Dynamic Capabilities: A Review and Research Agenda

Introduction
Since the 1990s relentless competition has driven firms to constantly adapt, renew,
reconfigure and re-create their resources and capabilities in line with the competitive
environment. This is captured in the notion of dynamic capabilities (Teece et al. 1992,
1997; Eisenhardt and Martin 2000), which has provided an important impulse in
empirical research. Dynamic capabilities encapsulate wisdom from earlier work on
distinctive competence (Selznick 1957; Learned et al. 1969), organisational routine
(Nelson and Winter 1982), architectural knowledge (Henderson and Clark 1990), core
competence (Prahalad and Hamel 1990), core capability and rigidity (Leonard-Barton
1992), combinative capability (Kogut and Zander 1992) and architectural competence
(Henderson and Cockburn 1994). Empirical research illustrating evolution of firm
capabilities dates back before the 1990s (see, among others Fredrickson 1984, and
Eisenhardt 1989), and has flourished since then.
Yet, the search for an enhanced understanding of dynamic capabilities continues.
It is argued that in theory dynamic capabilities exhibit commonalities across firms
(Eisenhardt and Martin 2000). However, such commonalities have not been
systematically identified heretofore. Researchers refer dynamic capabilities to a wide
range of resources, processes and capabilities. As a result, the literature is featured by a
mixed use and interpretation of terminologies (Thomas and Pollock 1999). In addition,
empirical studies to date have primarily addressed firm- or industry-specific processes
pertinent to dynamic capabilities based on case studies. Thus far, research on dynamic
capabilities has been conducted on a piecemeal basis and research findings remain
disconnected. It is imperative to synthesise the conceptual debates and the diverse
empirical findings toward a more integrated understanding of dynamic capabilities. The
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