quo vadis, dynamic capabilities? acontent … · 2018-01-30 · studying dynamic capabilities...

r Academy of Management Annals2018, Vol. 12, No. 1, 390–439.https://doi.org/10.5465/annals.2016.0014

QUO VADIS, DYNAMIC CAPABILITIES?ACONTENT-ANALYTICREVIEWOFTHECURRENTSTATEOF

KNOWLEDGE AND RECOMMENDATIONS FORFUTURE RESEARCH

OLIVER SCHILKE1

The University of Arizona

SONGCUI HUThe University of Arizona

CONSTANCE E. HELFATTuck School of Business at Dartmouth

Although the dynamic capabilities perspective has become one of the most frequentlyused theoretical lenses in management research, critics have repeatedly voiced theirfrustration with this literature, particularly bemoaning the lack of empirical knowl-edge and the underspecification of the construct of dynamic capabilities. But researchon dynamic capabilities has advanced considerably since its early years, in whichmost contributions to this literature were purely conceptual. A plethora of empiricalstudies as well as further theoretical elaborations have shed substantial light ona variety of specific, measurable factors connected to dynamic capabilities. Our ar-ticle starts out by analyzing these studies to develop a meta-framework that specifiesantecedents, dimensions, mechanisms, moderators, and outcomes of dynamic capa-bilities identified in the literature to date. This framework provides a comprehensiveand systematic synthesis of the dynamic capabilities perspective that reflects therichness of the research while at the same time unifying it into a cohesive, overarchingmodel. Such an analysis has not yet been undertaken; no comprehensive frameworkwith this level of detail has previously been presented for dynamic capabilities. Ouranalysis shows where research has made the most progress and where gaps andunresolved tensions remain. Based on this analysis, we propose a forward-lookingresearch agenda that outlines directions for future research.

INTRODUCTION

A steadily increasing number of managementscholars have become interested in dynamic capa-bilities (see Figure 1). While originating in the field ofstrategy (Eisenhardt & Martin, 2000; Teece, Pisano, &Shuen, 1997), the study of dynamic capabilities nowrepresents a vibrant research area in other manage-ment fields as well, including entrepreneurship (e.g.,

Townsend & Busenitz, 2015), technology and in-novation management (e.g., Cai & Tylecote, 2008),international management (e.g., Vahlne & Ivarsson,2013), operations management (e.g., Anand, Ward,Tatikonda, & Schilling, 2009), management in-formation systems (e.g., Pavlou & El Sawy, 2010),marketing management (e.g., Fang & Zou, 2009), andhuman resources (e.g., Festing & Eidems, 2011),among other areas. Overall, we think it is fair to saythat the dynamic capabilities perspective has firmlyestablished itself as one of the most influential theo-retical lenses in contemporary management scholar-ship (see Amburgey, Dacin, & Singh, 2000; Cepeda &Vera, 2007; Di Stefano, Peteraf, & Verona, 2014, forsimilar assessments).

However, no systematic literature review hasappeared since empirical research on dynamic

Wegratefully acknowledge the in-depthandconstructivecomments from the Editor Kim Elsbach, the Associate Edi-tor Teppo Felin, as well as two anonymous reviewers. Weare also grateful for insightful methodological suggestionsfrom Bart de Jong, David Kroon, and Nathan Podsakoff.

Oliver Schilke and Songcui Hu contributed equally tothis work.

1 Corresponding author.

390

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https://doi.org/10.5465/annals.2016.0014

capabilities started to take off in recent years. Most ofthe earlier reviews that we identified (Ambrosini &Bowman, 2009; Arend & Bromiley, 2009; Barreto,2010; Di Stefano, Peteraf, & Verona, 2010; Easterby-Smith, Lyles, & Peteraf, 2009;Helfat et al., 2007;Helfat& Peteraf, 2009; O’Reilly & Tushman, 2008; Wang &Ahmed, 2007; Zahra, Sapienza, & Davidsson, 2006)cover only the initial years of dynamic capabilities re-search. As a result, these reviews are unable to assessthe degree to which repeated criticisms of under-specification of the concept and a lack of empiricalknowledge (Arend &Bromiley, 2009; Kraatz & Zajac,2001; O’Reilly & Tushman, 2008; Williamson, 1999)have been successfully addressed by more recent re-search and to what extent these recent investigationshave broadened the nomological network in whichdynamic capabilities are embedded. Some relativelyrecent survey pieces have examined the disciplinaryfoundations of dynamic capabilities research (Peteraf,Di Stefano, & Verona, 2013) or focused on selected as-pects of dynamic capabilities (Helfat & Martin, 2015;Wilden, Devinney, & Dowling, 2016), but they have

not provided a comprehensive framework for under-standing the antecedents, dimensions, mechanisms,moderators, and outcomes of dynamic capabilities.2

In the current article, we aim to fill this gap bypursuing two objectives. First, we aim to synthesizethe insights in the vast amount of prior research andto bring greater coherence to the extant body ofknowledge. To this end, we offer a systematic reviewof the current state of the dynamic capabilities per-spective in terms of its fundamental building blocks.As part of this review, we clarify aspects of researchon dynamic capabilities about which there has beenconfusion in the literature. This review culminatesin a comprehensive framework summarizing themost frequently studied constructs and their inter-relationships. The framework is general and flexibleenough to accommodate different approaches for

FIGURE 1Google Scholar Search for the Term “dynamic capabilities”

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Publication year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of hits

Note: Search performed on June 24, 2017

2 A prominent book on dynamic capabilities by Teece(2009) is largely a compendium of prior published articlesbyTeece, plus some new chapters by the author on selectedtopics, and does not contain a review of the literature.

2018 391Schilke, Hu, and Helfat

studying dynamic capabilities without suppressingcritical differences. In addition, our review of thecurrent state of knowledge covers important foun-dational issues, such as a discussion of frequentlyemployed definitions, theoretical assumptions, andtheory-integration efforts. This portion of the anal-ysis also incorporates a discussion of process-basedapproaches to theory development and an overviewof the methods that have been employed in the re-cent study of dynamic capabilities. Throughout thissection, we juxtapose the progress that has beenmade with earlier critiques of the dynamic capa-bilities research stream. Overall, our integrativereview of the current state of knowledge directlyaddresses prior calls for continued efforts to unifythe field of dynamic capabilities research (Barreto,2010; Wang & Ahmed, 2007) while at the same timewidening the scope and emphasizing the breadth ofconceptual resources available to researchers inthis area.

The second objective of this article is to go beyondcurrent knowledge to identify significant gaps inthe literature, unresolved issues, and promisingdirections to address these, so as to offer a glimpseinto the future of dynamic capabilities research. Forthis purpose, we conducted a systematic contentanalysis, in which we coded what prior articlesidentified as important limitations and fruitful av-enues for further research on dynamic capabilities,thus providing bottom-up insights into the views ofdynamic capabilities researchers about how the fieldmight profitably advance. We use these content-analytic findings as a springboard for our ownassessment and subjective recommendations forfurther research.

Among other areas for future investigation, we seeopportunities for researchers (1) to explore addi-tional mechanisms (i.e., mediators) that explainproposed relationships of dynamic capabilities withother variables, which is an area of weakness in thecurrent literature; (2) to continue to develop andelucidate relevant theoretical assumptions un-derlying the dynamic capabilities perspective, in-cluding more attention to feedback effects involvingdynamic capabilities and various antecedents, mod-erators, mechanisms, and consequences; (3) to in-crease the integration of the dynamic capabilitiesperspective with relevant theories that are currentlyunderused or not used at all, in concert with empir-ical investigation; (4) to deepen and broaden ourunderstanding of the dimensions of dynamic capa-bilities, including their microfoundations and un-resolved tensions with respect to the extent of their

routinization; (5) to reorient the analysis of conse-quences of dynamic capabilities to focus more onproximate outcomes, rather than solely prioritizefirm-level performance; (6) to add to recent attemptsto translate insights to a practitioner audience in-terested in implementing dynamic capabilities intheir organizations; (7) to pay greater attention to therole of dynamic capabilities in shaping markets andecosystems, an area that is noticeably underdevel-oped; and (8) to make greater use of empiricalmethodologies beyond qualitative case analysesand analysis of survey data, such as laboratory ex-periments and econometric analysis of “big” archi-val data, to further broaden the toolkit used indynamic capabilities research. By revealing awealthof exciting research possibilities, we contribute todefining a forward-looking research agenda, whichcan help scholars to build on prior studies in a cu-mulative fashion to fill gaps and resolve tensions inthe literature, while extending research along newdimensions.

This article proceeds by first briefly discussingthe origin and evolution of dynamic capabilitiesresearch. We then outline the content-analyticmethod that provides the starting point for our re-view. Next, we turn to the current state of knowledgeand the findings that recent dynamic capabilitiesinvestigations have offered. Finally, we develop anextensive road map of fruitful directions for futuredynamic capabilities research.

CONCEPTUAL BACKGROUND

Before delving into a systematic analysis of thedynamic capabilities literature, we offer some back-ground that helps to clarify the scope of this article.The dynamic capabilities perspective is often con-sidered an extension of the resource-based view(RBV) of the firm (Helfat & Peteraf, 2003); however,when Teece et al. (1997) introduced the concept ofdynamic capabilities, they sought to differentiate itfrom themore static orientation of the RBV.WhereastheRBVemphasizes the firm’s current resource base,defined as the firm’s resources (tangible and in-tangible assets) and operational capabilities, the dy-namic capabilities perspective primarily addressespurposeful modifications of this resource base. Al-though often underemphasized in the literature ondynamic capabilities, this perspective also encom-passes alterations to the firm’s external environment(Helfat & Winter, 2011; Teece, 2007).

To appreciate the distinctiveness of the dynamiccapabilities perspective (and the scope of the current

392 JanuaryAcademy of Management Annals

article), it is important to note that firm capabilitiescan be divided into two broad categories: (1) opera-tional (or ordinary) capabilities, which are directedtoward maintaining and leveraging the status quo interms of the scale and scope of activities, businesses,product lines, customer segments, and the like; and(2) dynamic capabilities, which are directed towardstrategic change (Helfat & Winter, 2011; Winter,2003; Zahra et al., 2006). As such, dynamic capabil-ities can be considered a distinct subset of organi-zational capabilities; specifically, they are thosecapabilities that can effect change in the firm’sexisting resource base (and the associated supportsystem such as the firm’s organizational and gover-nance structure), its ecosystem and external envi-ronment, as well as its strategy. Our review focuseson this capability subset. Over the last 20 years, re-search on dynamic capabilities has evolved to a de-greewhere it has become an institutionalized field ofits own, and although this field frequently draws onrelated literatures (such as those on absorptive ca-pacity and organizational learning), the scope of thisreview is confined to studies that have sought tocontribute to or draw from the dynamic capabilitiesperspective.

Dynamic capabilities arguably have captured at-tention because they may offer a route to competi-tive advantage under conditions of change, a vexinggoal that is the virtual Holy Grail of strategic man-agement (Helfat & Peteraf, 2009). The domain ofinterest spansmultiple levels of analysiswithin andoutside the organization, encompasses strategycontent and process, and involves numerous ap-plications such as innovation, acquisitions, alli-ances, market entry, diversification, and more(Helfat et al., 2007). This broad set of applications,combined with the inherent importance of thetopic, has made dynamic capabilities of interest toa wide range of scholars.

A distinguishing feature of dynamic capabilitiesis the systematic means of strategic change thatthey provide. All capabilities, including dynamiccapabilities, entail the capacity to carry out ac-tivities in a practiced and patternedmanner. Thus,a dynamic capability enables the repeated and reliableperformance of an activity directed toward strategicchange, as distinct from entirely ad hoc problem-solving (Helfat & Winter, 2011; Winter, 2003). Thiscapacity for repeated and reliable performance isthought to steminsignificantways fromorganizationalroutines (Eisenhardt &Martin, 2000; Stadler, Helfat, &Verona, 2013;Winter, 2000, 2003).Winter (2003: 991),for example, hasdescribedanorganizational capability

as a “high-level routine (or collection of routines).”In addition, because dynamic capabilities are con-text specific and embedded within organizations,firms must build them over time (Helfat & Martin,2015). Such capabilities are difficult to buy and sell,except as part of the sale of an entire organizationalunit in which they are embedded; as a result, theirdevelopment entails significant sunk costs (Winter,2003). Thus, obtaining a systematic means to pro-mote strategic change through dynamic capabilitiesrequires a substantial commitment of organizationaleffort, time, and funds.

Not surprisingly, given the challenges of achiev-ing strategic change as well as the organizationalcommitment required to do so, skeptics have askedwhether dynamic capabilities truly exist and, if so,how they function and what outcomes they pro-duce. Ultimately, only empirical research can an-swer these questions fully. For this reason, we nextturn to a systematic analysis of recent research ondynamic capabilities, which has a substantial em-pirical component, supplemented by theoreticalcontributions.

METHODS

Sample

The starting point for our review and assessmentof the literature is a comprehensive content analysisof journal articles about dynamic capabilities. Thesample primarily consists of articles published be-tween 2008 and 2016. We selected 2008 as thestarting year because many previous literature re-views, such as Barreto’s (2010) influential piece,ended in 2007. In terms of publication outlets, toidentify articles for inclusion in our analysis, webegan with the top 100 management journalsaccording to Thompson Reuters’ 2013 Journal Ci-tation Report (coincidentally, the top 100 were alsothe management journals with an impact factor ofgreater than 1.0). Starting with this broad range ofjournals allows for the inclusion of studies fromvarious subdisciplines of management that haveadopted the dynamic capabilities perspective,while at the same time ensuring a certain level ofacademic rigor. Using a variety of databases thatcover those 100 journals, we searched for articlescontaining “dynamic capabilit*” or “dynamic *capabilit*” in their titles or abstracts. This keyword-based search is consistent with our aim tofocus on articles intended to substantially drawfrom and/or contribute to the field of dynamic


capabilities research.3 Next, we further limitedour sample to articles published in journals thatfeature a minimum of two relevant articles. Thiscriterion places an emphasis on those outlets inwhich dynamic capabilities research is at leastsomewhat actively pursued by researchers. Theprocedure yielded a total of 314 articles pub-lished across 51 different management journals.

Finally, to ensure that our analysis also reflectsimportant earlier empirical developments, we com-plemented these recent articles with highly citedempirical work published prior to 2008. Based onPeteraf et al.’s (2013) list of the most-cited articles inthe dynamic capabilities research domain, we iden-tified 31 articles that have an empirical componentand added them to our sample, for a total of 345 ar-ticles. In the coding process, we then dropped 47 ofthese articles that only referred to dynamic capabil-ities superficially without substantively building onor contributing to thedynamiccapabilities literature.Dropping these 47 articles led to a final sample of 298articles. Table 1 provides an overview of the journalsthat published most of the articles in our sample.

Coding

In two separate coding sheets, we recorded boththe current state of knowledge (i.e., what the articlesin our sample have contributed to our knowledge ofdynamic capabilities) as well as recommendationsfor future research (along with limitations identifiedby authors). This latter coding allows us to synthe-size extant recommendations for future research,thus offering bottom-up insights into what the fieldas a whole sees as opportunities for future research(Brutus, Aguinis, & Wassmer, 2013; de Jong, Kroon,& Schilke, 2017). As noted by Campion (1993), pre-viously articulated limitations and avenues forfuture research afford other researchers the oppor-tunity to identify fruitful areas for further inquiry.Taken together, our dual-tracked coding approachprovides a solid basis for our synthesis of what the

field has learned thus far as well as a springboard forexamining where dynamic capabilities researchcould productively go next. We further augment thecontent analysis with our own assessment of the lit-erature. Then we make recommendations regardingissues thatwe believe have been largely resolved andthus may not require significant additional study, aswell as issues that in our view have received in-sufficient attention and should thus be at the centerof future inquiry.

