A New Perspective on Factors Influencing the Development of Dynamic Capabilities

Objectives. The dynamic capability framework has got the wide attention of prominent scholars because of its importance in providing sustainable competitive advantage. Yet, researchers have less focused on the development process of dynamic capabilities. This study investigates the role of organizational factors, more specifically organizational culture and leadership, in the development of dynamic capabilities. Methodology. This is a qualitative research study that involved comparative case study analysis. Semi-structured interviews were used in data collection. Based on original data collected through 21 interviews (13 from company A and 8 from company B), we analyzed what drove the development of dynamic capabilities in two quite different cases. Findings. It was found that research on the development of dynamic capabilities needs a holistic approach as organizational factors are interrelated and interdependent. On the basis of this, we have drawn number of conclusions and proposed a conceptual model which is based on three propositions. First, dynamic organizational culture is positively related to firm’s capacity to develop dynamic capabilities. Second, dynamic leadership has a significant role in creating dynamic organizational culture. Third, dynamic leadership plays a vital role in the development of dynamic capabilities. Research limits. The model has been developed upon evidences coming from a limited number of case studies, therefore, results must be interpreted with caution. Practical implications. This paper will act as guide for managers’ and leaders’ in creating dynamic culture within the organization and developing dynamic capabilities. Originality of the study. The originality of the study lies in the fact that it proposes a new model, revealing the traits of dynamic organizational culture and dynamic leadership, the two organizational factors influencing firm’s capacity to develop dynamic capabilities.