Introduction
There is a strong link between dynamic capabilities and knowledge management, an organisation with proper knowledge management will make use of it and when difficult times come it will have the ability to employ dynamic capabilities so as to overcome, it is also used to come up wit innovative ways that will keep production to the latest standards. The two complement each other and produce good results when applied together.
Dynamic Capabilities
Dynamic capability is a method routinely used by organisations to which help in development of some tactics applied like changing the base of resources to overcome difficult times. This involves making changes every now and then on resource use in order to match and meet the ever changing market demands and trends, this call for innovations that will match the current times.
According to Eisenhardt & Martin, (2000), “…this process involves the use of existing internally available resources to overcome turbulent times or external resources in the event of an overwhelming situation.” Some sectors like the technological world advance at a very fast pace, and this calls for equal pace in dynamism.
It is therefore important to for example, to retrain existing employees every time an organisation acquires any new form of technology since it is cheaper and ethical as compared to hiring new employees.
Sources
To ascertain an organisation’s dynamic capabilities there are three factors that come into play; the organisation’s process of sensing turbulence, the integration and learning on how to cope. The other factor is the history of the organisation and how they handled and managed to cope in previous difficult times.
Assets held by the organisation define how an organisation will fair during difficult times. Teece, Pisano, et al (1997) in discussing about capability development say that “Assets are vital for they come in handy in cushioning an organisation in turbulence since they positively influence the organisation’s ability to develop new capabilities.”
Knowledge Management
Knowledge management is a process of harnessing value from the knowledge held by the staff. Initially this process was confined to the information departments where the internet use and databases management were the core activities.
In their work, Bustinza, Molina et al (2010) argue that “this process has undergone a revolution and it is concentrating more on human organizational learning, which helps in the transfer of the best practices within the organisation.” This has a potential to generate substantial gains within the organisation in performance.
Different types of knowledge take different characteristics; the difficult bit of it is that some resources are scarce while others pose difficulties in replication or transfer.”
There is the explicit knowledge which takes a simpler form and is transferrable by observation and communication, i.e. plying piano, while the other form is the tactic knowledge that involves more complex form, this transfer is acquired through practice and application and hence its transfer is slow, time consuming and costly i.e. flying a plane.
Relationship
Dynamic capabilities are fuelled by knowledge management which is studied from its three core processes, Knowledge generation, integration, and knowledge reconfiguration. The first assist in tapping and harnessing knowledge, this is when an organisation embarks on recruiting experts to join their staff.
The second process involves combining diverse knowledge inside and out of the organisation, to come up with a stronger and more informed team. Every now and then there are changes in the market trends and demands, this exposes the organisation to new technology and hence the need to retrain and orient the staff with new innovations and this is dynamic reconfiguration.
For there to be success, there should be use of dynamic capabilities which employs the use of renewable resources like assets and human labour, in turn it propels organizational capabilities to produce goods or services. Dynamic capabilities emphasize on the role played by the management since they are the ones to instigate processes that will propel the organisation.
Capabilities should be placed on a hierarchical order and each should be utilised to make a contribution, when utilised well, there the organisation is bound to realize its competitive advantage. Thorough research is required so as to correctly place each manager in the field they will perform best.
At times there is need for both external and internal measures depending on the magnitude of the issue to be tackled, on the event where it is felt that internal measures will not effectively tackle the problem, external measures are taken.
Conclusion
Dynamic capabilities are fuelled by knowledge, first step is to learn about the organisation and the market environment so as to come up with informed choices. This call for leadership with the understanding and the capacity to set structures that will keep the organisation performing to the optimum. The management ought to be a breast with modern technology and innovations s as to make appropriate decisions.
Reference List
Bustina. F, Molina. L at-el. (2010) Organizational learning and performance: Relationship Between the dynamic and Operational capabilities of the firm. [On-line].
Eisenhardt. K, Martin. A (2000) Dynamic capabilities, what are they? [On-line].
Teece. D, Pisano G, at-el (1997) Dynamic Capabilities and Strategic management. [On-line].