Paper Example on Dynamic Capabilities

Published: 2021-07-21
1895 words
7 pages
16 min to read
Carnegie Mellon University
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Dynamic capability is considered to be that ability to adapt to the status quo. For an organization, it would be defined as the ability of the organization to employ a purposeful adaptation to the resources available within its jurisdiction. An industry achieves dynamic capability when it can foster and strengthen its competencies both internally and externally with the objective of ensuring it operates within the requirements of the constantly changing micro and macro environment. The business world has become so complex with numerous changes and activities taking place each day. It calls for versatility to be able to continue offering the services or the good of the company without being shaped out.

The term dynamic capabilities are often viewed in its plural nature to emphasize the fact that dynamism is achieved by a combination of multiple efforts to take care of the changes that exist in both the internal and the external environment of operation. The efforts are a combination of the capabilities of different individuals that exist within the firm. In fact, dynamism is achieved best when different skilled personnel is brought together to operate for the achievement of common goal.

The idea of dynamic capabilities was brought into place by research and finding of several notable authors. Person of interest in this topic is Gary Hamel who conducted research in multinational strategy research strategy and published an article that was titled Core Competencies of the Corporation. In his research works, he gives an exploration of the various important competency and how to achieve such competencies within a business environment. His explanations and ideas bring into action the concept of dynamism with regards to capabilities. It is appreciated for the fact that an individual can never be so perfect in all competencies and thus the need to have people with different lines of specialization for the completion of a specified tasks.

Confusing dynamic capabilities and operational capabilities are possible. Operational capabilities mainly focus on the smooth running of an organizations operations at hand. On the other hand, dynamic capabilities are focused on how an organization can respond to changes in its area of operations in such an effective and efficient manner.

The efforts of dynamic capabilities always drag the organization towards the achievement of success. Success in the organization is created by short term competition for products or positions that would result ultimately in an advantage of improved products or services as a result of the competitive advantage realized. This was the concept that was put forth by Shuen Amy in his writings and research. Achievement of dynamic capabilities is dependent upon the available resource base and their utility according to this re-known writer and many other writers. Competencies are achieved mainly through the routine in the field of specialization. Though routine may be considered boring in most instances, it acts as a good recipe for the realization of competencies. It is a fact that dynamic capabilities act as a link between life changing approaches in an organization and literature information about the economic status of the organizations (Lin & Wu, 2014).

Sustaining the competitive advantage that is enjoyed by an organization leads to the realization of a clearer view of the economic resources of an organization. This is a bit different to the idea of dynamic capability. As stated earlier, dynamic capabilities focus on how an organization can respond quickly and efficiently to the ever changing environment using its competitive survival ability. It is a waste of company resources to have a senior company management that does have an understanding of the dynamic capabilities. In situations where the management fully understands this concept, the efficiency of the production process and the service delivery is greatly improved mainly because the management is pro change and will do anything possible to achieve success. The spirit in the management section of the organization would pass on to the other personnel within the firm leading to a chain of dynamism to achieve the best in the company. Senior management must, therefore, focus on how to make dynamic capabilities of the firm more useful to achieve the goals of the organization.

The theory of dynamic capabilities was mainly developed for the senior most management of any organization. This is because this team of persons is responsible for coming up with development strategies are procedures. These strategies are meaningless if they cannot be able to embrace the changes that are like to arise in the environment. The effectiveness of the strategies is in their ability to adapt to the unpredictable changes in a prompt manner. The dynamic capabilities concept is merely an adaptation process for organizations. An example is cited in an organization that is used to the old method for production. For instance the use of analog systems in the organization. It is quite challenging to move organization instantly from an analog system to digital system despite the urgent demand by the market to do so with urgency (Ireland, 2001). People would want to adapt slowly, and the majority may never want to change the system. The slow adaptation mainly affects the organization if the majority of the staff are of the cohort of the baby boomers or rather conservatives. A quick and efficient adaptation process identification of unique and useful competencies should be the center of focus of the leadership. The staff should be prepared to be versatile to allow for any is heartbreaking to the management when the personnel in the organization shy away for embracing changes that would bring development to the firm. The abilities of the firm to have the capacity to own dynamic capabilities relies on all the staff who are the most important players in the business (Li & Liu, 2014).

