Dynamic Capabilities

This Element relates dynamic capabilities, the leading paradigm in strategic management, to key legacy concepts in business and economics.

This Element relates the dynamic capabilities framework to many important concepts from the business and economics literature, demonstrating how the framework applies to today's business challenges. It also offers the capabilities perspective on a theory of the firm. This title is also available as Open Access on Cambridge Core.The dynamic capabilities framework outlines the means by which the managers of business enterprises foster and exercise organizational and technological capabilities and business strategy to address current and anticipated market and geopolitical conditions. In a firm with strong dynamic capabilities, managers can establish and periodically renew the competitive advantage of the business enterprise by not just responding to but shaping the business environment. This Element relates the dynamic capabilities framework to important concepts from the business and economics literature, demonstrating how it applies to today's business challenges. It also offers a capabilities perspective on a theory of the firm. Most existing theories of the firm caricature today's business enterprise. For advanced students of business, this Element provides a deeper understanding of the dynamic capabilities framework. For managers and boards, it shows how the analytical tools and mindsets that help to make their firms future-ready can be better understood in terms of the dynamic capabilities framework. This Element is also available as Open Access on Cambridge Core.