Dynamic Capabilities: What Are They?
Abstract
The resource-based view of the firm (RBV) is an influential theoretical framework for understanding how competitive advantage within firms is achieved and how that advantage might be sustained over time. This perspective focuses on the internal organization of firms, and so is a complement to the traditional emphasis of strategy on industry structure and strategic positioning within that structure as the determinants of competitive advantage. In particular, RBV assumes that firms can be conceptualized as bundles of resources, that those resources are heterogeneously distributed across firms, and that resource differences persist over time. Based on these assumptions, researchers have theorized that when firms have resources that are valuable, rare, inimitable, and nonsubstitutable (i.e., so-called VRIN attributes), they can achieve sustainable competitive advantage by implementing fresh value-creating strategies that cannot be easily duplicated by competing firms. Finally, when these resources and their related activity systems have complementarities, their potential to create sustained competitive advantage is enhanced.
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RBV's static nature limits its explanatory power in fast-evolving technological environments such as AI.
“However, RBV's static nature limits its explanatory power in fast-evolving technological environments such as AI (Agrawal et al., 2024; Eisenhardt & Martin, 2017).”
From Artificial Intelligence Adoption for Sustainable Development in SMEs: Challenges, Strategic Pathways, and Lessons for Developing Economies (2026) · cites this paper as Eisenhardt & Martin, 2017
This AI capability aligns with the DC framework, emphasizing SMEs' need to sense, seize, and reconfigure resources in rapidly evolving markets.
“This capability aligns with the DC framework, emphasizing SMEs' need to sense, seize, and reconfigure resources in rapidly evolving markets (Agrawal et al., 2024; Eisenhardt & Martin, 2017; Perifanis & Kitsios, 2023).”
From Artificial Intelligence Adoption for Sustainable Development in SMEs: Challenges, Strategic Pathways, and Lessons for Developing Economies (2026) · cites this paper as Eisenhardt & Martin, 2017
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- Authors
- Eisenhardt, K. M., & Martin, J. A.
- Affiliations
- Stanford University (US)
- The University of Texas at Austin (US)
- Venue
- The SMS Blackwell Handbook of Organizational Capabilities
- Publisher
- Wiley
- Published
- 2017-08-18
- Pages
- 341-363
- OpenAlex
- W3125814141
- Cited by
- 368
- References
- 92
- Citations by year
- 2026: 148 · 2025: 27 · 2024: 5 · 2023: 6 · 2022: 5 · 2021: 5 · 2020: 3 · 2019: 4 · 2018: 4 · 2017: 2 · 2016: 11 · 2015: 20 · 2014: 17 · 2013: 20 · 2012: 24
- Type
- other
- Language
- en
- Open access
- closed
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Social Sciences › Business, Management and Accounting › Strategy and Management › Intellectual Capital and Performance Analysis
- Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Human Resource and Talent Management
- Keywords
- dynamic capabilities, resource-based view, competitive advantage, resource complementarity, sustainable competitive advantage, firm resources, strategy theory
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