Recent strategic management literature has suggested the age of sustainable competitive advantage has ended, that we instead live in the age of temporary advantage. However, dynamic capabilities, routines that adapt resources, are considered to be a source of sustainable competitive advantage. This paper addresses a gap in the literature by proposing a theory of individual level dynamic capability development. This paper also proposes dynamic capabilities which are organized by the four dimensions of the learning orientation construct are positively associated sustainable competitive advantage.

1. LEARNING ORIENTATION –
DYNAMIC CAPABILITY
DEVELOPMENT
Presented at AOM Conference 2011, San
Antonio, TX

2. The Age of Temporary
Advantage
 Recent scholars suggest we now
live in the age of temporary
advantage (D’Aveni, Dagnino, &
Smith, 2010)
Miller (2003) suggests firms should
be looking for an attainable
competitive advantage

3. Why Dynamic Capabilities
Firms continue to search for
sources of creating and sustaining
competitive advantage
Teece, Pisano, and Shuen (1997)
proposed that dynamic capabilities
offer the potential such advantage

4. Defining Dynamic Capabilities
 Dynamic Capability:
Teece, Pisano, and Shuen (1997)
- put “dynamic” and “capability”
together
- Defined it as an “ability” to
reconfigure internal and
external “competencies” in rapidly
changing environments

5. Defining Dynamic Capabilities
 Dynamic Capability:
Eisenhardt and Martin (2000)
- Referred to the strategic nature
- Defined it as processes to
reconfigure that match or
even create market change.

6. Defining Dynamic Capabilities
 Dynamic Capability:
Zollo and Winter (2002)
- Referred to the strategic nature
- Defined it as “patterns” to modify
operations to create greater
effectiveness.
- Introduced “develop” and
“developing” into their hypotheses
but never defined the construct of
dynamic capability development.

7. Defining Dynamic Capabilities
 Development:
Zollo and Winter (2002)
- Development of routines stem
from
(1) experience accumulation,
(2) knowledge articulation, and
(3) knowledge codification
processes

8. Dynamic Capability
Development
Dynamic Capability Development
(D.C.D.):
The extent to which the members
of a firm purposefully generate
routines to integrate, reconfigure,
gain and release resources.
Note: This is a new construct.

9. Learning Orientation
Learning Orientation (a firm level construct)
has four dimensions as defined by Calantone,
Cavusgil, and Zhao, (2002):
(1) Shared Vision
(2) Commitment to Learning
(3) Intra-organizational Knowledge Sharing
(4) Open Mindedness

10. Relationship of IC’s/DC
Commitment to
Learning
Shared Vision Dynamic
Capability
Intraorganizational Development
Knowledge
Sharing
Open-Mindedness

11. Commitment to Learning
Defined
Commitment to Learning:
the extent to which an organization
emphasizes learning.

12. Commitment to Learning –
D.C.D.
Penrose (1959): unknown and unused productive
services immediately become of considerable
importance… because they shape the scope and
direction of the search for knowledge (page 77)
As the search for knowledge is shaped and
directed, dynamic capabilities develop.

13. Proposition 1
 Commitment to learning is positively associated
with dynamic capability development.

14. Shared Vision
 Sinkula et al. (1997) explain that a
shared vision influences the direction
of learning within an organization.
 Calantone, Cavusgil, and Zhao
(2002) state that shared vision refers
to an organization-wide focus on
learning.

15. Shared Vision Defined
Shared Vision:
the extent to which an organization
promotes learning focused on its
desired future state.

16. Shared Vision – D.C.D.
 Suchman’s (1995): legitimacy is a generalized
perception or assumption that the actions of an entity
are desirable, proper, or appropriate within some
socially constructed system of norms, values, beliefs,
and definitions (page 574).
 The shared vision of the firm is such a socially
constructed system.
As an organization promotes learning based on its
shared vision, it will begin to develop strengths and
competences (Calantone et al. 2002).
Some of those strengths and competences will develop
as dynamic capabilities.

17. Proposition 2
 Shared vision is positively associated with
dynamic capability development.

18. Intra-organizational Knowledge Sharing
Defined
Intra-organizational Knowledge
Sharing:
the extent to which an organization
promotes learning focused on its
desired future state.

19. Proposition 3
 Intra-organizational knowledge sharing is
positively associated with dynamic capability
development.

20. Open-Mindedness Defined
Open-Mindedness:
The extent to which an organization
is willing to proactively question its
past routines, assumptions, and
beliefs.

21. Open Mindedness – D.C.D.
 As firms regularly reconsider their operations,
they are more likely to develop routines to
consider how they might reconfigure their
resources.
 In other words, open mindedness would lead
dynamic capability development.

22. Proposition 4
 Open-mindedness is positively associated with
dynamic capability development.

23. Dynamic Capabilities and
Sustainable Competitive
Advantage
 Critics have suggested that the resource-based
view implies infinite regress, but a recent review
of these critiques (Kraaijenbrink, Spender, &
Groen, 2010) concluded that within a few levels of
abstraction, such extension loses its connection
with reality.
 Instead, the importance of such higher-order
capabilities (i.e., dynamic capabilities) is their
interaction with lower order capabilities.

24. Dynamic Capabilities and
Sustainable Competitive
Advantage
 Teece (2007) refers to such interactions as
metacompetences, which Kraaijenbrink and
colleagues (2010) liken to single and double-loop
learning.
 We suggest that members of a firm apply the
elements of a learning orientation to organize
dynamic capabilities more effectively.
 Improving a lower-order competence could then
improve firm’s advantage.

25. Proposition 5
 Dynamic capabilities organized under the learning
orientation construct will be positively associated
with sustainable competitive advantage.

26. Implications for Scholars
Previously, work on dynamic capabilities has been
focused at the firm level. Here we acknowledge that
such
capabilities must exist within the members of a firm.
Few articles have considered where dynamic
capabilities
originate. In this article, we suggest that they stem
from
the organized learning of a firm.

27. Implications for Practice
Change in any environment is inevitable, and in
today’s
world, it is fairly constant. For organizations,
change must
be managed to reduce and avoid waste of
resources.
To understand the changing environment,
organizations
must commit to learning.
By organizing the learning of a firm, members can
develop routines to make change more effective,