Our content analysis began with the first two co-authors reading an article in its entirety, payingparticular attention to its discussion and limitationssections. We identified a statement as relevant onlywhen it focused specifically on either dynamic ca-pabilities or a particular instance of such a capabil-ity. In constructing a coding scheme, we followed aniterative approach ofmoving back and forth between

TABLE 1List of Covered Journals with Five or More Identified

Articles

Journal nameNumber ofarticles

Strategic Management Journal 36British Journal of Management 18Industrial Marketing Management 16Organization Science 15Journal of Product Innovation Management 13California Management Review 11Journal of Management Studies 11R&D Management 10Technovation 10Academy of Management Perspectives 9Industrial and Corporate Change 9Strategic Organization 9Academy of Management Journal 8International Journal of Project

Management8

International Small Business Journal 8Journal of Management 8Journal of Operations Management 8Decision Sciences 7International Journal of Management

Reviews7

International Journal of Operations andProduction Management

7

Journal of International Business Studies 7Journal of Management Information

System7

Research Policy 7Journal of Engineering and Technology

Management6

Journal of Supply Chain Management 6Asian Pacific Journal of Management 5Small Business Economics 5

3 It is our assessment that the dynamic capabilities per-spective has become institutionalized to a point whereresearchers aiming to contribute to or draw from this fieldexplicitly use (a variant of) the term “dynamic capabil-ities.”Given that the scope of our review is confined to thedynamic capabilities field only (and we do not attempt tocover other constructs related to strategic change unlessthey are explicitly studied from a dynamic capabilitiesviewpoint), we believe the keyword-based search is highlyappropriate for identifying our sample.


our data and relevant theoretical frameworks (Duriau,Reger, & Pfarrer, 2007; Strauss & Corbin, 1990).Whilewe concentrated on conceptually and theoreticallyrelevant items, we also included methodological sug-gestions in our coding, as explained inmoredetail later.Based on a random sample of 20 articles, we developedinitial coding sheets for classifying the current state ofknowledge and relevant suggestions for future research.As we analyzed additional articles, we continued tohone the coding schemes by collapsing, dropping, andadding categories.

With regard to first-layer coding categories, we be-gan with the fundamental building blocks of a theorysummarized byWhetten (1989): what, how, why, andwho/where/when. “What” pertains to the nature andproperties of dynamic capabilities, whereas “how”

refers to the pattern, sequence, and form of the rela-tionships between dynamic capabilities and otherdependent and independent variables of interest(i.e., consequences and antecedents). “Why” pertainsto assumptions about the underlying causal mecha-nisms that explain why dynamic capabilities are re-lated to other variables. Finally, “who/where/when”refers to certain boundary conditions under whichthe predicted relationships are most and least likelyto hold.

Beginning with this first-layer typology of “what,”“how,” “why,” and “who/where/when,” we intro-duced increasingly fine-grained second and thirdlayers by identifying reoccurring themes in the ini-tial sample of 20 articles. For example, we specified“antecedent,” “consequence,” and “dynamics” assecond-layer subclasses of the first-layer “how” cate-gory.Delvinganother layerdeeper,we foundvariablessuch as “innovation outcomes,” “external fitness,”“firm-level performance,” and “survival” to be fre-quently mentioned types of consequences, and thuswe used these concepts, along with an “other (in-cluding unspecified)” category, as third-layer sub-classes of the second-layer “consequence” category.

In addition to these theory-related issues, we ex-panded our coding scheme by including a fifth first-layer category containing “methods” issues. The twocoding sheets for the current state of knowledge and fu-ture research directions are substantively similar at thefirst and second layer. Appendices A and B present anoverviewof theemergentcodingschemes for thecurrentstate of knowledge and future research directions.

The first two coauthors independently coded a sub-sample of 39 randomly selected articles (see AppendixC fora listof thesearticles).Basedon thisdoublecoding,we found the agreement at the third-layer level to be 93percent, indicating strong reliability. We reconciled

disagreements in our initial independent codingthrough discussion and established mutually agreed-upon definitions of the first-, second-, and third-layerconcepts. The remaining articles in our sample wereapproximately equallydividedbetween the twocoders.

THE CURRENT STATE OF DYNAMICCAPABILITIES RESEARCH

Informedby the content analysis of the 298 articlesin our sample, our article speaks to both the currentstate of knowledge and important avenues for futureresearch on dynamic capabilities. We start by syn-thesizing the current state of knowledge beforeturning to future research directions. Table 2 listsconcepts that emerged in our coding of the currentstate of knowledge, provides brief explanations andexamples of articles that have employed the con-cepts, and reports frequencies (number and per-centage of articles) for each of the individualconcepts identified in our coding.

As shown in Table 2 and explained later, our anal-ysis reveals that dynamic capabilities research hascovered a variety of areas: definition of the construct;theoretical assumptions underlying dynamic capabil-ities; theoretical integration of dynamic capabilitiesand other theoretical lenses; dimensions according towhich dynamic capabilities are characterized; ante-cedents to thecreationanduseofdynamiccapabilities;consequences (outcomes) of the utilization of dynamiccapabilities; mechanisms (mediators) through whichdynamic capabilities affect outcomes; moderators ofthe relationship between dynamic capabilities andoutcomes; dynamics with respect to the impact of dy-namic capabilities on outcomes and the developmentof these capabilities over time; andmethods.We beginwith a discussion of the theoretical aspects on whichthe literature has focused in recent years. Then weformulate an organizing framework for understandingdynamic capabilities that encompasses the anteced-ents, dimensions, consequences, mechanisms, andmoderators identified in the literature to date. Weconcludeour analysis of thecurrent state of knowledgewith a discussion of the dynamics involved and anexaminationof themethodsusedinstudiesofdynamiccapabilities.

Theoretical Foundations

Definitions. Our findings make it clear that re-searchers have devoted significant attention toaddressingearlier criticismsof thedynamiccapabilitiesperspective on multiple fronts. First, Table 2 shows an


TABLE 2Overview of the Current State in Dynamic Capabilities Research

Concept ExplanationExamples from Our

Article SampleFrequency

(Percentage)a

Dynamic capabilitiesdefinitions

Ways in which dynamic capabilities have beenconceptualized

Teece et al. (1997: 516) “We define dynamic capabilities as the firm’sability to integrate, build, and reconfigureinternal and external competences to addressrapidly changing environments. Dynamiccapabilities thus reflect an organization’s abilityto achieve new and innovative forms ofcompetitive advantage given path dependenciesand market positions (. . .).”

Døving and Gooderham (2008),Witcher and Chau (2012)

111 (37.3%)

Eisenhardt and Martin(2000: 1107)

“The firm’s processes that useresources—specifically the processes tointegrate, reconfigure, gain and releaseresources—to match and even create marketchange. Dynamic capabilities thus are theorganizational and strategic routines by whichfirms achieve new resource configurations asmarkets emerge, collide, split, evolve, and die.”

Butler andMurphy (2008), Sarkis,Gonzalez-Torre, and Adenso-Diaz (2010)

59 (19.8%)

Helfat et al. (2007: 1) “A dynamic capability is the capacity of anorganization to purposefully create, extend, ormodify its resource base.”

Anand et al. (2010), Maatman,Bondarouk, and Looise (2010)

49 (16.4%)

Zollo and Winter(2002: 340)

“A dynamic capability is a learned and stablepattern of collective activity through which theorganization systematically generates andmodifies its operating routines in pursuit ofimproved effectiveness.”

Arend (2014), Dobrzykowski,McFadden, and Vonderembse(2016), Romme, Zollo, andBerends (2010)

23 (7.7%)

Teece (2007: 1319) “These capabilities can be harnessed tocontinuously create, extend, upgrade, protect,and keep relevant the enterprise’s unique assetbase.”

Desyllas and Sako (2013), Zhenget al. (2011)

34 (11.4%)

Winter (2003: 991) “Defining ordinary or ‘zero-level’ capabilities asthose that permit a firm to ‘make a living’ in theshort term, one can define dynamic capabilitiesas those that operate to extend, modify or createordinary capabilities.”

Athreye, Kale, and Ramani(2009), Rahmandad (2012)

17 (5.7%)

Other definition A definition based on a reference not listedpreviously (e.g., Adner & Helfat, 2003; Barreto,2010).

Gabler, Richey, and Rapp (2015),Sirmon and Hitt (2009)

53 (17.8%)

Theoreticalassumptions

Taken-for-granted facts or assertions

Bounded rationality Degree to which individuals’ decisions are limitedby the tractability of the decision problem, thecognitive limitations of their minds, and the timeavailable to make the decision

Augier and Teece (2009),MacLean et al. (2015)

7 (2.4%)

Managerial agency Role of, and degree of heterogeneity in, managerialdecisions and quality

Di Stefano et al. (2014), Helfat andPeteraf (2015)

9 (3.0%)

Heterogeneity ofdynamiccapabilities

Degree to which dynamic capabilities are firmspecific versus have commonalities across firmsin terms of key features (“best practices”)

Barreto (2010), Kleinbaum andStuart (2014)

11 (3.7%)

Theoreticalintegration

Combination of dynamic capabilities perspectivewith other theories

Resource-basedview of the firm

A theory focusing on how certain characteristics ofresources can give the firm a competitiveadvantage

Kim and Mahoney (2010),Morgan, Vorhies, and Mason(2009)

12 (4.0%)


TABLE 2(Continued)



(Percentage)a

Organizationallearning theory

A theory focusing on the processes through whichknowledge is absorbed, processed, and retained

Denford (2013), Di Stefano et al.(2010)

13 (4.4%)

Evolutionaryeconomics

A theory focusing on firm and industry dynamics,changing structures, and disequilibriumprocesses

Augier and Teece (2008),Fueglistaller and Schrettle(2010), Primc and Cater (2016)

8 (2.7%)

Transaction costeconomics

A theory focusing on the costs of markettransactions and the influence on make-or-buydecisions, firm boundaries, and governanceissues

Augier and Teece (2009),Nickerson et al. (2012)

6 (2.0%)

Dynamiccapabilitiesdimensionalization

Ways in which dynamic capabilities can becharacterized and typologies constructed

Procedural Typologies differentiating between processes thatunderlie dynamic capabilities

Coordinating/learning/reconfiguringPierce (2009)

159 (53.4%)

Sensing/seizing/transformingMartin (2011)

Routinization Typologies differentiating between more and less-routinized processes and heuristics

Peteraf et al. (2013), Salvato(2009)

38 (12.8%)

Functional Typologies differentiating between differentfunctional domains/activities in a firm

AlliancingSchilke (2014a)

188 (63.1%)

New product developmentDanneels (2008)

Mergers & acquisitionsBingham et al. (2015)

InternationalizationBinghamandEisenhardt (2011)

Hierarchical Typologies based on the idea that each capability isnestedwithin a higher-order capability; e.g., first-order dynamic capabilities reconfigure theorganizational resource base, second-orderdynamic capabilities reconfigure first-orderdynamic capabilities, and so on

Heimeriks et al. (2012),Robertson, Casali, andJacobson (2012)

38 (12.8%)

By unit of analysis Typologies based on different analytical levels;dynamic capabilities associated with individualmanagers, teams, organizational units, firms, orfirm networks (e.g., supply chains)

IndividualAdner and Helfat (2003),Sirmon and Hitt (2009)

233 (78.2%)

GroupFriedman et al. (2016),Hodgkinson and Healey (2011)

FirmCoen and Maritan (2011),Rahmandad (2012)

Beyond firm boundariesDyer and Nobeoka (2000), Kim,Cavusgil, and Cavusgil (2013)

Antecedents Drivers/sources of dynamic capabilitiesExperience Direct contact with or observation of facts or events Chen et al. (2012), Schilke and

Goerzen (2010)28 (9.4%)

Organizationalstructure

Way in which activities (such as task allocation,coordination, and supervision) are orchestratedtoward the achievement of organizational aims

Eisenhardt et al. (2010), Felin andPowell (2016), Schilke andGoerzen (2010)

28 (9.4%)

Organizational culture Collective values, beliefs, and principles oforganizational members

Anand et al. (2009), Bock et al.(2012), Song, Lee, and Khanna(2016)

19 (6.4%)


TABLE 2(Continued)



(Percentage)a

Resources Valuable tangible or intangible assets or supplies atthe firm’s disposal

CapronandMitchell (2009), Salgeand Vera (2013)

43 (14.4%)

Informationtechnology

Application of computers and the Internet to store,study, retrieve, transmit, and manipulate data

Macher and Mowery (2009),Pavlou and El Sawy (2010)

12 (4.0%)

Human capital Employees’ skill sets Hsu andWang (2012), Kale (2010) 14 (4.7%)Leadership Group of individuals who guide a firm (e.g., the top

management team or the CEO)Day and Schoemaker (2016), Kor

andMesko (2013), Rindova andKotha (2001)

16 (5.4%)

Managerialcognition

Managers’mental representations and action orprocess of acquiring knowledge andunderstanding

Dunning and Lundan (2010),Leiblein (2011)

16 (5.4%)

External environment External surroundingsor conditions inwhicha firmoperates

Fawcett et al. (2011), Killen et al.(2012)

18 (6.0%)

Inter-organizationalstructure

Pattern of relationships through which firms areconnected to each other

Jansen et al. (2005), Roberts andGrover (2012)

6 (2.0%)

Consequences Outcomes of dynamic capabilitiesFirm-levelperformance

Financial or competitive firm accomplishments(such as accounting profitability or competitiveadvantage)

Desyllas and Sako (2013),Shamsie, Martin, and Miller(2009), Teece and Leih (2016)

113 (37.9%)

Domain-/process-specific performance

Specific accomplishments within a particulardomain or process (such as acquisitionintegration, product quality, and supply chainmanagement)

Acquisition performanceZollo and Singh (2004)

22 (7.4%)

Product quality performanceSu et al. (2014)

Supply chain performanceGolgeci and Ponomarov (2013)

Resource developmentperformanceStadler et al. (2013)

External fitness Degree to which the firm, its resources, or itsactivities are favored by the selectionenvironment

Helfat and Peteraf (2009),Lichtenthaler andLichtenthaler (2009)

14 (4.7%)

Survival Continued existence of the firm Dixon et al. (2014), Rosenbloom(2000)

8 (2.7%)

Growth Process of increase in size of key measures, such asannual revenues or number of employees

Filatotchev and Piesse (2009),Nickerson et al. (2012)

9 (3.0%)

Flexibility Ability of the firm to accommodate major changes Vanpoucke et al. (2014),Wilhelm,Schlomer, and Maurer (2015)

9 (3.0%)

Innovationoutcomes

Results of processes of innovating, such as newproduct introductions, patents, etc.

Karim (2009), Mitchell andSkrzypacz (2015)

41 (13.8%)

Resource base change Alterations to the portfolio of resources Ambrosini et al. (2009), Helfatand Martin (2015)

17 (5.7%)

Learning Acquisition of knowledge or skills Agarwal et al. (2004), Easterby-Smith and Prieto (2008)

9 (3.0%)

Mechanisms Intermediate variables through which anindependentvariable causally affects anoutcome(here: through which dynamic capabilitiesinfluence consequences)

Resource base Portfolio of firm resources and capabilities Fainshmidt et al. (2016), Karimiand Walter (2015), Protogerouet al. (2012)

11 (3.7%)

Moderators Third variables that affect the strength of therelationship between dynamic capabilities andconsequences


increasing convergence among definitions of the dy-namic capabilities construct. Whereas more than one-third of the articles that we analyzed refer to Teeceet al.’s (1997) original conceptualization and about 20percent refer to thedefinitionofEisenhardt andMartin(2000), themore recent integrative definition byHelfat

et al. (2007) has seen increasing popularity, with 16percent of articles referring to it.4

TABLE 2(Continued)



(Percentage)a

Organizational size Largeness of the organization (often determined bythe number of its members or the scale of itsassets)

Arend (2015), O’Reilly et al.(2009)

6 (2.0%)

Organizationalstructure

Way in which activities (such as task allocation,coordination, and supervision) are orchestratedtoward the achievement of organizational aims

Fang and Zou (2009), Wilden,Gudergan, Nielsen, and Lings(2013)

3 (1.0%)

Organizational culture Collective values, beliefs, and principles oforganizational members

O’Connor (2008), Roberts,Campbell, and Vijayasarathy(2016), Slater et al. (2014)

5 (1.7%)

Strategy Sum of the actions a firm intends to take to achievelong-term goals

Carpenter et al. (2001), Engelenet al. (2014)

7 (2.4%)

Interorganizationalstructure

Pattern of relationships through which firms areconnected to each other

Ambrosini andBowman (2009),Subramaniamand Youndt(2005)

4 (1.3%)

Other organizationalcapabilities

Organizational capabilities other than the focaldynamic capability under investigation

Second-order dynamiccapabilitiesSchilke (2014b)

18 (6.0%)

Idiosyncratic resourcesTeece (2014)

Industry sector The field in which the firm conducts business Pandza and Thorpe (2009),Piening (2013)

4 (1.3%)

Geographic area The region or country in which the firm is located Brouthers et al. (2008), Parenteet al. (2011)

6 (1.0 %)

Environmentaldynamism

The rate and unpredictability of environmentalchange

El Sawy, Malhotra, Park, andPavlou (2010), Harris et al.(2009)

44 (14.8%)

Competitive intensity The intensity of rivalry among competitors in anindustry

Arrfelt, Wiseman, McNamara,and Hult (2015), Harvey,Skelcher, Spencer, Jas, andWalshe (2010)

5 (1.7%)

Dynamics Time-dependent processesEvolution Gradual development Fischer et al. (2010), Jenkins

(2010)11 (3.7%)

Timing The points in time at which dynamic capabilitiesare developed or exert their effects

Ambrosini and Bowman (2009),Bingham et al. (2015)

2 (0.7%)

Methods Methodology employed by the articleEmpirical Large-scale survey, qualitative methods, archival

data, mixed methods, etc.Karna et al. (2016), Lee andKelley

(2008), Lee and Kang (2015)197 (66.1%)

Theoretical Narrative theory, conceptual analysis, simulationmodeling, closed form mathematical modeling,etc.

