAntitrust Treatment of Agreements Among CompetitorsProposed Modifications to U.S. Antitrust Law Affecting Cooperative Agreements Among CompetitorsConclusionSummaryZusammenfassungReferences

Antitrust Policy and Innovation: Taking Account of Performance Competition and Competitor Cooperation

The curriculum at many business schools is in a period of ferment as overhauls are contemplated for a variety of reasons. One of the most compelling needs is for integration across disciplines. The Dynamic Capabilities Framework, one of the dominant paradigms in management studies, can serve this unifying function by providing guidance for integrating the curriculum across disciplines and between theory and practice. Implementation along the lines proposed will give students more of what they want and improve the contribution of business schools to the conception and pursuit of managerial goals.

Achieving Integration of the Business School Curriculum Using the Dynamic Capabilities Framework

Multi-sided platforms (MSPs) are becoming increasingly important in contemporary economies. This special issue of California Management Review aims to stimulate collective discussion among researchers and practitioners on advancing diverse types of MSPs and on better understanding their future development. This article analyzes five contributions to this special issue and explores the growth trajectories of MSPs. There are three types of platforms: born-platform, platform-born adjacent, and incumbent-born. And they rely respectively on three market entry strategies: market creation, market broadening, and market deepening. This article also spotlights the coopetition dynamics of the platforms.

David J. Teece

Papers

Campus Leadership and the Entrepreneurial University: A Dynamic Capabilities Perspective

Decision Making Processes and the Rate and Direction of Innovation

Antitrust Policy and Innovation: Taking Account of Performance Competition and Competitor Cooperation

Achieving Integration of the Business School Curriculum Using the Dynamic Capabilities Framework

Managing Multi-Sided Platforms: Platform Origins and Go-to-Market Strategy