Strategy in Turbulent Environment Continuous Innovation and Generic Dynamic Capabilities

Abstract

The strategy field is still a relatively young filed at the intersection of several other fields (economics, organizational theory, finance) that feed it and feed from it. Several strategy frameworks have been proposed to answer the fundamental question in the field: how do organizations achieve sustained competitive advantage? The most popular ones, although simple and easy to use, sacrifice complex realities for the sake of this simplicity. One of the most interesting and recent frameworks proposed is the concept of Dynamic Capabilities (Teece et al, 1997). Similar to the strategy field, it is still a young framework sitting at the intersection of several other theories such as Evolutionary Economics (with its key question “How do firms evolve over time?”), the Resource Based-View of the firm (trying to answer “Why and how are firms different?”) and Organizational Learning (looking for answers for “How firms capture and apply knowledge?”). Dynamic Capabilities (DCs) are technological, organizational, and managerial processes that firms leverage to build their competences. They have been described as being at the origin of core competences of organizations. We speculate that in turbulent environments strategies are exercised options linked to specific DCs. This article links strategy in turbulent environments with innovation through Dynamic Capabilities. We review this concept and propose an extension to it: Generic Dynamic Capabilities. What we mean by GDCs is that there seems to be DCs that can be used to generate multiple specific capabilities or competencies.