Introduction
Dynamic strategic capabilities are actions which are undertaken by a firm to improve the overall performance of its key functions. Business firms need to understand critical issues that they are likely to face in industries they are operating in to understand how they are likely to impact on their performance.
A firm needs to be aware about market dynamics, government regulations and the level of competition it is likely to face from other firms that operate in the same industry.
More importantly, business firms need to make appropriate plans to come up with effective strategies that help them to make their operations more innovative. This paper will discuss the dynamic strategic capabilities framework and how it impacts on the operations of business firms in different industries.
Discussion
Dynamic strategic capabilities framework allows a business firm to make its operations more valuable by ensuring that its business practices conform to situations it faces in the industry. Therefore, a firm that takes this concept seriously is likely to be well prepared to deal with different challenges and opportunities it is likely to encounter.
Ambrosini and Bowman (2009) argue that the resource based view is an important concept that enables a firm to implement effective policies that increase the value of its products and business processes in the market.
This also allows an organisation to adopt effective change management practices in its operations to boost its long term performance. Therefore, every business firm needs to find out how it can strengthen the value of its brand in different markets by implementing appropriate changes in its operations.
Modern business firms understand how to set and change their strategic objectives to make them more responsive to changing consumer needs and expectations in the market. In addition, they need to adopt appropriate learning and knowledge transfer methods to make their internal and external operations more competitive in their respective industries.
This will help them to increase their general appeal in the industry thereby strengthening their competitive edge in the long run. The dynamic strategic capabilities concept enables a firm to know when it needs to adjust existing objectives to conform to its marketing, human resource and technology needs.
Therefore, this allows a firm to use information acquired from its business processes to develop high quality relationships with its customers in different markets.
Business firms need to streamline their internal operations by setting high quality standards to ensure their products are appropriate for customers’ needs (Houston, Ratneshwar, Ricci & Malter 2010, p. 29). As a result, this approach enables them to improve the quality of their business processes to help them attract more customers in the market.
The dynamic strategic capabilities concept allows a firm to evaluate the value it is likely to get from implementing appropriate information technologies in its operations. Therefore, this enables a firm to analyse how its important business processes can be aligned with sophisticated information technology solutions to increase its competitive advantage in the market.
Strategic alignment of IT with crucial business processes in a firm helps managers to plan various activities they want to achieve within specific time limits.
This also enables a firm to implement quality benchmarks in all its production processes to enable it to satisfy the needs and expectations of its customers (Baker, Cao, Jones & Song 2009, p. 11). For this approach to work, business and IT strategies must have a balanced effect on strategic planning to enhance the value of both internal and external organizational practices.
Firms need to understand how they can adjust to specific competitive factors in emerging economies to make their operations more effective in the long run. Therefore, this allows a firm to be aware about potential opportunities in the industry that have positive effects on its long term growth plans.
Changing consumer behaviour, entry of new firms into the industry and changes in government policies are some of the issues a firm needs to be aware of to find out how they affect its competitiveness.
This requires a firm to improve its ability to adapt to such changes to help it maintain its long term appeal in the industry (Zhou & Li 2010, p. 227). As a result, this allows a firm to be well prepared to deal with risks that arise from high competition and low profit revenues in the industry.
Organisational learning processes are vital in helping a firm to increase its understanding on the importance of dynamic strategic competencies. This requires a business firm to be more willing to improve the quality of its internal functions to make them conform to its long term vision in the industry. In addition, a firm needs to use strategic human resource management practices to identify important skills its employees need to acquire.
This also enables a firm to develop valuable relationships with its employees to make them more dedicated (Wang, Jaw & Tsai 2012, p. 1133). Business firms that have highly skilled employees who understand their responsibilities and general organisational expectations are likely to attain good outcomes in their workstations.
References
Ambrosini, V & Bowman, C 2009, ‘What are dynamic capabilities and are they a useful construct in strategic management?’, International Journal of Management Reviews, vol. 11, no. 1, pp. 29-49.
Baker, J, Cao, Q, Jones, D & Song, J 2009, ‘Dynamic strategic alignment competency: a theoretical framework and an operationalization’, Sprouts: Working Papers on Information Systems, vol. 9, no. 48, pp. 1-31.
Houston, MB, Ratneshwar, S, Ricci, L & Malter, AJ 2010, ‘Dynamic strategic goal setting: theory and initial evidence’, Review of Marketing Research, vol.7, pp. 19-62.
Wang, CY, Jaw, BS & Tsai, CHT 2012, ‘Building dynamic strategic capabilities: a human capital perspective’, The International Journal of Human Resource Management, vol. 23, no. 6, pp. 1129-1157.
Zhou, KZ & Li, CB 2012, ‘How strategic orientation influences the building of dynamic capability in emerging economies’, Journal of Business Research, vol. 63, no. 3, pp. 224-231.