Dynamic Capabilities within the Project Management Environment

Abstract: Dynamic Capabilities is a contemporary popular notion, incorporating the ability to adjust a company’s resources adequately to exploit opportunities, prevent threats and consequently retain competitive advantage. Teece et al. (1997) coined Dynamic Capabilities and triggered a wave of research on the topic. However the notion is still in its infancy through academic disputes, different viewpoints and multiple definitions. Consequently tool, measure and procedures of Dynamic Capabilities are absent. Likewise the research on a project management level is scanty and just recently caught attention amongst scholars. To further tap into this research area, this study aims to analyse how project managers in Bayer AG can, and do, reinforce Dynamic Capabilities within their strategic projects. Nevertheless this is a difficult undertaking and other theories linked to the idea of Dynamic Capabilities were utilized to substitute and support this study.   The research is based on the definition of Zollo and Winter (2002) who divides Dynamic Capabilities into three main levels. Learning (level 2) is at the core of the notion and comprises of Knowledge Management activities. Dynamic Capability (level 1) denotes the possibility and flexibility to translate knowledge into practice through the adjustment and re-location of available resources. The final outcome is the adjustment of the operations (level 0) and the modification of on-going processes. However numerous scholars, including this study, exclude level 0 as Dynamic Capabilities and merely see it as the final outcome. To substitute the gaps in theory, support available concepts and extend the view on the levels, other theories such as Knowledge Management and Risk Management are enclosed.   Analysis of theory as well as the practical investigation of project managers from Bayer AG, revealed that knowledge exchange is the predominant driver of Dynamic Capabilities. While theory stipulates that IT software should be adequate enough to provide fast and easy access to information, project managers highlight that their main focus is on a culture encouraging personal, honest and open communication. Contradicting the idea of Dynamic Capabilities, a majority of project managers highlight that projects are locked after planning, neglecting change during execution. However, budgets are spaciously calculated providing flexibility to attain further resources when required. Additionally, Bayer provides a large pool of available resources, a culture encouraging communication and freedom of choice to their project managers. Merely detailed feasibility studies, monitoring processes and control mechanism are enforced to ensure successful project completion. The ultimate source of project success is implied to be practical experience. The theory of Dynamic Capabilities has aroused curiosity encouraging for further, deeper research on the topic.