During the last decade, the capability-based view of competitive strategy which evolved within the broader Resource Based View of competitive strategy has emerged as a theoretical framework to explain heterogeneity in firm performance. In the early 1990s the need to distinguish capabilities from resources to provide a better explanation of >value creation paved the way for the capability-based view of competitive strategy. However the limitations of a 'static' or 'rigid' view of capabilities were soon the center of debate with the contributors arguing that the marketing opportunities that can be exploited will be limited by the assortment of capabilities at a firm's disposal. In addition, questions began to be raised as to the value of capabilities under rapidly changing environmental conditions. The dynamic capabilities view of competitive strategy that has gained prominence over the recent years had roots in this discussion. This view argues that firms need to reconfigure the assortment of capabilities to face the challenges presented by the fast changing business environment. However, the academic debate within the dynamic ca¬pability view on the conceptualization, measurement and the relationship between dynamic capabilities and firm performance is taking time to reach a consensus. We observe that this research stream in its infancy and however the debate is healthy. On the other hand, the lack of a common definition and disagreement on the effects of dynamic capabilities is holding back progress (Barreto, 2010; Helfat & Peteraf, 2009).
During the last decade, the capability-based view of competitive strategy which evolved within the broader Resource Based View of competitive strategy has emerged as a theoretical framework to explain heterogeneity in firm performance. In the early 1990s the need to distinguish capabilities from resources to provide a better explanation of >value creation paved the way for the capability-based view of competitive strategy. However the limitations of a 'static' or 'rigid' view of capabilities were soon the center of debate with the contributors arguing that the marketing opportunities that can be exploited will be limited by the assortment of capabilities at a firm's disposal. In addition, questions began to be raised as to the value of capabilities under rapidly changing environmental conditions. The dynamic capabilities view of competitive strategy that has gained prominence over the recent years had roots in this discussion. This view argues that firms need to reconfigure the assortment of capabilities to face the challenges presented by the fast changing business environment. However, the academic debate within the dynamic ca¬pability view on the conceptualization, measurement and the relationship between dynamic capabilities and firm performance is taking time to reach a consensus. We observe that this research stream in its infancy and however the debate is healthy. On the other hand, the lack of a common definition and disagreement on the effects of dynamic capabilities is holding back progress (Barreto, 2010; Helfat & Peteraf, 2009).
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