Dynamic Capabilities Flashcards
What are dynamic capabilities?
The capacity of renew competences to achieve congruence with the changing business environment.
The ability to adapt and reconfigure internal and external organisational skills, resources, functional competences to adapt to changing environment.
Are “higher order” competences that allow to maintain a competitive edge.
They consist of three key steps identified by Teece:
- Sensing, identifying the opportunity. Positioning oneself for entry.
- Seizing, structure in order to go into that specific direction. Invest and build competence.
- Transforming. Recombine resources to fit the new model.
What are the elements of the Sensing stage according to Teece?
Sensing: systems to learn, sense, filter, shape and calibrate opportunities.
activities:
1. direct internal R&D to select new technologies.
2. processes to tap into exogenous science and technology.
3. processes to identify target market segments, changing consumer needs and customer innovation.
4. processes to tap into supplier and complementors innovation.
What are the elements of the Seizing stage according to Teece?
Seizing: enterprises structure, procedures and incentives to seize opportunities.
activities:
1. Delineating the customer solution and business model.
2. Select decision-making protocols (identify inflexion points and avoid decision errors and anti-cannibalisation proclivities)
3. Select and reshape co-specialised assets and assess appropriability.
4. Build loyalty and commitment (communication, values, culture)
What are the elements of the Transforming stage according to Teece?
Transforming: continuous re-alignment of tangible and intangible assets.
- Decentralisation (loosely couple structures, embrace open innovation)
- Governance (Incentive alignment, Minimise agency issues…)
- Knowledge Management (Knowledge transfer, know-how integration, IP protection)
- Co-specialisation (employ assets in value-enhancing way).