Chi and Seth (2009), Tang andLiou (2010)

101 (33.9%)

a Frequency is the total number of articles referring to or using the concept, and percentage is the frequency divided by the total number ofarticles coded (i.e., 298).

4 In our coding of definitions, we only counted a certainreference if the analyzed article explicitly referred to this ref-erence as a source for the definition of dynamic capabilities.


Helfat et al. (2007) defined dynamic capabilities as“the capacity of an organization to purposefully create,extend, or modify its resource base” (p. 1) ina practiced and patterned manner. In an extensionof this definition, Helfat and Winter (2011) notedthat dynamic capabilities also provide the capacityfor an organization to influence its external envi-ronment, as emphasized by Teece (2007). The def-inition of Helfat et al. (2007) and similar ones, suchas those by Zollo and Winter (2002), Winter (2003),and Helfat and Winter (2011), avoid the potentialtautology trap (Priem & Butler, 2001; Zollo &Winter, 2002) by not equating dynamic capabil-ities with performance and instead emphasizingtheir purpose of changing the organizational re-source base and/or the external environment. Thesedefinitions also avoid confusion regarding whetherenvironmental dynamism constitutes a definingelement of dynamic capabilities (Zahra et al., 2006);as Helfat and Winter (2011) and Schilke (2014a)stress, dynamic capabilities can also exist in rela-tively stable environments as firms expand or oth-erwise alter their business. However, as discussedlater, subsequent research has shown that environ-mental dynamism is an important antecedent todynamic capabilities, in line with Teece et al.(1997), and is a relevant contingency when exam-ining their effects.

Theoretical assumptions. Like any other theoret-ical approach, the dynamic capabilities perspectiverests on certain theoretical assumptions. Theseassumptions have sometimes been made implic-itly, but in recent years, more researchers havestarted to make them explicit and discussed theirmerits and justifications. In particular, some of thedynamic capabilities perspective’s key assump-tions that have received considerable attentionpertain to decision makers’ bounded rationality(Augier & Teece, 2009; MacLean, MacIntosh, &Seidl, 2015) and their agency in promoting strategicchange (Di Stefano et al., 2014; Helfat & Peteraf,2015), as well as the heterogeneity of dynamic ca-pabilities between organizations (Barreto, 2010;Kleinbaum & Stuart, 2014).

A particularly noteworthy contribution in thisregard is the groundwork by Augier and Teece(2008, 2009), who elaborated several of the dy-namic capabilities perspective’s assumptions vis-a-vis other theoretical approaches. For example,they clearly distance the dynamic capabilitiestradition from a strict population ecology view, inthat the former sees a clear role for managerial andorganizational agency, whereas the latter usually

considers path dependencies to be too strong fororganizations to be able to adapt (except on theperiphery). Moreover, the assumptions of the dy-namic capabilities approach are portrayed as hav-ing many similarities with those of the behavioraltheory of the firm, including the presumption ofbounded rationality, the importance of firm het-erogeneity, and a central role for learning. Augierand Teece (2008, 2009) also argue that despitecomplementarities with transaction cost econom-ics, the dynamic capabilities approach differs fromit in focusing on opportunity (rather than oppor-tunism), on new resources (rather than existingones), and on value creation (rather than valueprotection). We believe that theoretical work, suchas Augier and Teece (2008, 2009), that helps to ex-plain and clarify the theoretical assumptions ofthe dynamic capabilities paradigm has been valu-able in helping the field to further converge andclarifying the scope conditions under which theconcept is likely to provide most insight. Makingassumptions explicit also enables researchers todraw out new predictions (Cohen, 1989), thushelping to further expand the dynamic capabilitiesperspective.

Theoretical integration. From its inception, thedynamic capabilities perspective has taken a highlyintegrative approach that flexibly draws on adja-cent theories. Scholars have advocated continuingthis approach and further enriching the dynamiccapabilities perspective with other relevant theo-ries (Arend & Bromiley, 2009; Helfat & Peteraf,2009)—a call to which scholars have vigorouslyresponded. Among the theories most frequentlyemployed in recent dynamic capabilities research,theRBV, organizational learning theory, evolutionaryeconomics, and transaction cost economics aremost prominent (with 12, 13, 8, and 6 studies,respectively).

As we discussed earlier, the dynamic capabilitiesperspective originally had as one of its primary foci themodification of the firm’s asset base, so the strong the-oretical connection to the RBV in ongoing work is notsurprising. Moreover, the emphasis of dynamic capa-bilitiesonstrategicchangenecessitates insight intohoworganizations develop and integrate new resources andcapabilities, which—as Zollo and Winter (2002) madeclear—is where organizational learning theory comesin. Learning has three roles in the dynamic capabilitiesperspective, and these roles are sometimes not welldistinguished. First, as is true for all capabilities, dy-namic capabilities develop through learning, involvingdeliberate learning or learning-by-doing, or both (Zollo


&Winter, 2002). Secondly, some types of dynamic ca-pabilities are capabilities for learning; these capabilitiesenable organizations to learn, thereby facilitating orga-nizational andstrategic change.For example,SalgeandVera (2013) studied incremental learning as a dynamiccapability that facilitates firm adaptation, and Schilke(2014b) analyzed the relationship between dynamiccapabilities for “learning to learn” and dynamic capa-bilities for directly modifying the firm’s resource base.And third, to the extent that dynamic capabilities en-able organizations to learn, then learning is an outcomeof dynamic capabilities.

With respect to other theories that have significantlyinformed the dynamic capabilities perspective, evolu-tionary economics has contributed an orientation to-wardinnovation,aswellasanemphasisonroutinesandpathdependence (Helfat&Peteraf,2009;MacLeanetal.,2015). Approximately 16 percent of the articles in oursample refer either directly to evolutionary economics(3 percent) or to routinization (13 percent, as part of thedimensions of dynamic capabilities discussed later).One issue of ongoing contestation and debate iswhether all dynamic capabilities are necessarilyhighly routine-based—a question to which we willreturn in our discussion of howdynamic capabilitiesmay be dimensionalized. Finally, transaction costeconomics can help dynamic capabilities scholars tomore comprehensively address questions regardingfirm boundaries, although this is an area where thereis a noticeable gap in the literature, with only 3 per-cent of articles referring to this.AsArgyres andZenger(2012) argued, transaction cost and capabilitiesexplanations of firm boundaries are deeply inter-twined, and a synthesis of the two perspectives af-fords a more comprehensive understanding ofboundary decisions that encompasses both holdupand asset-complementarity considerations. Overall,we applaud continuing efforts to highlight and le-verage relevant overlaps with other theories as theseefforts have the potential to further enhance the the-oretical richness and precision of the dynamic capa-bilities approach (seeWhetten, Felin, &King, 2009 formore general thoughts regarding the merits andchallenges associated with theory borrowing).

Organizing Framework for Dynamic Capabilities

Beyond theoretical considerations involving dy-namic capabilities, researchers have significantlyimproved our understanding of the nomological net-work surrounding dynamic capabilities. Whereasknowledge of relevant facets of dynamic capabilities,as well as their antecedents and consequences, was

underdeveloped 10 years ago (Arend & Bromiley,2009; Danneels, 2008), a multitude of studies havesince made significant progress on these issues.Figure 2 integrates the various findings of the studiesin our sample into a new and comprehensive orga-nizing framework that identifies the primary in-fluenceson,characteristicsof, andoutcomesofdynamiccapabilities.BecauseFigure2 reflects research todate inan area that is still developing, some portions of theframework are necessarily incomplete. As part of thediscussion of dynamic capabilities research below, weidentify remaining gaps in the literature, which call foradditional research.

Dimensionalization. As shown in Figure 2, an in-creasing number of researchers have come to realizethat dynamic capabilities are not a unitary concept;rather, these capabilities manifest themselves invarious distinct forms (Eisenhardt & Martin, 2000;Helfat et al., 2007; Helfat & Winter, 2011). As such,scholars have developed different ways in which todimensionalize the dynamic capabilities construct.Chief among these approaches are distinctions be-tween (a) the types of processes in which dynamiccapabilities are engaged (e.g., coordinating/learning/reconfiguring—Teece et al. 1997; sensing/seizing/transforming—Teece 2007); (b) the degree of routini-zation of dynamic capabilities (e.g., contrasting rela-tively spontaneous problem-solving with highlypatterned routines—Winter, 2003); (c) the functionaldomain in which dynamic capabilities are applied(e.g., alliancing,newproductdevelopment,mergers&acquisitions—Eisenhardt & Martin, 2000); (d) thehierarchy of capabilities (zero-, first-, second-, andhigher-order capabilities—Collis, 1994); and (e) thefocal unit of analysis (individual, team, organiza-tional, and extra-organizational—Adner & Helfat,2003; Felin, Foss, Heimeriks, & Madsen, 2012).

These different approaches have contributedmuch richness and nuance to our understanding ofwhat constitutes concrete and observable dynamiccapabilities. Teece’s (2007) typology of sensing newopportunities (and threats), seizing these opportu-nities, and transforming the organization and itsstrategy as new opportunities and threats arise hasbeen used in a large percentage of the articles in oursample. According to this typology, dynamic capa-bilities are reflected in distinct organizational processesaimed at gaining a comprehensive understanding ofthe business environment and emerging opportuni-ties and threats (sensing), making strategic choicesamong investment opportunities and businessmodels (seizing), and reconfiguring theorganization’sresources, structure, and capabilities (transforming).


More than 50 percent of the articles refer to either thistypology or the Teece et al. (1997) typology of co-ordinating activities, learning, and reconfiguring theorganization.

Despite different labels, foci, and ordering, the twoorganizational process-based typologies in Teece(2007) and Teece et al. (1997) havemany similaritiesand overlaps. A comparison of the two shows thatTeece (2007) placed greater emphasis on sensing(which Teece et al. (1997)mentioned as a subprocessof reconfiguring), whereas Teece et al. (1997) de-voted more attention to coordinating (which Teece(2007) mentioned as a subprocess of transforming).Therefore, we see Teece’s (2007) discussion of or-ganizational processes as an elaboration rather than

a supersession of Teece et al.’s (1997) originaltypology.5

FIGURE 2Organizing Framework of Dynamic Capabilities

Antecedents

Moderators

Consequences

Dimensionalization

Dynamic capabilities

Mechanisms

Organizational factors

Change:

Performance:


• Organizational structure

• Organizational culture (including intraorganizational communication, external orientation)

• Resources (including capabilities)

• Resource base

• Other organizational capabilities

• Information technology

• Human captial• Leadership• Managerial cognition

• External environment (including dynamism, uncertainty, stage of evolution)

• Interorganizational structure

• Experience

Individual/team factors

• Resource-base change• Learning

• External fitness• Survival• Growth• Flexibility• Innovation outcomes

• Firm-level performance• Domain-/process- specific performance

Functional:

By unit of analysis:

Hierarchical:

Procedural:

Routinization:• Routine-/heuristics-based

• Alliancing, new product development, mergers & acquisitions, internationalization, etc.

• Zero-, first-, second-, and higher-order capabilites

• Individual, group, firm, and beyond firm boundaries

• Coordinating/learning/ reconfiguring

• Sensing/seizing/ transforming

Environmental factors• Size• Structure• Culture• Strategy• Interorganizational structure

Environmental factors• Industry sector• Geographical area• Environmental dynamism

• Competitive intensity

5 Similarly, althoughTeece et al. (1997)usedwhat at firstglance appears to be a different overarching framing withrespect to strategic opportunities than Teece (2007), thetwo articles in fact have very similar approaches. Teeceet al. (1997) framed the dynamic capabilities perspectivebroadly as one of processes-positions-paths, where a firmpursues paths (strategic opportunities) through the use ofmanagerial and organizational processes, shaped by thefirm’s positions (its existing asset base). Teece (2007) fo-cused on the goal of pursuing strategic opportunities with-out calling them paths, and then elaborated on the processesfor doing so, namely sensing, seizing, and transforming.


Another way to dimensionalize dynamic capabil-ities is by their degree of routinization (Eisenhardt &Martin, 2000), which is addressed in 13 percent ofthe articles in our sample. Teece et al. (1997) andTeece (2007) incorporated organizational routines asimportant elements of dynamic capabilities, and thisaspect of dynamic capabilities has also been em-phasized by Winter (2003) and Helfat and Winter(2011).Yet, there is also evidence that someactivitiesappear to be less routine. Nonetheless, on closer in-spection, it turns out these activities frequently haveimportant routinized aspects. For example, althoughnew product development may have nonroutine as-pects as the individuals involved explore new ideas,new product development often takes place withina stable framework of recurring (and thereforesomewhat routine) organizational processes (seeIansiti & Clark, 1994). Similarly, Teece (2007) aswellas later works such as by Augier and Teece (2008,2009) have emphasized the “entrepreneurial” andless-routinized aspect of managerial decision-making.But as Adner andHelfat (2003) argued in their originalconception of “dynamic managerial capabilities,”managerial decision-making often relies on stableunderpinnings that enable practiced and patternedbehavior (Helfat & Martin, 2015). These un-derpinnings include the managerial resources ofhuman capital, social capital, and cognition iden-tified by Adner and Helfat (2003), as well as themental processes (a subset of managerial cognition)examined byHelfat and Peteraf (2015). In summary,whereas dynamic capabilities can in many cases beassociated with routines, the specific degree ofroutinization can certainly differ between individ-ual instances of dynamic capabilities.

In addition, 63 percent of the articles use a func-tional typology to study specific functional domainsand applications within the firm. The empirical lit-erature has thus made concrete the insights ofEisenhardt and Martin (2000) and Winter (2003),who noted that dynamic capabilities pertain to spe-cific activities and the context in which they areemployed. New product development can probablybe considered the most typical and traditionalfunctional domain of dynamic capabilities sinceIansiti and Clark’s (1994) original investigation.Given that organizations can also try to access re-sources outside their current boundaries for pur-poses of strategic change, mergers and acquisitionsas well as alliances are other heavily researchedfunctional instances of dynamic capabilities. Rec-ognition of the importance of these topics has con-tributed to the diffusion of the dynamic capabilities

perspective to adjacent fields, including operationsmanagement and marketing, in which interorgani-zational relationships are frequently studied. More-over, because geographic expansion is another wayto exercise dynamic capabilities, the purposefulmanagement of organizational internationalizationis an important activity embraced by strategy andinternational business scholars alike.

Another dimension of dynamic capabilities thathas received considerable attention is their locationwithin a hierarchy of capabilities, with 13 percent ofthe articles in our sample referring to this. Collis(1994) first proposed that dynamic capabilities nestwithin a larger hierarchy of capabilities. At thebase of the hierarchy are operational capabilities, orwhat Collis (1994) termed “zero-order” capabilities,which can be modified by dynamic capabilities(termed “first-order” capabilities by Collis (1994)).These dynamic capabilities can themselves bemodified by “second-order” and even “higher-order”dynamic capabilities (Collis, 1994). Winter (2003,2008) and many other scholars have since adoptedthis terminology. Later work by Danneels (2008),however, referred to Collis’s (1994) zero-order andfirst-order capabilities instead as first-order andsecond-order capabilities, respectively, creatingsome confusion with regard to terminology. Mostsubsequent research has used the Collis/Winterterminology.

