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Dynamic capabilities and strategic management

  1. David J. Teece1,*,
  2. Gary Pisano2,
  3. Amy Shuen3

Article first published online: 4 DEC 1998

DOI: 10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z

Issue

Strategic Management Journal

Strategic Management Journal

Volume 18, Issue 7, pages 509–533, August 1997

Additional Information

How to Cite

Teece, D. J., Pisano, G. and Shuen, A. (1997), Dynamic capabilities and strategic management. Strat. Mgmt. J., 18: 509–533. doi: 10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z

Author Information

  1. 1

    Haas School of Business, University of California, Berkeley, California, U.S.A.

  2. 2

    Graduate School of Business Administration, Harvard University, Boston, Massachusetts, U.S.A.

  3. 3

    School of Business, San Jose State University, San Jose, California, U.S.A.

*Institute of Management, Innovation and Organization, Haas School of Business, University of California, Berkeley, CA 94720–1930, U.S.A.

Publication History

  1. Issue published online: 4 DEC 1998
  2. Article first published online: 4 DEC 1998
  3. Manuscript Revised: 4 MAR 1997
  4. Manuscript Received: 17 APR 1991

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Keywords:

  • competences;
  • capabilities;
  • innovation;
  • strategy;
  • path dependency;
  • knowledge assets

Abstract

The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm’s (specific) asset positions (such as the firm’s portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited. The importance of path dependencies is amplified where conditions of increasing returns exist. Whether and how a firm’s competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding internally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing internal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival’s costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.

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