Dynamic capabilities

Jeffrey A. Martin and Athina Skiadopoulou

Chapter 3 in A Guide to Key Theories for Strategic Management, 2026, pp 44-66 from Edward Elgar Publishing

Abstract: This chapter offers a comprehensive synthesis of dynamic capabilities theory as a central framework in strategic management for understanding how firms adapt and sustain competitive advantage in dynamic environments. Building on critiques of the resource-based view, it shifts attention from resource ownership to the organizational processes through which firms reconfigure, renew, and extend their resource base. It outlines core components of the theory, particularly the microfoundations of sensing, seizing, and transforming, and situates dynamic capabilities in relation to adjacent theories, such as the behavioral theory of the firm, organizational learning, and real options. Beyond this, the chapter highlights recent developments, including dynamic managerial capabilities and multilevel frameworks that link individual, team, and organizational-level change. Finally, it reviews ongoing empirical challenges and methodological progress in the field. Together, these insights provide a structured foundation for future research on dynamic capabilities and strategic adaptation under conditions of change and uncertainty.

Keywords: Dynamic Capabilities; Dynamic Managerial Capabilities; Strategic Adaptation; Resource-based View; Organizational Routines; Resource Reconfiguration (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035342846
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