Increasingly, scholars have also recognized thatdynamic capabilities exist at different units of anal-ysis. Over three-quarters of the articles in the sampleaddressed units of analysis in one way or another,reflecting the fact that dynamic capabilities can resteither at the organizational level, the managerial/individual level, or some other level of analysis(e.g., the team level).Although researchat the level ofthe organization remains most common, there hasbeen an increasing interest in dynamic managerialcapabilities as noted previously (Adner & Helfat,2003; Helfat &Martin, 2015; Sirmon & Hitt, 2009), inline with the ongoing microfoundations movementin capabilities research more generally (Felin et al.,2012). Individual skills and cognitions have come tothe foreground (Helfat &Peteraf, 2015), the inquiry ofwhich now constitutes an important component ofthe dynamic capabilities perspective. Complement-ing the organizational and individual level, re-searchers havepointed to the importance of dynamiccapabilities of key groups, such as top managementand other executive teams (Friedman, Carmeli, &Tishler, 2016;Martin, 2011), andhave evenmade thecase that dynamic capabilities can operate beyond


firm boundaries, such as at the level of the pro-duction network (Dyer & Nobeoka, 2000) or the na-tion state (Teece, 2014). Taken together, thesedifferent foci adopted by various researchers makeclear that the dynamic capabilities perspective hascome to represent a comprehensive multi-levelparadigm.

Despite a clear trend towardmore fine-grained andconcrete approaches (such as those reviewed pre-viously), we continue to see some investigations intoa generic dynamic capabilities construct. Althoughwe believe that it clearly makes sense to talk aboutdynamic capabilities as a distinct phenomenon ona theoretical level, empirical study of such a generalconcept is problematic. As just noted, dynamic ca-pabilities differ according to their functional do-main, location in the capability hierarchy, and unitof analysis. In addition, any particular instance ofa dynamic capability is context dependent with re-spect to the setting (e.g., firm, industry, and geogra-phy) in which it develops and is employed.Empirical study of dynamic capabilities thereforerequires precision in defining and measuring spe-cific instances of dynamic capabilities. It is thenthrough theoretical induction that empirical re-searchers may generalize from their focal dimensionback to the more general level of dynamic capabil-ities while being cognizant of the fact that furtherresearch on other types of dynamic capabilities maybe needed to test the theory more conclusively.

Antecedents. Insight on where dynamic capabil-ities come from was limited for many years (Felin &Foss, 2005). However, as Figure 2 shows, recent in-vestigations have identified a number of relevantantecedents at multiple levels of analysis, includingthe organizational, individual, and environmentallevels, to elucidate factors that facilitate or hinder thedevelopment, maintenance, and usage of dynamiccapabilities.

Consistent with Teece et al.’s (1997) original pre-sentation of the dynamic capabilities perspective,existing resources—or “positions” in Teece et al.’s(1997) terminology—have received much attentionamong relevant organization-level drivers of dy-namic capabilities (43 studies). Scholars have arguedthat resource-rich firms tend to have greater capa-bility to plan, execute, andmaintain strategic change(Giudici & Reinmoeller, 2012; Helfat & Peteraf,2009). Different types of resources have been foundtobe conducive todynamic capabilities, among themfinancial resources (ElAkremi, Perrigot, &Piot-Lepetit,2015), technological resources (Anand, Oriani, &Vassolo, 2010), and slack resources (Danneels, 2008).

Despite these largely consistent findings regardingthe facilitating role of the existing resource base inthe development of dynamic capabilities, scholarsshould also be aware of the position put forth byRahmandad (2012), who suggested that resourcesand operational capabilities may function not onlyas complements to dynamic capabilities, but also assubstitutes. In particular, managers pressed to pri-oritize short-term growth may decide to build op-erational capabilities and other organizationalresources that help generate short-term returnswhile forgoing opportunities to build dynamic ca-pabilities whose effects may only materialize in thelonger term. As such, the relationship between or-ganizational resources, operational capabilities,and dynamic capabilities may bemore complicatedthan originally assumed.

In addition to organizational resources, organiza-tional experience has seen a noticeable amount of at-tention as a potential source of dynamic capabilities(28 studies). For example, as noted earlier, dynamiccapabilities develop in part through learning-by-doing, and dynamic capabilities become more pro-ficient as organizations gain experience employingthem.As summarizedbyPisano (2002),“(t)he seedsoftoday’s capabilities are sown in yesterday’s experi-ence” (p. 150). Consistent with this statement, Chen,Williams, and Agarwal (2012) argued that prior ex-perience enhances firms’ integrative capabilities forcoordination across businesses when entering newindustries, and Schilke and Goerzen (2010) founda significant relationshipbetweenallianceexperienceand alliance management capability.

In addition, a considerable number of studies haveshed light on the effects of organizational structure(28 studies, including Eisenhardt, Furr, & Bingham,2010; Felin & Powell, 2016; Schilke & Goerzen,2010), organizational culture (19 studies, includingAnand et al., 2009 Bock, Opsahl, George, & Gann,2012), and information technology (12 studies, in-cluding Macher & Mowery, 2009 Pavlou & El Sawy,2010) on dynamic capabilities.

Moving beyond the organizational level and addingmicrofoundations to the research agenda (Abell,Felin, & Foss, 2008; Felin, Foss, & Ployhart, 2015),a total of 46 studies have elucidated individual-levelfactors and their role in shaping dynamic capabilities,including human capital (Hsu & Wang, 2012; Kale,2010), leadership (Kor & Mesko, 2013; Rindova &Kotha, 2001), and managerial cognition (Dunning &Lundan, 2010; Leiblein, 2011). For example, Kale(2010) showed how scientists who were educated orhad work experience overseas helped Indian firms to


acquire R&D capabilities, and Salvato’s (2009) quali-tative study of 90 new product development pro-cesses at the Italian design firm Alessi shed light onhow mindful “microactivities” carried out by in-dividuals shaped the organization’s product devel-opment capability. Perhaps the strongest evidence ofa causal relationship between managerial dynamiccapabilities and performance emerged in an experi-ment that was conducted in a hyper-competitive en-vironment, where advantages from market structureor strategic resources were unavailable. Nonetheless,traders with superior cognitive skills—in the formof strategic intelligence—outperformed competi-tors by up to 50% (Levine, Bernard, & Nagel,forthcoming).

Finally, another24 investigations identified sourcesof dynamic capabilities outside the firm’s boundaries,in particular studying the role of features of the ex-ternal environment such as environmental dynamism(Fawcett, Wallin, Allred, Fawcett, & Magnan, 2011;Killen, Jugdev, Drouin, & Petit, 2012) and the in-terorganizational structure in which the firm is em-bedded (Jansen, Van Den Bosch, & Volberda, 2005;Roberts & Grover, 2012). These investigations high-light that firms’ efforts to build dynamic capabilitiesdonot occur in avacuumbut are substantially affectedby the broader organizational environment. Fawcett,Fawcett, Watson, and Magnan (2012), for instance,described competitive pressures in the industry asa strong motivator that led firms to develop in-terorganizational collaboration capabilities. In addi-tion, Zheng, Zhang, and Du (2011) linked networkembeddedness todynamic capabilities. Theseauthorsfound that relational embeddedness facilitatedknowledge acquisition capability and that the di-versity of network and joint problem-solving contrib-uted to knowledge combination capability.

All of these investigations show that substantialprogress has been made in elucidating under whatconditions firms are likely to possess dynamic ca-pabilities. Ahost of studies have built onTeece etal.’s(1997) framework, which emphasized prior pathsand resource positions as relevant enabling condi-tions of dynamic capabilities (also see Eisenhardt &Martin, 2000; Teece, 2007). Other studies haveextended this framework to consider a varietyof additional factors that may affect dynamiccapabilities.

Consequences. As noted earlier, a key reasonthat many management scholars have become in-terested in dynamic capabilities is their proposed in-fluence on important outcome variables. Indeed, theperformance-enhancing effect of dynamic capabilities

is often viewed as a key tenet of this literature(Fainshmidt, Pezeshkan, Lance Frazier, Nair, &Markowski, 2016; Teece, 2014). Dynamic capabil-ities are proposed to confer a competitive advantageby adding unique value to the firm through system-atic change, which may enhance operational effi-ciency and enable increased alignment with theenvironment (Di Stefano et al., 2014; Peteraf et al.,2013). In addition to providing value in these ways,dynamic capabilities can possess the other threecharacteristics of the RBV’s value-rarity-inimitability-nonsubstitutability (VRIN) framework (Ray, Barney, &Muhanna, 2004; Schilke, 2012). Not all organizationspossess them (Collis, 1996); their path dependencies,intangibility, complexity, and organizational specificitymake them hard to imitate (Gibson & Birkinshaw, 2004;Helfat & Winter, 2011), and few other means allow or-ganizations to purposefully change on a continuousbasis (Day &Wensley, 1988; Helfat et al., 2007).

Given this theoretical importance, it is not surpris-ing that numerous studies have focused on variousconsequences of dynamic capabilities. In total, 113studies have analyzed the effect of dynamic capabil-ities on firm-level performance outcomes frequentlyused in strategy research, such as competitive ad-vantage or financial performance, with most of thestudies positing and/or finding a positive effect. Ad-ditional support for thisclaimcomes frommanyof the40 studies that draw on the notion of external fitnessandexpandtheempiricalmetrics of firmperformanceto include indicators such as survival, growth, andflexibility.6

In addition to these broad firm-level outcomes,researchers have looked at more domain- orfunction-specific outcomes, including acquisitions,product quality, and supply chainperformance.Thisapproach is much in line with the recommendationsof Ray et al. (2004) to select appropriate outcomevariables that are sufficiently close to a study’s focaltype of capability. Generally, these studies show thatdynamic capabilities can enhance a variety ofdomain-specific outcomes. For example, Zollo andSingh (2004) reported a positive effect of a firm’spostacquisition integration capability on its acqui-sition performance; Su, Linderman, Schroeder, andVan de Ven (2014) suggested that a meta-learningcapability helps sustain a high level of product

6 External fitness refers to the extent of fit between thefirm and its environment. Quantitative measures of exter-nal fitness include traditional metrics of firm performancesuch as profitability as well as indicators such as survivaland growth (Helfat et al., 2007).


quality performance, whereas capabilities for sens-ing weak signals and resilience improve the consis-tency of product quality performance; and Golgeciand Ponomarov (2013) reported evidence that afirm’s innovative capability can be a key contributorto supply chain resilience.

Finally, 26 investigations have refrained fromstudying consequences in terms of performance andinsteadhave focused onorganizational change as thedependent variable, examining changes in the re-source base (Ambrosini, Bowman, & Collier, 2009;Stadler et al., 2013) and learning of various types(Agarwal, Echambadi, Franco, & Sarkar, 2004;Easterby-Smith & Prieto, 2008). As predicted bythese authors, dynamic capabilities were found tohelp firms to bring about organizational change aswell as to learn a variety of activities.

Mechanisms. Although organizational changewas often treated as the final explanandum, 11studies in our sample have explicitly modeledamulti-step causal chain, inwhich resource changesare the intermediate outcomes of dynamic capabil-ities, and these resource changes are the causalmechanisms7 through which dynamic capabilitiesaffect performance outcomes (e.g., Karimi & Walter,2015; Protogerou, Caloghirou, & Lioukas, 2012).Consistent with the theoretical positions of Eisenhardtand Martin (2000), Helfat and Peteraf (2003), Zahraet al. (2006), and Zott (2003), among others, these re-searchers have argued that dynamic capabilities’immediate purpose is to change the resource base,and that this change in the resource base, in turn,explains performance variations. According tothis argument, resource changes serve as media-tors through which dynamic capabilities affectperformance.

We believe that explicitly modeling the causalmechanisms that explain the performance effect ofdynamic capabilities is a particularly meritoriousendeavor. Interestingly, change in the resource baseis by far the most frequently studied mechanism, tothe exclusion of other potentially important media-tors. As we noted at the outset, dynamic capabilitiesmay directly alter features of the external environ-ment. Little research, however, has investigated thisor othermediators, which in turn affect performanceoutcomes. In fact, only four percent of the articles in

our sample explicitly examined possible causalmechanisms, suggesting a significant gap in the lit-erature to which we will return later.

Moderators. Another important refinement inrecent theorizing and empirical work on the conse-quences of dynamic capabilities rests on the recogni-tion that sucheffects tend tobehighly context specific.Increasingly, researchers have started to follow a con-tingent approach (Aragon-Correa&Sharma, 2003) andhave identified relevant moderators of the effects ofdynamic capabilities. The most frequently stud-ied moderator is that of environmental dynamism.Schilke (2014a), for example, finds the dynamiccapabilities–firm performance link to be the strongestunder intermediate levels of environmental dyna-mism, whereas it is comparatively weaker when dy-namism is either low (and there may be feweropportunities to amortize the cost of dynamic capa-bilities development and maintenance) or high (andenvironmental changes may be too abrupt and un-foreseeable to fully leverageplannedstrategicchange).The 44 studies that model environmental dynamismas a contingency variable alleviate criticism of someearlier research that made it a component of dynamiccapabilities or a precondition per definitionem (cf.Zahra et al., 2006). This line of work instead providessupport for the claim that although environmentaldynamism is likely to be a highly relevant conditiondetermining the extent to which dynamic capabilitiesmay affect organizational outcomes such as firm per-formance, dynamic capabilities can in principle existand help firms compete in both relatively stable andhighlydynamicenvironments (Helfat&Winter, 2011).Consistent with this logic, environmental dynamismhas now been accepted as a central contingency vari-able in dynamic capabilities theorizing.

In addition to environmental dynamism, re-searchers have also studied interactions of dynamiccapabilities with other variables, including othertypes of organizational capabilities (18 studies). Forexample, there is evidence of a negative interactioneffect between first-order dynamic capabilities (i.e.,those that change the resourcebase) and second-orderdynamic capabilities (i.e., those that change first-order dynamic capabilities), such that the two func-tion as substitutes in positively affecting performanceoutcomes (Schilke, 2014b). In other words, with in-creasing levels of second-order dynamic capabilities,the marginal effect of first-order dynamic capabilitieson performance outcomes diminishes—possibly be-causedynamiccapabilitiesonboth levelsareprimarilyemployed to attain the similar end of strategic changeand thus may exhibit some element of equifinality.

7 In this article, we use the term “mechanism” to repre-sent a variable through which an independent variablecausally affects an outcome (Imai, Tingley, & Yamamoto,2013: 7). That is, we consider “mechanism” as quasi-synonymous with “mediator” (Baron & Kenny, 1986).


Additional moderators that have received recent at-tention include organizational strategy (Carpenter,Sanders, & Gregersen, 2001; Engelen, Kube, Schmidt, &Flatten, 2014), organizational size (Arend, 2015;O’Reilly, Harreld, & Tushman, 2009), organizationalculture (O’Connor, 2008; Slater, Mohr, & Sengupta,2014), industrysector (Pandza&Thorpe,2009;Piening,2013), geographic area (Brouthers, Brouthers, &Werner, 2008; Parente, Baack, & Hahn, 2011), andinterorganizational networks (Ambrosini & Bowman,2009; Subramaniam & Youndt, 2005), among others.These studies on relevant moderators have helped toinfuse the dynamic capabilities perspective witha more contingent approach—one that explicitly con-siders that the effectiveness of dynamic capabilitiesmay depend on the specific internal and external sit-uation. Overall, we believe these studies have signifi-cantly helped to address earlier criticisms regardingthe perspective’s ill-defined boundary conditions(Arend & Bromiley, 2009).

Summary of the organizing framework. The or-ganizing framework just described provides a com-prehensive approach for understanding dynamiccapabilities that, while based in prior work, providesanewwayof framing researchon the topic.Notably, itshows that the study of dynamic capabilities has ad-vanced toapoint atwhich the literaturecomprisesnotonly conceptual research but also a great deal of em-pirical work that includes antecedents and conse-quences of dynamic capabilities, aswell asmoderatorsand mediators. Extant research has paid the most at-tention to the antecedents and consequences of dy-namic capabilities, with some attention tomoderators,and scholars are only starting to look into causalmechanisms (i.e., mediators).

In addition to providing an overview of what al-ready has been achieved, our framework also pro-vides a basis for future research, as discussed later.However, before we turn to avenues for future re-search, we briefly summarize two additional topicsthat surfaced in our analysis regarding dynamicsand research methods.

Additional Considerations

Dynamics. As reflected in the model shown inFigure 2, most of the researchers have adopteda variance-based approach to theorizing, wherebya change in one variable is associated with a changein another variable (e.g.,more experience in a certainfield produces more dynamic capabilities). How-ever, some scholars have also started to developa temporal, process-oriented approach to dynamic

capabilities theorizing (see Mohr, 1982; Van de Ven& Poole, 2005 for the general distinction betweenvariance and process theories). For example, at-tempts have been made to explain the evolution ofdynamic capabilities over time (e.g., Fischer, Gebauer,Gregory, Ren, & Fleisch, 2010; Jenkins, 2010). Thesestudies suggest that the development of dynamic ca-pabilities may proceed through a series of typicalstages, knowledge of which may prove particularlyuseful for practitioners attempting to implement suchcapabilities. Process-oriented studies have also shedlight on the role of timing. For instance, Bingham,Heimeriks, Schijven, and Gates (2015) found codifi-cation of knowledge to bemost effective in supportingthe development of dynamic capabilities when suchcodification occurs in reverse chronological order,starting with the implementation phase and workingbackward through the earlier phases, such as duediligence in the case of the acquisition capabilitiesin this study. This role of codification extends thetheoretical arguments of Zollo and Winter (2002),who emphasized the importance of codification ofknowledge in developing dynamic capabilities, byadding a temporal component to the codificationprocess.

