The Development of Dynamic Capabilities in Environments of Persistent Disturbances.

In this paper, we explore the creation and development of dynamic capabilities. In contrast to prior work, we argue that many environmental disturbances are repeated and not entirely new or stochastic. We argue that dynamic capabilities are developed in response to the more persistent aspects of these disturbances. Using the case study of the American automotive industry between 1965 and 2010, we draw a picture of the disturbances experienced by firms in this industry, such as labor disruptions, energy challenges, and economic cycles. We show inductively that firms first managed only to cope in the face of new disturbances by deploying existing dynamic capabilities that had been developed to address prior disturbances. Eventually these firms layered on new capabilities that improved the technical fitness of their dynamic capabilities. The interacting layers of capabilities that these firms built formed an architecture that further improved evolutionary fitness. This research contributes to prior work in dynamic capabilities, pointing to the importance of understanding how different types of environmental dynamism shape dynamic capabilities. [ABSTRACT FROM AUTHOR]