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Dynamic Capabilities and Strategic Management

In: Essays In Technology Management And Policy Selected Papers of David J Teece

Author

Listed:
  • David J. Teece

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

  • Gary Pisano

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

  • Amy Shuen

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

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.

Suggested Citation

  • David J. Teece & Gary Pisano & Amy Shuen, 2003. "Dynamic Capabilities and Strategic Management," World Scientific Book Chapters, in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 4, pages 77-120, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789812796929_0004
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    Cited by:

    1. William Lazonick, 2006. "Corporate Governance, Innovative Enterprise, and Economic Development," WIDER Working Paper Series RP2006-71, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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