This interest in how dynamic capabilities emerge,develop, grow, or terminate over time mirrors theincreased interest in process approaches in manage-ment more generally (Langley, Smallman, Tsoukas, &Van de Ven, 2013). We believe that studying the evo-lution of dynamic capabilities and the role of time ishighly consistent with the focus of dynamic capabil-ities on strategic change. Such change is clearly notachieved instantaneously but only over time andthrough multiple steps, and there is significant op-portunity to more carefully unpack the individualstages involved, along with their sequencing andpotentially reciprocal nature.

Research methods. Last but not least, dynamiccapabilities research has clearly progressed frombeing a mostly conceptual undertaking to becomea predominantly empirical field. Around two-thirdsof the articles in our sample report empirical find-ings, with survey and qualitative methods beingmost prominent (33 percent and 23 percent of thearticles in the full sample, respectively). We believethat this trend is encouraging as it requires re-searchers to specify empirical measures indicativeof dynamic capabilities. Moreover, initial meta-analyses of dynamic capabilities have recently star-ted to appear (Fainshmidt et al., 2016;Karna,Richter,& Riesenkampff, 2016; Pezeshkan, Fainshmidt, Nair,Lance Frazier, & Markowski, 2016). Studies like


these help to synthesize and systematically juxta-pose extant findings and add further nuance by ex-ploring sources of heterogeneous effects.

Even among recent theoretical investigations, wehave witnessed a greater diversity of approaches,ranging from traditional narrative theory develop-ment to formalmodeling (e.g., Mitchell & Skrzypacz,2015) and agent-based simulations (e.g., Coen &Maritan, 2011). Through their complementarities,these different methods and approaches hold greatpromise for the further development and refinementof the dynamic capabilities perspective.

FUTURE DIRECTIONS FOR DYNAMICCAPABILITIES RESEARCH

Although these recent insights strongly supportthe value of the dynamic capabilities perspectiveand help to flesh out central elements of the theory,additional research is needed to more fully developthe dynamic capabilities perspective.We begin witha content analysis of what prior research has identi-fied as important limitations and fruitful avenues fornew research and use this as a basis for our own as-sessment and recommendations for future researchon dynamic capabilities. In making recommenda-tions, we focus on issues that we believe wouldbenefit from additional attention above and beyondwhat has already been achieved in recent years. Wehighlight important topics that may have gone un-noticed thus far, aswell as unresolved tensions in theliterature. In addition, we flag a few areas that webelieve either do not require substantial new re-search or would benefit from reorientation.

In discussing future research directions, we followthe same structure that we adopted in the previoussection, starting with theoretical foundations, thenproceeding through the individual parts of theorganizing framework for dynamic capabilities,and finally turning to additional considerations ofdynamics and methods. In each subsection, we startwith a brief summary of the content-analytic resultsregarding potential research directions noted inprior work, listing those issues that have been men-tioned particularly frequently as warranting furtherstudy. This is followed in each subsection by ourmore subjective assessment, along with our recom-mendations that go beyond those mentioned in ear-lier articles.

Of the 298 articles that we content analyzed, 220(i.e., 74 percent) reported at least one limitation ordirection for future research. Issues related to mod-eratorsweremost frequent (109 articles), followedby

suggestions regarding the consequences (96 articles)and the antecedents (80 articles) of dynamic capa-bilities. Table 3 provides an overview of frequenciesalong with selected illustrative quotes.

Before elaborating on the various suggestions thathave been made in prior research, it is worth notingthat several of the limitations and recommendedavenues for future research that we identified in oursample have already been addressed, at least to someextent, in subsequent research. Indeed, we weresurprised by the degree to which dynamic capabil-ities scholars have seemed to agree on promisingdirections for new research and then have followedup on the potential gaps identified by previous re-search. This indicates that the dynamic capabilitiesfield has come a long way in a short period of time,evolving into a coherent research program charac-terized by cumulative progress. Nevertheless, moreprogress is warranted, as we discuss later.

Theoretical Foundations

Definitions. As noted earlier, we observed con-siderable convergence in the definition of dynamiccapabilities, even if 15 articles in our sample suggestthat consensus on a single definition has not beenachieved.Although there is not one single definition,the threemost used definitions of Teece et al. (1997),Eisenhardt andMartin (2000), andHelfat et al. (2007)are complementary and build on one another. Theother frequently used definitions are highly consis-tent with these three. In addition, definitions such asthat ofHelfat et al. (2007) have clarified that dynamiccapabilities do not involve a tautology with respectto performance, and Helfat and Winter (2011) haveincorporated the potential to influence the externalenvironment in their definition. In our view, becausethese definitions have built on one another toachieve considerable clarity, converging on a singlegeneral definition is not a high priority. However,whichever reference a researcher uses, we find itcritically important to explicitly state a concretedefinition of dynamic capabilities so as to avoidambiguity. In addition, subcategories of dynamiccapabilities certainly require precise definitions inlinewith preexisting general definitions, such as thatwhich Adner and Helfat (2003) provided for dy-namic managerial capabilities in line with the gen-eral definition of dynamic capabilities in Teece et al.(1997).

In addition to using an explicit definition of dy-namic capabilities, we believe it is important forauthors to provide a clear elaboration of why an


TABLE 3Illustrative Evidence for Suggested Limitations and Future Research Recommendations

Concept Illustrative statementsFrequency

(percentage)a

Theoretical foundationsDefinition “Despite its importance for firmprosperity and the scholarly attentiondevoted

to it, dynamic capability remains underspecified (. . .). In particular, the‘competence to add competences’ has not been systematicallyconceptualized (. . .).” (Danneels, 2008: 519)[Clarity of definition]

15 (5.0%)

“In spite of the consensus that dynamic capabilities play a crucial role incompetitive advantage, complete consensus in defining the term has notbeen achieved.” (Argote & Ren, 2012: 1375)[Convergence of definitions]

Theoretical assumption “More generally, particular attention should be given to the assumptionsunderlying dynamic capabilities’ theoretical underpinnings, namely, theassumptions aboutmanagerial rationality. Perhaps some choices need to bemade between a more bounded rationality-oriented approach, in line withevolutionary economics, and a more full rationality-oriented approach, assuggested by the RBV.” (Barreto, 2010:277)

14 (4.7%)

“Examining the assumptions about individuals’ rationality (. . .) is important.”(Capron & Mitchell, 2009: 309)[Bounded rationality]

“The dynamic capabilities framework invites further research into (. . .) therole of managers and leaders in enterprise performance.” (Augier & Teece,2009: 418)[Managerial agency]

Theory integration “The current literature tends not to distinguish between incremental dynamiccapabilities and renewing dynamic capabilities. (. . .) there is value inconceptually developing the paper, for example by extending it further intothe learning (. . .) literature.” (Ambrosini et al., 2009: S21)[Organizational learning]

21 (7.1%)

“Thus, we also recommend that the DCV draw more deeply on the sizable,more-established ENT literature for added insights (. . .).” (Arend, 2014: 49)[Entrepreneurship]

“Taken together, these insights underpin the need for resource-based theoriststo broaden their scope and embrace other perspectives (e.g., institutionaltheory, social cognition approaches) tomore fully understandhowdynamiccapabilities and resources develop.” (Schilke, 2014b: 376)[Other]

Organizing framework for dynamic capabilitiesDimensionalization-underlyingprocesses

“Future research is encouraged to explore (. . .) knowledge acquisitioncapability, integration capability and coordination capability.” (Chang, Bai,& Li, 2015: 27)[Coordinating/learning/reconfiguring]

27 (9.1%)

“For example, future empirical work could be directed towards theenrichment of this study’s framework with additional dimensions focusingon the entrepreneurial function embedded in dynamic capabilities i.e.managerial capabilities for sensing and seizing opportunities.” (Protogerouet al., 2012: 641)[Sensing/seizing/transforming]

“Dynamic capabilities theory explains when organizations need flexibleprocesses, but it is less forthcoming on how those processes work.” (Harriset al., 2009: 402–403)[Other]

Dimensionalization-routinization

“Future (possibly qualitative) research should take up the challenge ofinvestigating the interplay between highly routinized and ad hoc resourcereconfiguration in greater detail.” (Schilke, 2014a: 199)

8 (2.7%)


TABLE 3(Continued)


(percentage)a

“(. . .) we believe future work can gain considerably deeper insight into theinterplay between routinization and ad hoc problem solving.” (Heimerikset al., 2012: 721)

Dimensionalization-functional domain

“Additional studies could expand the focus of our analysis to include inter-firm integration (. . .).” (Vanpoucke et al., 2014: 459)[Alliancing]

67 (22.5%)

“Moreover, an extension of this thinking could further address whether themodel of radical innovation capability suggested here needs to be modified(. . .).” (Slater et al., 2014: 563–564)[New product development]

“Other organizational capabilities, such as stakeholder integration andcontinuous operations improvement, may be included in the study toexplore environmental management capabilities (. . .).” (Wong, 2013: 131)[Other]

Dimensionalization-capabilitieshierarchy

“(. . .) three levels of dynamic capability could be researched empirically tofind evidence to give them greater depth and allow for more understandingof the concepts.” (Ambrosini et al., 2009: S21)

14 (4.7%)

“Further, it would be interesting to investigate the effects ofwidely usedmeta-routines (. . .) on dynamic capabilities.” (Pentland, Feldman, Becker, & Liu,2012: 1504)

Dimensionalization-unit of analysis

“Embracing a multilevel perspective, future research could also considerindividual-level constructs (such as characteristics of the managersinvolved in strategic alliances).” (Schilke & Goerzen, 2010: 1213)

42 (14.1%)

“Future researchwouldbenefit fromexaminingmoreprecisely the interactionof individual characteristics of key players and the tools and practices theyuse to achieve innovation and firm growth.” (Uhlaner, van Stel, Duplat, &Zhou, 2013: 605)[Individual]

“We also know relatively little about how the interaction of cognitivecapabilitiesof individuals in the topmanagement teamaffects teamdecisionmaking, (. . .) Future research could investigate whether diversity ofmanagerial cognitive capabilities within a team helps or hinders strategicchange.” (Helfat & Peteraf, 2015: 846)[Group]

“New theory may arise that relates activities outside the organization’sboundaries to dynamic capabilities (. . .) of the organization.

Ultimately, a dynamic theory of firm boundaries may emerge from suchinquiry.” (McGahan, 2012: 16)[Beyond firm boundary]

Dimensionalization-otherdimensionalizationapproach

“(. . .) work that conceives metacognition, emotion management, and self-regulationas coredynamicmanagerial capabilities.” (Hodgkinson&Healey,2011: 1511)[Cognitive subdimensions]

6 (2.0%)

“Using other, more detailed relationship phase models would result indifferent NC components.” (Mitrega et al., 2012: 749)[Temporal phases]

Antecedents “(. . .) future research can theoretically extend our model by identifyingcountry, industry (. . .) variables that are antecedent to the dynamiccapability development mechanisms identified in our model.” (Malik &Kotabe, 2009: 444)

80 (26.9%)

“Other factors that may also drive or constrain capital misallocation include(. . .) external factors such as market dynamics and pressures frominvestors.” (Arrfelt et al., 2015: 1032)[External environment]

“Further investigation can improve the understanding of factors that affectdynamic capabilities (. . .) such as (. . .) organizational culture (. . .).” (Cheng,Chen, & Huang, 2014: 183)[Organizational culture]


TABLE 3(Continued)


(percentage)a

“Second, given the value-creating potential of marketing capabilities revealedin our study, it is important to know how such capabilities are developed.”(Morgan et al., 2009: 917)[Other]

Consequences “Given the rising competitive pressure accompanying globalization and rapidtechnological advancement, assessing the influence of a dynamiccollaborative capability on firm competitiveness is timely.” (Allred et al.,2011: 130)[Firm-level performance]

96 (32.2%)

“However, more research is needed to explore the long-term effects (. . .) onproject and firm level innovation outcomes.” (Im et al., 2013: 182)[Innovation outcomes]

“Further research on this line could analyze the effect of this capability onfirms’ ability to overcome technological gaps.” (J. Anand et al., 2010: 1228)

“Moreover, we did not examine the costs of the process, (. . .), we encourageadditional studies in management control on the costs of dynamiccapabilities.” (Donada, Nogatchewsky, & Pezet, 2016: 112)[Other]

Mechanisms “For instance, it is possible that dynamic capabilities influence performancethrough specific organizational capabilities (. . .) or top management teamcompetencies (. . .). Future research may benefit from incorporating suchmediating mechanisms into a model of the dynamic capabilities-performance relationship.” (Wilden et al., 2013: 89)[Resource base]

28 (9.4%)

“(. . .) an examination of additional potential mediating mechanisms (i.e.,intermediate outcomes) between higher-order dynamic capabilities andperformance would likely enhance our understanding of the consequencesof dynamic capabilities.” (Fainshmidt et al., 2016: 1369)

“Moreover, we need deeper insight into the variety of mechanisms thatunderlie the performance effects of capabilities.” (Schilke, 2014a: 199)

“(. . .) althoughMDCshave been found to positively affect IJV performance andcompetitive advantage, the specific mechanism through which such aneffect takes place is left to be investigate.” (Fang & Zou, 2009: 757)[Other]

Moderators-organizationalcharacteristics

“Further specifying and explaining contingencies such as organization type orstructuremaybe an interesting avenue for future research.” (Fourne, Jansen,& Mom, 2014: 30)[Structure]

73 (24.5%)

“(. . .) it would be useful to determine how dynamic capability can reconfigurethe existing “ordinary” resource base to render it suitable to drive theEO–performance relationship. (. . .) the research on the interaction of“ordinary” and dynamic capabilities is still in its infancy.” (Engelen et al.,2014: 1364)[Other capabilities]

“The resource allocation process in smaller, entrepreneurial firms is likely todiffer from the process in larger firms. Small firms may not have wellestablished resource allocation practices and procedures in place.” (Coen &Maritan, 2011: 114)[Size]

Moderators-setting

“Indeed,wehope that this researchwill trigger further research into the natureand value of incremental learning capabilities in the public sector andbeyond.” (Salge & Vera, 2013: 170)[Industry sector]

73 (24.5%)

“The data also come mainly from European respondents. Although our testssupported the findings in other regions, further research could look intopossible geographical differences.” (Vanpoucke et al., 2014: 459)[Geographic area]


TABLE 3(Continued)


(percentage)a

“Finally, future research could also explore the temporal pacing by whichdynamic capabilities affect operating-routine performance under varyinglevels of environmental dynamismor the occurrence of exogenous shocks.”(Wilhelm et al., 2015: 342)[Environmental dynamism]

“On the empirical front, the clear implication of ourwork is that scholars needto take into account the relevant contingencies in their investigation beforethey can predict and test for particular outcomes of dynamic capabilities.”(Peteraf et al., 2013: 1407)[Other]

Additional considerationsDynamics “Further research needs to consider howproject capabilities evolve, grow and

ultimately decline during a life cycle from birth to maturity.” (Davies &Brady, 2016: 322)

21 (7.1%)

“How does managerial IS use at different levels in the organization influencethe evolution of organizational capabilities?” (Roberts et al., 2016: 65)[Evolution]

“A future longitudinal study would be desirable to complement this researchstudy by revealing the evolution of the associations between thedimensionsof EII, corporate environmental innovativeness and adaptability, andbusiness and environmental performance.” (Wong, 2013: 131)[Timing of effects]

“Such studies may also be able to shed light on the question of whether theperformance effects of dynamic capabilities at various levels are morepronounced in the short or long term.” (Schilke, 2014b: 376)[Unstable theoretical effect]

“The emphasis of TPS (. . .) is on complex routines and organizationalmechanisms. The emphasis of EM (. . .) is on simple routines andmanagerialmechanisms. Both levels of analysis and both types of mechanisms areimportant and both at work within the firm, either sequentially orsimultaneously. (. . .) Really understanding dynamic capabilities requiresseeing the complete picture and exploring interlinked dynamic bundles asa whole.” (Peteraf et al., 2013: 1407)[Other]

Methods-internal validity

“(. . .) we believe our field’s understanding of the temporal processes behindcapability development could benefit greatly from longitudinal work thateither uses quantitative panel data or is based on an inductive, theory-building approach (or, perhaps, both).” (Heimeriks et al., 2012: 721)[Issues with causality]

71 (23.8%)

“Sixth, we did not control for the level of mode-specific experience each firmhad. It is possible that mode experience may also provide some type ofresource-based advantage. Future research may wish to explore this idea.”(Brouthers et al., 2008: 214)[Issues with omitted variables]

Methods-external validity

“We conclude that the findings reported here support this basic hypothesis,although specific findingsmaynot be readily generalized to other industriesand to larger firms. (. . .) Future researchmight extend our approach to otherprofessional service industries, andpossibly toother sectors and larger firmsas well.” (Døving & Gooderham, 2008: 855)[Issues with generalizability]

99 (33.2%)

“At the same time,we acknowledge the limitations of the low response rate forthe APICS data.” (Wu, Melnyk, & Flynn, 2010: 745)[Issues with (survey) response]

Methods-construct validity

“(. . .) our measures of capital allocation competency may be too stringent indefining over and underinvestment, thus limiting the number of recordedallocation errors in our study.” (Arrfelt et al., 2015: 1032)[Issues with operationalization of construct]

78 (26.2%)


article’s focal construct can be considered an in-stance of dynamic capability. Not every form ofchange is evidence of a dynamic capability. More-over, because dynamic capabilities (like all capabil-ities) are context dependent, instances of dynamiccapabilities pertain to a particular activity and set-ting (see our discussion above). For this reason, inempirical work, we believe it is imperative to zoomin on a particular instance of dynamic capabilities(e.g., associated with a specific functional activity).When authors of empirical analyses explain howtheir object of study is consistent with the core fea-tures of dynamic capabilities, such as supportingpatterned behavior directed toward strategic change,this helps to generalize their findings to the broaderand more abstract level of dynamic capabilities the-ory. Conversely, a lack of fit between the object ofstudy and the definition of dynamic capabilities se-verely limits the extent to which a research study canadvance understanding of dynamic capabilities.

