Management Papers

Document Type

Journal Article

Date of this Version

10-2003

Publication Source

Strategic Management Journal

Volume

24

Issue

10

Start Page

991

Last Page

995

DOI

10.1002/smj.318

Abstract

Defining ordinary or “zero- level” capabilities as those that permit a firm to “make a living” in the short term, one can define dynamic capabilities as those that operate to extend, modify or create ordinary capabilities. Logically, one can then proceed to elaborate a hierarchy of higher-order capabilities (Collis 1994). However, it is argued here that the strategic substance of capabilities involves patterning of activity, and that costly investments are typically required to create and sustain such patterning – for example, in product development. Firms can accomplish change without reliance on dynamic capability, by means here termed “ad hoc problem solving.” Whether higher order capabilities are created or not depends on the costs and benefits of the investments relative to ad hoc problem solving, and so does the “level of the game” at which strategic competition effectively occurs.

Copyright/Permission Statement

This is the peer reviewed version of the following article: Winter, S. G. (2003), Understanding dynamic capabilities. Strat. Mgmt. J., 24: 991–995., which has been published in final form at doi: 10.1002/smj.318. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms.

Keywords

dynamic capabilities, change, cost-benefit, problem solving

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Date Posted: 27 November 2017

This document has been peer reviewed.