Analyzing dynamic capabilities via fuzzy cognitive maps

Abstract

Today, free trade, internet, and mobile technologies have given rise to global markets with high levels of change. In order to survive in such fluid environments, firms need to be able to quickly adapt themselves to rapid changes. The concept of “dynamic capabilities” deals with the organizational capacity to understand the need for change, plan response to change, and finally, implement these plans. Although dynamic capabilities are crucial for the survival of an organization, there is no comprehensive study of the factors related to dynamic capabilities and their effect on a firm’s success. Complexity and vagueness of these concepts precludes developing a comprehensive model. The computational intelligence techniques such as fuzzy models, artificial neural networks, and genetic algorithms can be utilized to handle this complexity and vagueness. Therefore, a Fuzzy Cognitive Map based (FCM-based) model is proposed in this chapter to overcome the modeling difficulty. The factors related to dynamic capabilities, which are collected from an extensive literature review, are defined as concepts and their fuzzy relations are represented as causal links in a graph structure.