Theoretical assumptions. Given the mix of eco-nomic and behavioral theories that provide thefoundations of the dynamic capabilities perspective(Arend & Bromiley, 2009; Peteraf et al., 2013), webelieve that the perspective will gain additionaltheoretical depth fromefforts to further elaborate anddevelop its theoretical assumptions—a point madeby 14 articles in our sample. One area that we wouldlike to single out for further elaboration concerns thestance on managers’ rationality (also see Barreto,

2010; Capron & Mitchell, 2009). Although consid-erable headway has been made (Augier & Teece,2008; Augier & Teece, 2009), from our perspective,the extent towhichmanagers are boundedly rationalandunderwhat particular circumstances they canbeexpected to deviate from full rationality would ben-efit from greater explanation (an issue we will comeback to later).

Future research would in our view also benefitfrom greater elaboration of agency in the dynamiccapabilities framework, following up on recent in-vestigations into this matter (Augier & Teece, 2009;Es-Sajjade & Pandza, 2012; Helfat & Martin, 2015;Helfat & Peteraf, 2015; Salvato, 2009). For example,under what conditions are managers able to signifi-cantly alter their own and their organizations’(change) routines? What is the role of employees atdifferent levels in the organizational hierarchy forstrategic change? More broadly, when and how canorganizations overcome the paradox of embeddedagency and be able to envision and affect change intheir external environment, despite environmentalpressures that structure their cognitions, define theirinterests, and influence their identities? Questionslike these should provide plenty of fodder for futurestudies on the theoretical foundations of the dy-namic capabilities perspective.

Theoretical integration. One of the features thatmakes the dynamic capabilities framework highlyapproachable for scholars with diverse backgrounds

TABLE 3(Continued)


(percentage)a

“(. . .) we rely on subjective staff perceptions of the three incremental learningroutines. (. . .) Future research might thus wish to collect objective ratherthan subjective data to capture the constitutive routines of incrementallearning.” (Salge & Vera, 2013: 170)[Issues with data source]

Methods-statisticalconclusion validity

“It would also be valuable for further research to use different empiricalmethods to capture the relationship between a firm’s constraints, sourcingmodes, and ultimate performance.” (Capron & Mitchell, 2009: 309)[Issues with analysis method]

79 (26.5%)

“Unfortunately, collecting longitudinal data on constructs that cannot readilybe assessed from archival sources, such as second-order competences ororganizational culture, poses tremendous data collection challenges. (. . .)This relatively small sample size limited the inferences from thelongitudinal analysis.” (Danneels, 2008: 537–538)[Issues with sample size]

a Frequency is the total number of articles referring to or using the concept, and percentage is the frequency divided by the total number ofarticles coded (298).


is its openness and flexibility in integrating relevantideas from other theoretical streams.We believe thatfollowing this trajectory and constructively bringingin other perspectives is important to further developthe dynamic capabilities framework and advanceour current understanding of purposeful strategicchange, as 21 articles in our sample emphasize. Forexample, in our content analysis of future researchdirections, we observed a high frequency of articlessuggesting stronger integration of the dynamic ca-pabilities perspective with the broader entrepre-neurship literature (Augier & Teece, 2009; MacLeanet al., 2015). Moreover, building on the early work ofZollo andWinter (2002), the organizational learningliterature has been identified as another candidatefor further enriching the dynamic capabilities per-spective (Ambrosini & Bowman, 2009; Easterby-Smith & Prieto, 2008). Although recent research hasmade headway on this, such as in the theoreticalimplications drawn by Bingham et al. (2015) in theirstudy of concurrent learning, it is our belief that thisarea merits additional investigation.

At the same time, we think that other theoreticalstreams, beyond those identified in our contentanalysis of future directions, offer relevant insightsthat have been underused in dynamic capabilitiesresearch. These literatures include those on in-stitutional theory, heuristics and biases, the behav-ioral theory of the firm and closely related butunderused areas of evolutionary economics, andtransaction cost economics.

Institutional theory shares with the dynamic ca-pabilities perspective a strong emphasis on habit-ualized action (Greenwood, Oliver, Sahlin, &Suddaby, 2008); the concept of organizational rou-tines resonates strongly with the idea of institu-tionalization, whereby specific cognitions andactions become objectified and ultimately exteriorto the individual (Tolbert & Zucker, 1996). Moreover,both literatures have at their center an interest in howorganizations navigate the interface with their envi-ronment. As a result, we see significant potential forgreater cross-fertilization between them.

Specifically, we can envision at least three con-crete ways in which institutional theory may enrichdynamic capabilities scholarship. First, whereasboth literatures are fundamentally concerned withthe organization–environment interaction, dynamiccapabilities scholars have viewed organizational ad-aptation to the external environment as mostly bene-ficial, focusing on strategic fit. Institutional theorists,on the other hand, have studied conformity witha more critical stance, emphasizing that adherence

to environmental institutions can also come withimportant disadvantages, such as a decrease intechnical efficacy or a weakening of differentiation-based competitive advantage (Heugens & Lander,2009; Meyer & Rowan, 1977). We believe dynamiccapabilities scholars would be well advised toconsider whether resisting environmental confor-mity pressures may be a sensible option for someorganizations (Oliver, 1991; Schilke, forthcoming).Second, in studying the organizational environ-ment, dynamic capabilities scholars have for themost part focused on issues related to technology orcustomer demand. Although these are highly rele-vant aspects of the environment, we propose thatthe understanding of the organizational environ-ment developed by institutionalists could provehighly informative for dynamic capabilities theo-rizing. Building on the seminal work by DiMaggioand Powell (1983), institutionalists have singledout mimetic, normative, and coercive pressures ascritical environmental forces imposed on organi-zations, and it would be interesting to study theextent to which different types of dynamic capa-bilities may be useful in dealing with these variousenvironmental pressures (Oliver, 1997).

Third, institutionalists have recently devotedgreat effort to better understanding embeddedagency (Battilana, 2006; Battilana & D’Aunno, 2009;Schilke, forthcoming; Suddaby, Viale, & Gendron,2016). In doing so, they have advanced the notion ofinstitutional entrepreneurship (Battilana, Leca, &Boxenbaum, 2009; Maguire, Hardy, & Lawrence,2004), whereby change agents (either organizationsor individuals) create new institutions or transformexisting ones. Initiating and implementing divergentchange is clearly also at the heart of Teece’s (2007)intriguing but underinvestigated notion of marketshaping, and we encourage dynamic capabilitiesscholars to build on these recent developments ininstitutional theory and explore ways to applythem.8

Furthermore, we support ongoing efforts to infusethe dynamic capabilities perspective with psycho-logical theory on heuristics (Bingham & Eisenhardt,

8 It is worth noting that the study of market shaping canalso be undertaken from the perspective of behavioraltheory and evolutionary economics discussed later, as or-ganizations not only search for new knowledge and capa-bilities, but also shape their environments over time (seeGavetti, Helfat, & Marengo, 2017). Thus, dynamic capa-bilities may also benefit from integrating this approach tomarket shaping.


2011; Maghzi, Gudergan, Wilden, & Lin, 2016). Thenotion of heuristics (and the related concept of sim-ple rules, per Sull & Eisenhardt, 2015) has loomedprominently in the debate about dynamic capabil-ities (Eisenhardt & Martin, 2000), but—comparedwith the routine-based approach—it has seen rela-tively less theoretical progress over the years. Withthe shift toward microfoundations, we believe thereis potential to focusmore onheuristics. It is clear thatwe need greater insight into how individuals employdynamic capabilities and come to make decisionsregarding strategic change, so as to better understandhow dynamic capabilities operate on the ground.

We believe that building on recent disciplinaryinsights can help us understand what types of heu-ristics managers draw from in employing dynamiccapabilities, when they most likely use them, andwhether doing so will be effective. Cognitive psy-chologists, such as Gigerenzer and colleagues, havesignificantly advanced the knowledge of heuristics(Artinger, Petersen, Gigerenzer, & Weibler, 2014;Gigerenzer & Gaissmaier, 2011). Regarding relevanttypes of heuristics, Gigerenzer and Todd (1999)propose three higher-order building blocks: (1)search rules that determine what information is ex-plored and in what order, (2) stopping rules thatdetermine when to stop searching for cues, and (3)decision rules that indicate how to make a decision,given the collected information. The potential ap-plicability of these building blocks to the sensing andseizing microfoundations of dynamic capabilities isapparent, but it requires further elaboration to makethe building blocks more directly applicable to thecontext of organizational decision-making (Maghziet al., 2016). Heuristics have other salient applica-tions to dynamic capabilities as well. Heuristics arecommonly applied under conditions when peoplemust make decisions under uncertainty, with in-complete information, unknown probabilities ofpotential outcomes, multiple goals, and ill-definedproblems (Gigerenzer & Gaissmaier, 2011). Thesefindings can provide a useful starting point for futureresearch to study the antecedents to heuristics-baseddeployment of dynamic capabilities.

Finally, in our view, it is important to highlight thatalthough in the management literature heuristicshave traditionally been associated with biased orfaulty decision-making, including with respect todynamic capabilities (Teece, 2007), heuristics can alsobehighlyeffective andoutcomeenhancing (Mousavi&Gigerenzer, 2014; Todd & Gigerenzer, 2007). Thequestion of whether and under what conditionsheuristics-based dynamic capabilities enhance

versus inhibit performance outcomes should pro-vide plenty of opportunity for future research.

Another relevant literature that is attracting in-creasing attention in work on dynamic capabilities—but that we believe could still benefit from additionalintegration—is related to the behavioral theory of thefirm (Augier & Teece, 2008; Winter, 2000). As notedearlier, many assumptions and intellectual founda-tions central to dynamic capabilities are rooted in thebehavioral theory of the firm (Cyert & March, 1963;Simon, 1957). According to this theory, decisionmakers are boundedly rational and satisficing; that is,they initiate search based on organizational perfor-mance relative to aspirations and slack resources.Furthermore, the behavior of firms is viewed as restingprimarily on their routines, particularly those for stor-ing knowledge, adapting aspirations, allocating atten-tion,andadaptingtherulesoforganizationaladaptation.

Clearly, the dynamic capabilities perspective iswell aligned with these positions, as evidenced byWinter’s (2000) analysis of aspirations and satisfic-ing in the development of dynamic capabilities. Inaddition, Ocasio’s (1997) elaborations of the behav-ioral theory of the firm imply that the distribution ofattention to certain issues and answers may also bean important aspect of dynamic capabilities, as sug-gested by Helfat and Peteraf (2015). Indeed, the be-havioral theory of the firm suggests that it is thedynamic nature of attention and aspirations thatenables search and the generation of new (entrepre-neurship) opportunities. Similarly, other studiesfollowing the behavioral tradition (Hu, Blettner, &Bettis, 2011; Hu, He, Blettner, & Bettis, 2017) em-phasize the important performance implications ofaspiration adaptation speed, attention allocationdynamics, and reference group setting strategieswithin firms. Thus, further integration of the dy-namic capabilities paradigm with the behavioraltheory of the firm is a rich avenue for future research.With respect to broader behavioral considerations,there is also an opportunity to further integrate theliteratures on social capital (Adner & Helfat, 2003;Kemper, Schilke, & Brettel, 2013) and social net-works (Kleinbaum & Stuart, 2014) into the dynamiccapabilities perspective.

Finally, we believe that dynamic capabilities re-search would benefit from additional integration oftwo streams of research coming from an economicsperspective: evolutionary economics (a close cousinto the behavioral theory of the firm) and transactionscost economics. Although the original idea of dy-namic capabilities by Teece et al. (1997) drew onevolutionary economics in importantways (seeFoss,


Heimeriks, Winter, & Zollo, 2012; Helfat & Peteraf,2009), as noted earlier, the theory has primarily beenused with reference to routines. Although evolu-tionary economics has also informed the emphasison innovation in dynamic capabilities research, theimportant role of search in evolutionary economicshas gone largely unnoticed by dynamic capabilitiesscholars. In particular, in evolutionary economics,search is local in the neighborhood of existingknowledge and routines (Helfat, 1994; Piezunka &Dahlander, 2015); as a consequence, local search canconstrain adaptation to major market shifts. Fromthis perspective, we believe it is important to askquestions such aswhat types of dynamic capabilitiesenable firms to go beyond local search and underwhat conditions? How might dynamic capabilitiesfor search interact with dynamic capabilities forshaping firms’ external environments?Andwhere inthe organization might these different types of ca-pabilities for search and shaping reside?

With respect to transactions cost economics, wenoted earlier that consideration of the boundaries ofthe firm is a gap in the literature in dynamic capabil-ities, with only a few articles referring explicitly to it.Weagreewith JacobidesandWinter (2005),Nickerson,Yen, andMahoney (2012), Argyres and Zenger (2012),andothers that the analysis ofmany strategic decisionswouldbe incompletewithout theconsiderationofbothorganizational capabilities and transaction costs. Forexample, we know relatively little about the extent towhich transactions costs affect which dynamic capa-bilities firms develop and how this affects the bound-ary of the firm with respect to capabilities.

Although the dynamic capabilities perspective islikely to benefit from the creative combination ofdifferent theories, we caution against making onlysuperficial contributions to theory. As previouslynoted in our Methods section, we dropped a total of47 articles from our sample that only referred to dy-namic capabilities cursorily and in passing, withoutvisibly building on or contributing to the perspec-tive’s key tenets. We would thus like to repeatGiudici and Reinmoeller’s (2012) call to avoid re-ification of the dynamic capabilities concept. Con-tinued careful attention to how research tests,extends, or refutes specific elements of dynamic ca-pabilities theory is central to enriching our currentunderstanding of the phenomenon.

Organizing Framework for Dynamic Capabilities

Dimensionalization. It is worth repeating that dy-namic capabilities are highly complex phenomena

and that many distinct types of dynamic capabil-ities exist. Different dimensions can be usefullyapplied to categorize and distinguish dynamiccapabilities, which improves understanding ofhow a study’s focal constructs fit with the broadernature of dynamic capabilities. The literature hasnow advanced such that future researchers canexplicitly situate their focal dynamic capabilitiesalong some of the dimensions outlined in the pre-vioussection (i.e., procedural, routinization, functional,hierarchical, by unit of analysis).

