Dynamic Capability : The Advancement of a Framework

Abstract: This thesis sets out to explore the concept of dynamic capability which centers on the firm’s ability to sustain competitive advantage in dynamic environments. Drawing on a review of the literature, a framework of general factors conducive to a dynamic capability – absorptive capability, adaptive capability and innovative capability – is identified. Since the framework has not been explored empirically, this thesis takes the first step in this pursuit. The phenomenon is investigated in a case study comprised of three firms in the information and communication industry. Data is collected from interviews with representatives of the firms and from the last annual reports of the firms. Drawing on the analysis of the data, it is suggested that the specific operationalization of the factors should be refined. Nonetheless, the study suggests that the framework comprises a straightforward and efficient means of analysing a firm’s ability to sustain competitive advantage.