The Nature of Technology and Technological Change

Dynamic Capabilities
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Dynamic Capabilities
The dynamic capabilities concept has been gaining popularity in the strategic management in management field. This concept due to it the fact that it is new may not be well understood hence the high chances of the concept confusing many. Therefore, it is critical to analyze the definition of dynamic capabilities (DCs) as brought out by Teece, Pisano and Shuen in a working paper (Teece, Pisano, & Shuen, 1997). The fundamental query in management field is how organizations achieve and sustain a competitive advantage in the market that is so radical and ever changing. For this reason the paper seeks to identify various dynamic capabilities and how they affect the organization’s performance. It will also compare the dynamic capabilities with the resource based view as it is identified by Barney. Further, it checks on how these capabilities can be applied by organizations in order to retain competitive advantage in a face of technological disruptions (Teece, Pisano, & Shuen, 1997).
Dynamic capabilities are basically driven towards the attainment of future resources which is to say that they are at risk with the short term pressures in efforts to minimize costs. This is because the impact of these capabilities can be determined whether it was valuable ex post. Teece explain that DCs are processes or procedures designed by positions and paths (Teece, Pisano, & Shuen, 1997). This may include reconfiguration and learning, integration and co-ordination while paths and positions refer to the external and internal pressures contracting and empowering the dynamic capabilities. The internal factors may include complementary, reputation, technological stock, financial and structural assets. On the other hand, external factors would refer to the organization against its markets and the institutional environment. Resources are the factors considered as the inputs for production activity which may include equipment, skills, patents, brand names, and finance among others. However, on the other hand, productive production calls for coordination and corporation of the group of resources. Capability is the capacity within a group of resources to carry out a particular activity.
One of the dynamic capability is processes which pivotal in encountering new challenges. This calls for the ability of the employees to learn very fast and to develop strategic assets. It is necessary to incorporate and integrate new strategic assets such as technology, customer response and capability in the organization. The ones already in place need to be transformed or reconfigured. The concept adopted by Teece suggests that the most important thing in the organization is its capacity that it detects and develop opportunities and threats, to take advantage of the opportunities and maintaining competitive advantage (Teece, Pisano, & Shuen, 1997). This is achieved through the enhancement, protection, combination and at times reconfiguring the enterprise’s tangible as well as the intangible assets.