A multitude of investigations have usefully builton the procedural distinctions of Teece et al.’s (1997)coordinating, learning, and reconfiguring processesand Teece’s (2007) sensing, seizing, and trans-forming processes. Making these different organiza-tional processes concrete has helped to enhance ourknowledge of how dynamic capabilities manifestthemselves in organizations. But as 27 articles in oursample point out, further work on process di-mensions is needed, and we agree with this assess-ment. Moving forward, it would be fruitful to addgreater richness to our understanding of these orga-nizational processes, such as by providing in-depthaccounts of how they work on the ground (Harris,Collins, &Hevner, 2009), by comparing their relativerelevance across different settings, by studying theiralignment as a set (Roberts & Grover, 2012), and byidentifying overlaps or interconnections amongthem. Now may also be a good time to move beyondthese established procedural typologies and enrichthe dynamic capabilities framework with additionalorganizational processes that may have been pre-viously overlooked (Protogerou et al., 2012). That is,rather than take existing procedural distinctions forgranted, researchers may want to consider recom-bining, revising, or extending them.

Another distinction that has receivedconsiderableattention since Eisenhardt and Martin’s (2000) orig-inal discussion is that betweenhighly structured andless-routinized forms of dynamic capabilities. Al-though Winter (2003) convincingly argued thata certain degree of routinization is necessary fora process to qualify as a dynamic capability, as wenoted previously, it is clear that the degree of rou-tinization may vary and that such differences mayhave important implications. This is why eight arti-cles call for further research on the routine aspect ofdynamic capabilities. Making significant headwayon this topic, a recent study by Wohlgemuth andWenzel (2016) suggests that strongly routine-basedand more fluid dynamic capabilities can coexistwithin the same organization. We see significant


opportunity for future research not only to in-vestigate the interplay between the two types of dy-namic capabilities (also see Heimeriks, Schijven, &Gates,2012; Peteraf et al., 2013; Schilke, 2014a) but toalso shed light on their potentially distinct anteced-ents and their relative performance impacts.

Furthermore, the notion of purposeful strategicchange through dynamic capabilities can be appliedto even more organizational functions and activitiesthan those that have been investigated thus far. Al-though 20 articles in our content-analysis samplecalled for additional investigation of new productdevelopment—historically the most studied func-tional area within dynamic capabilities research—there is no shortage of suggestions for additionalareas worthy of study from a dynamic capabilitiesperspective, including environmental managementcapabilities (Wong, 2013), political capabilities(Dixon, Meyer, & Day, 2014), corporate restructuringcapabilities (Schilke, 2014b), and business modeladaptation capabilities (Mezger, 2014;Wirtz, Schilke, &Ullrich, 2010). Ongoing areas of empirical investiga-tion into dynamic capabilities, on topics such as ac-quisitions, alliances, and capital allocation, amongothers, would also benefit from additional research.And we see particular merit in studying more thanone functional dynamic capability at once, so as touncover similarities and differences between indi-vidual capabilities and analyze firms’ dynamiccapabilities profiles as a whole.

Another dimension of dynamic capabilities thathas received calls for additional research concernsthe hierarchy of capabilities (14 articles in our sam-ple). As noted earlier, the idea that capabilities canbe viewed hierarchically is not new (Collis, 1994;Zollo & Winter, 2002), but seeking additional em-pirical insight into higher-order dynamic capabil-ities and their relationship with “regular” dynamiccapabilities is in our view another important op-portunity for deepening dynamic capabilities re-search, following the lead of the studies byHeimeriks et al. (2012) and Schilke (2014b). Weconsider the notion of dynamic capabilities ofa higher order as particularly appealing because itenables dynamic capabilities scholars to respondto the question of where (first-order) dynamic ca-pabilities come from with an answer that makesuse of its key concept—namely, capabilities. Inaddition, in light of studies discussed earliershowing that capabilities may be substitutes ratherthan complements, we believe that it would behelpful for future research to address the conditionsunder which lower- and higher-order dynamic

capabilities are complements versus substitutesand when operational and dynamic capabilities arecomplements versus substitutes.

Traditionally, researchers have located dynamiccapabilities at the organizational level of analysis;however, as noted earlier, starting in the early 2000s,the recognition that such capabilities can also exist atthe individual level has become increasingly dif-fused (Adner & Helfat, 2003; Augier & Teece, 2009;Felin & Foss, 2005; Helfat & Martin, 2015). Variouscalls for greater insight into individual-level dy-namic capabilities (a total of 19 articles) have beencomplemented by suggestions to consider additionalunits of analysis, including units that go beyond firmboundaries (10 articles). In particular, research onsupply chain management has indicated that dy-namic capabilities may also operate at the in-terorganizational level of the supply chain system,an intriguing idea that we find worthy of greater re-search attention. In addition, a particularly chal-lenging but also potentially rewarding effort forfuture researchwould be to shedmore light on cross-level dynamics (also see Huikkola, Ylimaki, &Kohtamaki, 2013; Jansen et al., 2005; Salvato &Rerup, 2011). Questions that we offer for future re-search include, for instance, how exactly do dy-namic managerial capabilities affect organizationaldynamic capabilities? Is more dynamic managerialcapability always “better” or does it depend on thecomposition of a variety of skills? Moreover, whatabout the other causal direction—that is, how do or-ganizational dynamic capabilities affect the develop-ment of dynamic managerial capabilities? And howdoes the team level of dynamic capabilities intervenein the individual-to-organization relationship?

In summary, the more nuanced approach of in-vestigating specific kinds of dynamic capabilitiesthat are distinguished along a variety of dimensionshas in our opinion added much richness to the dy-namic capabilities research agenda. In addition tofurther exploring individual elements of selectedtypologies, we believe that the dynamic capabilitiesperspective can benefit from future research thatintegrates and juxtaposes these typologies with oneanother to provide added coherence and cross-fertilization. For example, what are the similaritiesanddifferences in routinizationat the individual andorganizational levels of analysis? Do coordination,learning, and reconfiguration processes matter to allfunctional dynamic capability domains? Howmighthigher-order dynamic capabilities operate at theteam versus firm level? Exploring questions likethese will require data on more than one dimension


of dynamic capability for them to be systematicallycompared. In addition to such integrative efforts, thelist of dimensionalization approaches has not yetbeen fully exhausted. Other ways to characterizedynamic capabilities may, for instance, be based ondifferentiating between temporal phases (Mitrega,Forkmann, Ramos, & Henneberg, 2012) or the psy-chological processes involved (Helfat & Peteraf, 2015;Hodgkinson & Healey, 2011). As such, we view re-search into the different dimensions to be particularlypromising to further advance insight into the nature ofdynamic capabilities.

Antecedents. Scholars continue to remain veryinterested in the origins of dynamic capabilities,with a total of 80 articles addressing future researchon the antecedents of dynamic capabilities. As dis-cussed previously, much is known already about therole of prior paths—experience—and positions—resources—as well as other antecedents such as or-ganizational structure. However, there are relativelyfew studies that examine interactions among differ-ent antecedents, and there are important antecedentsthat are largely unexplored. For example, the re-lationship between leadership and dynamic capa-bilities is a micro-level topic that in our view hasuntapped potential (also see Kanter, Bird, Bernstein,& Raffaelli, forthcoming). Moving beyond firmboundaries, we need to know more about how dif-ferent types of networks and network positions mayshape dynamic capabilities, a topic that has receivedrelatively little attention. Overall, it is clear there isnot a single source for dynamic capabilities, so wesee potential for future research to continue to elu-cidate a variety of important antecedents.

One notable aspect of dynamic capabilities re-search to date is that several of the antecedents in theframework depicted in Figure 2 also show up else-where in the figure. The fact that some antecedentsmay also be dimensions, mechanisms, moderators,and/or consequences of dynamic capabilities hasgone largely unremarked in the literature. A case inpoint is environmental dynamism, which can beboth an antecedent to a dynamic capability (Piening,2013) and a moderator of the dynamic capability-performance effect (Schilke, 2014a). Interestingly,the theoretical argument underlying both positionsis virtually identical; it is based on the idea thatbuilding and maintaining organizational changeroutines tends to be particularly advantageous whenthere is some change in the environment. That is,firms may be more likely to develop dynamic capa-bilities in at least a moderately changing externalenvironment, and dynamic capabilities are also

likely to have a greater effect on performance in thiscircumstance.

We believe that one reason why environmentaldynamism shows up in different places may have todowith the varying degree towhich scholars assumemanagers to be rational. Analogous to the “discrim-inating alignment hypothesis” in transaction costeconomics (Williamson, 1991), scholarswhoassumerelatively high levels of rationality will expectmanagers to anticipate that returns to dynamic ca-pability investments are dependent on the degree ofenvironmental dynamism and to only invest inthose capabilities up to a certain point that is alignedwith the dynamism of the firm’s environment—suggesting an antecedent role of environmental dy-namism. In contrast, scholars that put less faith inmanagers’ rationality regarding dynamic capabilitydevelopment decisions would instead allow for sub-optimal dynamic capability endowments (Bromiley,2004); researchers then would predict variations inthe performance effects of these capabilities asa function of environmental dynamism—suggestingamoderating roleof environmental dynamism.And ifmanagers are boundedly rational, we are likely toobserve environmental dynamism as both an ante-cedent and a moderator to some degree. All of theseapproaches are internally consistent and viable aslong as one’s position regarding managerial rational-ity is laid out clearly—a point that goes back to ourearlier discussion about the benefits of stating thetheoretical assumptions used in a study.

Another concept that occupies several roles inFigure 2 is organizational learning. As noted earlier,sometimes learning is considered an antecedent,sometimes a dimension, and sometimes a conse-quence of dynamic capabilities. Of course, learning(much like dynamic capabilities) is a highly multi-faceted phenomenon (Argote, 1999). First, the ante-cedent type of learning can often be understood asa higher-order meta-routine that helps organizationsto develop lower-order organizational change rou-tines (in line with our previously mentioned dis-cussion of dynamic capabilities at differenthierarchical levels; also see Schilke (2014b) andZollo and Winter (2002)). Second, subprocesses oflearning in the dimensions that underlie dynamiccapabilities tend to refer to learning as it pertains toaltering the organizational resource base (Teeceet al., 1997). Finally, consequences of dynamic ca-pabilities may include learning outcomes, such asnew knowledge-based resources or improved oper-ational routines. Additional research would behelpful to better understand the relationships among


the elements of organizational learning in differentparts of the dynamic capabilities framework.

Similarly, resources have multiple roles in the or-ganizing framework. As antecedents, resources pro-vide the inputs necessary to build and maintaindynamic capabilities, and they are also used in con-junctionwithdynamic capabilities (Winter, 2003).Ascausal mechanisms, resources that have been alteredthrough dynamic capabilities in turn provide the ba-sis for other consequences, such as changes to firm-level performance. In yet other research, themodified(and ideally improved) resource base of the organi-zation is treated as the outcomeof exercisingdynamiccapabilities. In light of these different roles that re-sources play, we believe that further longitudinal in-vestigations focusing on the reciprocal nature of thedynamic capabilities–resources relationship and in-troducing explicit feedback loops would help to fur-ther elucidate this logic.

Finally, most research on antecedents has remainedagnostic with regard to whether the analytical focusis on identifying factors that facilitate (a) thecreation/development, (b) the maintenance/sustainment,or (c) the actual exercise/usage of dynamic capa-bilities. We believe that future research wouldbenefit by separating these analytically so as to as-certain whether some antecedents matter more insome of these categories than others. In addition,wesee an opportunity to investigate feedback loopsfrom dynamic capabilities to organizational andindividual-level antecedents through an impact onconsequences such as learning.

Consequences. Given the variety of different dy-namic capabilities, the articles in our sample con-tinue to recommend additional investigations intocommon outcome variables, such as firm-levelperformance (57 articles) or innovation outcomes(12 articles). In addition, we also observed variousscholars advocating greater nuance and investigatingmore fine-grained aspects of performance conse-quences, such as project-specific outcomes (Im,Montoya, & Workman, 2013), cost efficiency mea-sures (Vanpoucke, Vereecke, & Wetzels, 2014), andcustomer satisfaction (Fawcett et al., 2011). Otherrecommendations aimed at further broadening therange of consequences to include those not directlyrelated to performance, such as the level of trustin organizations (Laeequddin, Sardana, Sahay,Waheed, & Sahay, 2009), the organization’s scopeof diversification (Døving & Gooderham, 2008), se-lected entry modes in international expansion(Brouthers et al., 2008), and CEO pay (Carpenteret al., 2001).

Webelieve that, althoughmuch evidence for a linkbetween dynamic capabilities and performanceoutcomes has accumulated already, the study ofsuch consequences will, and should, remain at thecore of future inquiry. As mentioned earlier, a keyaspect that sets the dynamic capabilities perspectiveapart from other literatures on change is its strongorientation toward explaining competitive advan-tage. Therefore, we expect many future studies tohave some type of performance measure as theirdependent variable. Relevant outcomes, however,are not always firm-level performance. As notedearlier, as per Ray, Barney, and Muhanna (2004),scholars are well advised to choose an outcomevariable that is sufficiently close to their study’s focaltype of capability rather than always use a broad andaggregated firm performance measure. For example,even though a dynamic capability may be highlybeneficial, a firm may still lack in overall perfor-mance for other reasons, making it more difficult todetect an effect of dynamic capabilities. Therefore,more proximal measures of dynamic capability ef-fectiveness are often appropriate. Furthermore,moreresearch on the effects of dynamic capabilities onrelevant “nonperformance” outcomes such as orga-nizational structure would be fruitful, especiallywhen such variables are modeled as intermediaryoutcomes in a multi-step chain, as discussed next.

Mechanisms. A total of 28 articles in our samplepoint to the need for greater knowledge of causalmechanisms in dynamic capabilities research. Weconcur this is a noticeable gap in the literature. AsFigure 2 shows, with the exception of changes in theresource base mediating the dynamic capability–performance link, the mechanism category hasremained underspecified and relatively few articleshaveaddressedcausalmechanismsat all.Mechanismsare fundamental to theory building and enrichment(Stinchcombe, 1991). Thus,weview the exploration ofrelevantmediators as an important opportunity for thenext decade of dynamic capabilities research.

First, we see an interesting opportunity for futurework to add greater richness to our understanding ofthe mechanism of resource base change, given thismechanism’s central role in many foundationalworks (Eisenhardt & Martin, 2000; Helfat & Peteraf,2003; Zahra et al., 2006; Zott, 2003) and the diverseways in which resource changes can potentiallycome about.9 Specifically, is there evidence fora more pronounced mediating role of intentional

9 We are grateful to the associate editor for pointing us tothis important suggestion for future research.


versus coincidental change, for change in tangibleversus intangible resources, or for increased re-source diversity versus depth?

Moreover, we believe that several mediating vari-ables other than resource changes could reasonablybe added. For instance, aswepointed out previously,the general topic of shaping the environment meritsgreater attention from a dynamic capabilities per-spective. Teece (2007) provides several concreteexamples, including transforming regulations, tech-nological standards, partners, and other institutionswithin the business ecosystem. That is, firms can usedynamic capabilities to alter many features of theirexternal environments, which in turn may affectperformance outcomes. Current empirical researchon these topics has yet to strongly pursue them froma dynamic capabilities perspective, creating a sig-nificant opportunity to make an important contri-bution. We thus advocate further explorations of themediating role of bringing about changes in the ex-ternal environment in the dynamic capability–consequences link.

Furthermore, previous studies have sometimesemphasized the upsides of dynamic capabilitieswithout accounting for their costs (cf. CliffordDefee &Fugate, 2010). The importance of costs in developingand deploying dynamic capabilities was pointed outby Winter (2003) and has been noted in more recentstudies (Schilke, 2014a; Stadler et al., 2013), but this isstill an understudied area. For example, researcherscould measure the costs associated with dynamiccapability deployment as a separate variable, or ob-tain good proxy measures for these costs, whichwould allow them to consider deployment costs as anadditional intermediatemechanism in explaining thelink between dynamic capabilities and their conse-quences. Costs are relevant to other parts of the orga-nizing framework as well. For example, because thecosts of developing dynamic capabilities are largelysunk (i.e., difficult to recoup through direct sale),firms should consider the cost of developing a dy-namic capability when deciding whether to invest indoing so (Winter, 2003). This reasoning suggests thatthe (firm- and situation-specific) development cost ofdynamic capabilities is also a likely antecedent thatwould benefit from future research.

In addition, we need research that pays more at-tention to the kinds of mechanisms that Verona andZollo (2011) and Zollo, Bettinazzi, Neumann, andSnoeren (2016) call “non-behavioral objects of ac-tion” and that are typically not among the types offirm resources traditionally considered by strategyscholars. Rather than addressing material, behavioral

changes, these mechanisms capture how dynamiccapabilities may lead to changes in cognitive, emo-tional, and motivational traits of individual organi-zational members, their shared mental models andcognitive frames, and even the organization’s iden-tity, which in turn can have important performanceconsequences.

