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The problem of achieving individual project performance has been replaced by the problem of achieving organizational goals through project performance. Only project-based firms able to learn and build project capabilities can successfully compete in today’s dynamic environments. The purpose of this paper is to present a dynamic capability-based framework that sheds light on how project and organizational dynamic capabilities are built and how these dynamic capabilities allow project-based firms to perform in dynamic environments. Our theoretical framework unpacks the processes of building dynamic capabilities inside a project-based firm, discussing the routines and procedures that are useful to manage projects in unstable and dynamic environments and to build and reconfigure organizational capabilities from project-led knowledge.

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