The process of dynamic capabilities

Understanding the process of the dynamic capability is very important for challenging the emerging issues in the business environment. The process of dynamic capabilities requires full corporation of the both the organisation and the employees within the organisation. The staff, for instance, are expected to be fast learners and ready to embrace changes. In fact, the ability to embrace changes should be among the issues of the interview during the recruitment process. Adoption of new technologies that are user-friendly and enable for the acquisition of the feedback from the clientele is necessary for the embracing of changes. The feedback from the customers gives the organization heads-up on an issue that requires being changed with immediate effect. This builds a preparedness among the staff of the organization thus the ability to have everyone ready when such changes are initiated (Beske, Land & Seuring, 2014).

Integrating technology and consumer feedback is a great move as it will register the clients satisfaction. Moreover, the abilities of every staff is marched with the areas they can best operate in without any challenges. The greatest overhaul in this process is the change of the strategic asset that is already existing. The most important thing in the case of dynamic capability is the awareness of the business in realizing the potential opportunities and their longevity, grabbing such opportunities and remaining ahead in the competitive race through the adoption of current technologies and inventions. Sometimes the dynamic capabilities process would demand the need to bring an end to the existing systems and put in place new ones that may not be familiar with the existing staff. This provides the requirement for training to boost the competencies of the staff (Helfat & Peteraf, 2015).

The learning process

The learning process is essential for the development of versatility to embrace dynamic capabilities. The dynamic capability would require the immediate adoption of new patterns and ways of doing things. This means that the routine would be interfered with and staff would have to adapt to new way of doing things which may also change anytime depending on the demands of the market. Routines are always presented as a usual pattern that provides the best way completing the task within an organization. People stick to routine mainly because they would wish to maintain the usual quality that was previously set. The routines are mainly a result of group behavior that does work to be successful. It is a fact that people with different skills would bring their competencies together to make work a success. Working together is, therefore, a necessity for the success of the firms. This is achievable by an appreciation of dynamism that exists and by trying to come up with the best way to which the different competencies can be successfully incorporated for smooth operation. The learning process only begins when the staff within the organization starts to appreciate that everyone is equally important irrespective of the positions held by the organization. Equal appreciating is a motivating factor for the employees to be on the lookout for any changes and consequently perform their best in every situation (Beske, Land & Seuring, 2014).

Assets and dynamic capabilities

The performance of the firm is mainly determined by its ability to bring together and make good use of its assets of the organization. The utilization of the available resources becomes more efficient when it is done using the already developed routines compared to when routines do not exist. However, the idea of competitive advantage must still be utilized within the organization. Every asset becomes very lucrative with the application of the competitive advantage. All the assets are integrated with the sole purpose of increasing the finances made from such assets (Schilke, 2014)..

The market is considered to be in constant first change. Therefore, this calls for the need to have the available assets restructured with the sole purpose of ensuring the achievement of all the internal and external goals. It is not possible for the firm to be static in its operation in an environment that is constantly changing. The organization must, therefore, take the chance of changing various aspects of its operation to fit in this kind of an environment. The process of adopting such changes is both time-consuming and costly. Therefore, working to ensure profits are made at a low cost of spending becomes the focus of the organization. The firm has to conduct serious research on the environment to understand what should be incorporated to make a business ready to respond to changes at any point of its operation. The process of change must be adopted long enough before the normal operations are resumed. The company may employ various strategies to be ready for the changes. Among the process adopted could include sole independence or even strategic alliances. Whichever the method adopted, the firm must ensure it is well updated and ahead of its competitors at all time (Schilke, 2014).

Co specialization of the firm asset is an important process in the realization of dynamic capabilities. This is the process of making the available assets to be uniquely valuable when they are brought together. For instance, the assets available in the firm could include either human or physical assets. When these two assets are added to the intellectual property to create a combination of assets in the firm, then we consider this as co-specialised assets. The idea of combining the assets is mains to ensure that their value is increased. The process of combination is done because maybe in isolation the assets would be of lesser value thus would not bring any major profits to the organization. The competitive advantage is enjoyed when...

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