Dynamic capabilities and performance: How has the relationship been assessed?

Abstract

The contribution of dynamic capabilities (DCs) to firm performance remains unclear and at the centre of debate. Based on a systematic literature review of 92 quantitative articles, the purpose is to explore how the DC–performance relationship have and should be assessed in the future. The most promising approach seems to be indirect, as it appears that DCs primarily causes change and intermediate outcomes, though far from being the most hypothesized relationship. Moreover, investigations employ a continuum of conceptualizations, ranging from very specific DCs to generic sets with theoretical divergences and overlapping. The same applies to the varied performance measures adopted, evidencing that the literature still has a long way to go. Based on a structured synthesis and analysis of existing studies, a conceptual model, recommendations and future avenues are proposed, along with areas of attention, which have both managerial and practical relevance, contributing to advancement within this research stream.

The effect of project management dynamic capabilities on firm performance

“…Despite the fact that the dynamic capabilities approach has developed under the influence of two papers that are somehow contradictory (Peteraf et al. , 2013), there seems to be a consensus that dynamic capabilities affect firm performance in multiple ways (Baia and Ferreira, 2019). However, the nature of that relation, the actual intensity of the relation and the way the influence occurs remain unclear (Baia and Ferreira, 2019).…”

“…However, the nature of that relation, the actual intensity of the relation and the way the influence occurs remain unclear (Baia and Ferreira, 2019). Moreover, throughout the literature, dynamic capabilities are giving a variety of roles, that is, independent, dependent and mediating variables, when exploring their influence on performance outcomes (Baia and Ferreira, 2019). As Baia and Ferreira (2019) have recently presented, there are four different models for hypothesizing the relationship between dynamic capabilities and performance:A direct approach where dynamic capabilities directly and positively influence performance outcomes (dynamic capabilities → performance outcomes).A modification of the direct approach where dynamic capabilities are recognized to have antecedents, playing then the role of mediating variable (antecedents to DC → dynamic capabilities → performance outcomes).An indirect approach where the influence of dynamic capabilities on performance outcomes is mediated by an intermediate operative result (dynamic capabilities → intermediate operative result → performance outcomes).An indirect approach where the influence of dynamic capabilities on performance outcomes is mediated by a change in firm's resource base (dynamic capabilities → change in resource base → performance outcomes).…”

“…The stream of research emerging from the Teece et al. ’s (1997) seminal paper claims that dynamic capabilities directly influence performance and that dynamic capabilities constitute a source of a sustainable competitive advantage since they meet the valuable, rare, inimitable, and organization (VRIO) criteria of resources (Baia and Ferreira, 2019; Peteraf et al. , 2013).…”

“…, 2013). Thus, they claim that dynamic capabilities are necessary but not sufficient condition for competitive advantage since they do not meet all the VRIO criteria (Baia and Ferreira, 2019).…”

Comprehending a knowledge framework as a source of dynamic capabilities in IJVs through PLS-SEM

“…Way back in 1942, the theory of creative destruction appositely put forth the learning-based innovation as a source of competitive advantage (Schumpeter, 1947). The proliferation of multinationals in the present turbulent global environment transcends the explanatory power of traditional theories of firm efficiency such as transaction cost economics and resource-based view (Baía and Ferreira, 2019). All the imperative elements of these theories have been coalesced into the evolutionary theory of dynamic capabilities (Molden, 2020).…”