Easterby-Smith and Prieto (2008), in their article, note that dynamic capabilities are regularly placed as an extension of the resource-based view. This view claims that an organization has a different composition of tangible and intangible resources that result to the variations in organizations’ competitiveness and their performance.
The resource-based view has been criticized. It is static and cannot evolve together with the changing resources and capabilities that appear to an organization over time (Shipton 2006). On the other hand, dynamic capabilities come in handy for firms in turbulent environmental conditions because a firm has to be able to create, maintain and remake its sources of competitive advantage.
This view of dynamic capabilities concentrates on the current assets of a firm, its organizational processes and its history. The view assumes learning is a process by which repetition and experimentation increase the efficacy of performing tasks. This makes it dependent of the social networks within the firm and its environment.
The current view of dynamic capability outlined above has not been fully tested empirically. In addition, it fails to hold under extreme volatile environmental conditions. The uniqueness or similarity of dynamic capabilities of firms is yet to be determined.
Moreover, the extent of the reflection of dynamic capabilities, on the individuality of firms such as their idiosyncrasies and specific path dependencies is not clear. Firms have different bases for pursuing different competitive advantage paths because of their distinctiveness. In this regard, we note that the dynamic capabilities of a firm are important; however, the context of their deployment has a significant influence on the success of the deployment itself.
Contrary to concentrating on the deployment, another view revolves around the resources and organizational routines. This second view is torn between the observation of the resources or the routines that allow the reconfiguration of the resources. In hindsight, there exists a capability hierarchy of operational, then dynamic and finally learning capabilities.
Each level of the hierarchy is geared toward the other. The inclusion of learning in the hierarchy has been met with some resistance from scholars concerned about its role in the hierarchy. In one instance, learning appears to be specific to the identification of new opportunity, repetition and experimentation. On the other hand, learning appears to be a performance-relevant attribute.
The debate on learning’s position in the hierarchy is resolved by the argument that dynamic capabilities arise out of the learning, which shapes operational capabilities of a firm (Winter 2003). The above debate clearly differentiates dynamic and operational capabilities. It also affirms ‘dynamic’ as evolving and ‘capabilities’ as the potential.
Because of this realization, functional routines, such as those carried out in knowledge management, will lead to the possession of dynamic capabilities and the same functional routines also have dynamic capability (Bennet & Bennet 2008). Knowledge management relates to the identification, development and leveraging of the knowledge in organizations as a competitive advantage.
Debate on knowledge management rests on the question of whether knowledge is a personal experience or a distribution through communities of practice. Knowledge may be viewed as a possession or a practice. The tacit nature of organizational learning makes knowledge management success to focus on social processes.
In this regard, appropriate management of people, social networks and communities handles the problem of sharing tacit knowledge (Argote 2005). The arguments presented by Easterby-Smith & Prieto (2008) are correct in their description of the intergration of dynamic capabilities and knowledge managmeent.
In both, dynamic capabilities and knowledge management place a significant importance on knowledge resources on the firm’s competitiveness. Dynamic capabilities rely on the evolution of knowledge. Operational capabilities also incorporate the knowledge processes of exploration and exploitation and resources. This is done in as differential and complementary technological and marketing capabilities.
In conclusion, the degree of influence by knowledge management and dynamic capabilities of the competitiveness of the firm relies on many factors. These are resource conditions, firm conditions and the environmental conditions. These influences are understandable in their social context and cannot be fully grasped independent of the other.
Reference List
Argote, L. 2005, Organizational Learning: Creating, retaining and transferring knowledge. Springer, New York, NY.
Easterby-Smith, M and Prieto, IM 2008, ‘Dynamic Capabilities and Knowledge Management: an Intergrative Role for Learning?’ British Journal of Management, 19: 235-249.
Bennet, D and Bennet, A. 2008, Engaging tacit knowledge in support of organizational learning.’ VINE, 38(1):1-25.
Shipton, H. 2006, ‘Cohesion or confusion? Towards a typology for organizational learning research.’ International Journal of Management Reviews, 8(4): 233-252.
Winter, S. G. 2003, ‘Understanding dynamic capabilities’, Strategic Managment Journal, 10( 991-995): 20.