Dynamic Capabilities as Change Capabilities: Seeking Concreteness From a Different Point of View
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School of Business |
Master's thesis
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Date
2020
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Mcode
Degree programme
Strategy
Language
en
Pages
125
Series
Abstract
No business is free of change and in the modern times changing business environment and -technology are more of a rule than an exception. To survive and thrive in changing environments organizations need to be able to change and maintain competitiveness under such conditions. Problem is how to determine the organization’s capability to do these. The dynamic capabilities model was developed as response to the question about creating and maintaining competitive advantage under conditions of change, but the model is still lacking with many disagreements in the literature. As maintaining competitive advantage in a changing environment is inherently tied to change in the organization, this thesis sought to utilize and test the usability of the dynamic capabilities as a tool to evaluate organization’s change capabilities contributing to both dynamic capabilities literature and change literature. In the process a model of concrete elements of the dynamic capabilities needed to be assembled based on available literature. This thesis was conducted as a single case study of a single large Finnish cooperative financial group that was engaging in large change initiatives both before and during the study, especially two large and distinctly different kinds of change driven by two separate executive directors. Five employees from one of the firms inside the group were interviewed in addition to the group’s public quarterly and annual reporting between 2013 and 2019. Much of the material was analysed using GIOIA method to ensure sufficient rigor in the analysis. In the end the study could draw a clear connection between some elements of dynamic capabilities, changing environment and organizational changes. Both of the two major groupwide change processes for example were preceded by significant sensing activities both externally and internally. With several other elements the connection could not be demonstrated quite as strongly. They were not a visible key point in a major change effort. There were however many lighter or indirect indications of their value. The ongoing organizational change towards more decentralized power and autonomy, attributes supported by dynamic capabilities literature, has not yet proven itself as key factor of other changes but in interview it was described as speeding development work among other positive expressions. There were similarly suggestions of lacking in a proposed dynamic capability element being a “braking factor” when discussing maintaining of technological competences. These findings support the proposal of using dynamic capabilities as identified here as change capabilities, but further research of more organizations and different change situations would be required to consider this proposition proven.Description
Thesis advisor
Derin, KentKeywords
dynamic capabilities, organizational change, changing business environment, change capabilities