Finally, it is noteworthy that we did not comeacross any investigations of antecedents to dynamiccapabilities that incorporated mediators betweenantecedents and dynamic capabilities. It would bebeneficial to advance extant research on antecedentsby gaining a better understanding of how exactlythey exert their effects on dynamic capabilities. Forthis reason, we believe that developing a layer ofrelevant mediators is important.

Moderators. The study of moderators has beenone of the main growth areas in recent dynamic ca-pabilities research, and scholars have advocatedcontinuing on this trajectory. Other organizationalcapabilities and certain organizational structuresare among the organizational-level moderatorsmost frequently suggested for further study (21 and13 articles, respectively). Among environmental mod-erators, the industry sector (34 articles), environmentaldynamism (23 articles), and the geographic area(22 articles) are among the top picks for furtherinvestigation.

To add further richness to this line of inquiry, wesuggest considering moderated mediation. Advancesin software packages (e.g., Preacher & Hayes, 2004)havemade itpossible tomore easily estimate a varietyof more complexmodels that can shed light onwhereexactly the moderator comes into play—for example,at either the dynamic capabilities–mediator or themediator–consequence link. Thus, future studiescould explore whether environmental dynamismprimarily conditions the dynamic capability–resource change link or the resource change–firmperformance link, or both.

Future research could also incorporate the impactof dynamic capabilities on variables currently treat-ed as moderators, such as organizational size, cul-ture, structure, strategy, and other capabilities.These are clearly features of organizations that dy-namic capabilities may act upon, suggesting thatfeedback loops from dynamic capabilities to mod-erators of their effectsmerit additional investigation.

Additional Considerations

Dynamics. Researchers are increasingly consid-ering implementation of dynamic capabilities and


associated issues of timing (Anand et al., 2009;Harreld, O’Reilly, & Tushman, 2007). It is encour-aging to see that the dynamic capabilities concept isdiffusing to more practitioner-oriented outlets(e.g., the California Management Review). We viewthis as an important issue, because managers willmore fully appreciate the value of the dynamic ca-pabilities perspective if we are able to provide themwith additional practical guidance on how to fosterthe growth of those capabilities in their firms (Felin&Powell, 2016; Nickerson et al., 2012). In particular,further studies focusing on the steps involved indeveloping and successfully implementing dy-namic capabilities would be very desirable (Allred,Fawcett,Wallin,&Magnan, 2011; Beer, 2013;Malik&Kotabe, 2009; Narayanan, Colwell, & Douglas, 2009).In line with our previous suggestions regarding the-oretical integration, dynamic capabilities scholarsmay find relevant guidance in this regard from thechange management literature (also see Fawcettet al., 2012; Sune & Gibb, 2015). This literature alsospeaks more broadly to issues of planning strategicchange, the role of change leaders, and dealing withemployee resistance.

More generally, we encourage researchers to ap-proach the study of dynamic capabilities froma process perspective in their future investigations,consistent with Langley et al.’s (2013: 1) powerfulprimer on process studies in management, in whichthey urge organizational scholars to “take time seri-ously, illuminate the role of tensions and contra-dictions in driving patterns of change, and showhowinteractions across levels contribute to change.” Thestriking tension between dynamic change and (rela-tively) stable routines, although at the heart ofdynamic capabilities, remains somewhat counter-intuitive and underilluminated. Further research isneeded to elaborate onhowdynamic capabilities canaffect change while at the same time following rep-etitious behavioral patterns that, despite their con-tinuity, may ultimately also be subject to change asthese routines are being performed, contextualized,and reinterpreted.

Research methods. In coding limitations and sug-gestions related toempiricalmethods,we followed thetaxonomy employed by Brutus et al. (2013), whichmaps the four general threats to validity (i.e., internal,external, construct, and statistical conclusion).Most of the identified issues are quite general andapply to much strategy research beyond dynamiccapabilities, as indicated by the illustrative quotesabout methods in Table 3. However, beyond theissues identified in the content analysis, there are

several other methodological considerations thatwe believe are particularly germane to dynamiccapabilities research and that we hope will en-courage new methodological approaches in thestudy of dynamic capabilities.

First, we suggest more mixed-methods research,which can allow for simultaneous theory extensionand testing. So far, most studies on dynamic capa-bilities have relied on either qualitative or quantita-tive approaches, but combing the two in a singleinvestigation opens up significant potential for pro-viding deep insight into the functioning and thebroader role of dynamic capabilities. Second, weencourage additional use of archival data and em-pirical proxy variables (see Stadler et al., 2013). Ouranalysis indicated that this well-established ap-proach to empirical research has been less used indynamic capabilities research than survey andqualitative methods. There are a variety of ways tomeasure dynamic capabilities through proxy vari-ables with archival data. For example, one approachis to use a measure of prior experience that goes intodeveloping a dynamic capability (see Chen et al.,2012). Another approach is to use an intermediateoutcome of a dynamic capability as a measure of theextent of “capability” that is then used to producea subsequent outcome. Yet another approach is tomeasure inputs to a dynamic capability. All of theseapproaches have been used in the broader capabil-ities literature and are applicable to dynamic capa-bilities. In addition, a broader set of econometrictechniques, including those that more precisely an-alyze cause-and-effect relationships, can often beapplied to archival data.

Third, meta-analyses may prove useful. Giventhe significant body of empirical research on dy-namic capabilities that has accumulated, we cannow start to synthesize existing findings usingmeta-analytic techniques. The recent meta-analysisby Fainshmidt et al. (2016) is a good example: theseauthors not only provided synthetic evidence forthe positive performance effect of dynamic capa-bilities but also added previously largely un-explored moderators, such as the economiccontext. Fourth, quasi-replications that seek to re-produce prior findings about dynamic capabilitiesin different settings (e.g., in different industries,time periods, and countries) can help scholars togain a greater understanding of the extent to whichprior empirical results are generalizable (Bettis,Helfat, & Shaver, 2016). The findings of suchstudies may, in turn, suggest additional theoreticalconsiderations.


Fifth, as more dynamic capabilities scholarsmove into microfoundations, we see experimentalmethods as an attractive methodological choice(Bitektine, Lucas, & Schilke, forthcoming; Fosset al., 2012). The recent investigations by Levineet al. (forthcoming) andWollersheim andHeimeriks(2016) are two of few dynamics capabilities studiesthat use laboratory experiments. The former neatlydemonstrates how laboratory experiments can ad-vance the theory of dynamic capabilities: Levineet al. (forthcoming) construct in the laboratorya realistic market, where participants trade assetsfor real money. Through experimental design, theresearchers eliminate possible advantages frommarket structure or strategic resources, disen-tangling the effect of dynamic capabilities fromother possible sources of competitive advantages.Thus, when they find widespread performanceheterogeneity, they can causally tie it to preexistingdifferences in managerial dynamic capabilities,operationalized through strategic intelligence.Wollersheim and Heimeriks (2016) identify severaldistinct advantages of dynamic capabilities in termsof resource use efficiency, coordination efficiency,appropriate action sequencing, and greater de-liberation. As they argue, laboratory experimentscan benefit the study of dynamic capabilities byproviding ameans to assess causality, hold constantpotential confounding factors, and isolate un-derlying processes. Several types of experimentalparadigms, including routine-prone card games orinterdependent production tasks (Foss et al. 2012),can be fruitfully employed to bring dynamic capa-bilities into the laboratory by studying reactionsto environmental shocks. Field experiments alsocould add to the empirical base of dynamic capa-bilities; this approach has been used to study therole of managers in strategic change (Helfat &Martin, 2015) and could be applied to dynamic ca-pabilities more generally.

CONCLUSION

Interest in dynamic capabilities has grown sub-stantially in recent years. In this article, we havetaken stock of the flourishing stream of research ondynamic capabilities, with a particular focus onwhere the field canmovenext as scholars continue tobroaden and deepen extant knowledge. Going be-yond earlier review articles, the article developsa comprehensive meta-framework of dynamic ca-pabilities that reflects the richness of recent in-vestigations, synthesizingprior researchandproviding

a basis for future research. Based on an integrativeanalysis of a large sample of relevant investiga-tions, this article takes important steps towardfurther unifying the field of dynamic capabilities.

Our review shows that the recent stream of re-search has moved the dynamic capabilities per-spective significantly forward while addressingearlier criticisms regarding the underspecification ofthe dynamic capabilities construct. At this point, themost frequently used general definitions of dynamiccapabilities are complementary to one another andhave achieved substantial clarity, for which reasonwe believe that further convergence is not a highpriority. Scholars have also made substantial prog-ress in addressing the earlier criticism that empiricalworkwas lacking, which is clearly no longer the caseas most of the research on dynamic capabilities isnow empirical. In addition, research has made sub-stantial progress identifying and investigating ante-cedents to dynamic capabilities and demonstratingtheir consequences, which earlier critiques had sin-gled out as requiring greater attention. A good dealof work has also addressed earlier criticism of ill-specified boundary conditions by investigating con-tingencies in the dynamic capabilities–performancerelationship. Of note, many of these studies have in-vestigatedenvironmentaldynamismasacontingencyvariable, addressing prior criticisms that environ-mental dynamism should not be viewed as a pre-condition for dynamic capabilities.

Despite this progress, we have identified impor-tant gaps in the literature that call for additional re-search. These include theneed for significantlymoreattention to integration of underused theories, com-plemented by empirical research; mechanismsinvolving dynamic capabilities; feedback loops be-tween dynamic capabilities and their antecedents,consequences, mediators, andmoderators; interactionsamong antecedents to dynamic capabilities; comple-mentarity versus substitution effects among differentdynamiccapabilities andbetweendynamiccapabilitiesandoperational capabilities; the costs of developingand employing dynamic capabilities; the role ofdynamic capabilities in shaping the external envi-ronment; and process-based approaches to the evo-lution of dynamic capabilities. We have also pointedto the unresolved tension between more versus less-routinized dynamic capabilities and have thereforecalled for additional research on which types ofdynamic capabilities are more or less heavily routin-ized and the consequences for organizations. Andwe have further suggested that scholars reorient thestudy of the consequences of dynamic capabilities to


focus more heavily on proximal outcomes. Beyondthis, to continue to make empirical progress, we ad-vocate greater use of archival data and laboratorystudies. Knowledge gained from additional researchin these areas holds the potential to considerablyaugment the organizing framework for dynamic ca-pabilities that we provided. We hope not only to aidindividual scholars in identifying interesting researchquestions but also to help the body of research ondynamic capabilities to further develop and grow.

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APPENDIX A. EMERGENT CODING FRAMEWORK—CURRENT STATE OF KNOWLEDGE

First Layer Second Layer Third Layer

What

Definition

Teece et al. 1997Eisenhardt and Martin 2000Helfat et al. 2007Zollo and Winter 2002Teece 2007Winter 2003Other (including unspecified)

Underlying process

Coordinating/ learning/ reconfiguring Sensing/ seizing/ transforming Other (including unspecified)

Functional domain

Alliancing Divestiture Information technology International expansion/adaptation Merger & acquisition New product development (R&D) Sourcing Other (including unspecified)

Unit of analysis

Individual Group Firm Beyond firm boundaries Other (including unspecified)

Other dimensionaliza-tion approach Other (including unspecified)

Routinization Routinized versus ad hoc

Capabilities hierarchyZero-, first-, second-, and higher-ordercapabilities


APPENDIX A(Continued)

How

Antecedent

Consequence

Dynamics

ExperienceOrganizational structureOrganizational culture (includingintraorganizational communication,external orientation)

Resources (including capabilities)Information technologyHuman capitalLeadershipManagerial cognitionExternal environment (includingdynamism, uncertainty, stage ofevolution)

Interorganizational structureOther (including unspecified)

Firm-level performanceDomain-/process-specific performanceExternal fitnessSurvivalGrowthFlexibilityInnovation outcomesResource-base changeLearningOther (including unspecified)

EvolutionTiming of effectsOther (including unspecified)

Why

Mediator

Theoretical assumption

Theory integration

Resource base Other (including unspecified)

Bounded rationality Managerial agency Heterogeneity of dynamic capabilities Other (including unspecified)

Resource-based view of the firm Learning theory Evolutionary economics Transaction cost economics Other (including unspecified)


APPENDIX A(Continued)

Who/where/when


Environmental factors

Time

Size Structure Culture Strategy Interorganizational structureOther organizational capabilitiesOther (including unspecified)

Industry sector Geographical area Environmental dynamism Competitive intensity Other (including unspecified)

Unstable theoretical effect Other time-dependent variables

Methods

Empirical

Conceptual

Archival data Large-scale survey Qualitative Meta analysis Mixed methods

Formal modeling Simulation Qualitative theory


APPENDIX B. EMERGENT CODING FRAMEWORK—FUTURE RESEARCH DIRECTIONS

First Layer Second Layer Third Layer

What

DefinitionClarity of definition Convergence of definitions Other (including unspecified)

Underlying processCoordinating/ learning/ reconfiguringSensing/ seizing/ transforming Other (including unspecified)

Functional domain

Alliancing Information technology International expansion Merger & acquisition & Divestiture New product development (R&D) Human resources Marketing CSR Operations/logistics Other (including unspecified)

Unit of analysis

Individual Group Business unit Firm Beyond firm boundaries Multi-level Other (including unspecified)

Other dimensionaliza-tion approach

Other (including unspecified)

RoutinizationRoutinized versus ad hoc

Capabilities hierarchy Zero-, first-, second-, and higher-ordercapabilities


APPENDIX B(Continued)

How

Antecedent

Consequence

Dynamics

Experience Organizational structure Organizational culture (includingintraorganizational communication,external orientation)

Resources (including capabilities) Information technology Human capital Leadership Managerial cognition External environment (includingdynamism, uncertainty, stage ofevolution)

Partnering with others Other (including unspecified)

Firm-level performance Domain-/process-specific performanceExternal fitness Survival Growth Flexibility Innovation outcomes Resource-base change Learning Organizational change Other (including unspecified)

Evolution Timing of effects Other (including unspecified)

Why

Mediator

Theoretical assumption

Theory integration

Resource base Other (including unspecified)

Bounded rationality Managerial agency Heterogeneity of dynamic capabilitiesOther (including unspecified)

Entrepreneurship Resource-based view of the firm Learning theory Evolutionary economics Social cognition Transaction cost economics Other (including unspecified)


APPENDIX B(Continued)

Who/where/when


Environmental factors

Time

Size Structure Culture Strategy Interorganizational structureOther organizational capabilities Other (including unspecified)

Industry sector Geographical area Environmental dynamism Competitive intensity Other (including unspecified)

Unstable theoretical effect Other time-dependent variables

Methods

Internal validity

External validity

Issues with causality Issues with omitted variables Other threats to internal validity

Issues with generalizability Issues with (survey) response Other threats to external validity

Construct validity

Statistical conclusionvalidity

Issues with operationalization ofconstructsIssues with data sourceCommon method bias Other threats to construct validity

Issues with analysis method Issues with sample size Other threats to statistical conclusionvalidity


APPENDIX C. LIST OF THE INITIAL 39 ARTICLES USED TO DETERMINE INTER-RATER AGREEMENT

Allred et al. (2011)Ambrosini et al. (2009)Argote and Ren (2012)Augier and Teece (2009)Barreto (2010)Bock et al. (2012)Bock et al. (2012)Butler and Murphy (2008)Capron and Mitchell (2009)Chiang, Kocabasoglu-Hillmer, and Suresh (2012)Coen and Maritan (2011)Danneels (2008)Desyllas and Sako (2013)Dixon et al. (2014)Døving and Gooderham (2008)Easterby-Smith and Prieto (2008)Eisenhardt et al. (2010)Ellonen, Wikstrom, and Jantunen (2009)Engelen et al. (2014)Giudici and Reinmoeller (2012)

Harris et al. (2009)Hofmann, Theyel, and Wood (2012)Hsu and Wang (2012)Laeequddin et al. (2009)Leiblein (2011)Maatman et al. (2010)MacCormack and Iansiti (2009)Macher and Mowery (2009)Maniak, Midler, Beaume, and von Pechmann (2014)Martin (2011)McGahan (2012)Nieves and Haller (2014)O’Connor (2008)Salge and Vera (2013)Schepker, Oh, Martynov, and Poppo (2014)Schilke (2014a)Tang and Liou (2010)Townsend, Cavusgil, and Baba (2010)Witcher and Chau (2012)


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