Case Procter & Gamble: 188 years of dynamic capabilities development. A longitudinal case analysis

The aim of this paper is to analyse marketing capabilities, through the dynamic capabilities framework, in order to increase understanding of how gradual global SMEs operating in traditional sectors can improve their export performance.The work is based on the exploratory, descriptive, qualitative method of a case study. An Italian SME has been selected on the basis of its export performance and marketing activities. The study has been conducted through secondary data analysis and a semi-structured in-depth interview with the CEO, with the aim of highlighting the relevance of emerging dynamic marketing capabilities connected with international performance.The results show that a SME, which lacks resources for international expansion, can improve its export performance by adapting, integrating, building, and reconfiguring its existing internal and external marketing capabilities for international markets.The principal limitation of this work is that, by analysing a company belonging to the alcoholic beverage sector, where price decisions are often left to importers, it was not possible to analyse dynamic pricing capabilities. This paper offers a contribution to the discussion of the internationalization of gradual global SMEs from the perspective of marketing and dynamic capabilities, missing from the literature, which is mainly focused on the study of multinational and born global enterprises.

Inside the Black-box: Analysing the Generation of Core Competencies and Dynamic Capabilities by Exploring Collective Minds. An Organisational Learning Perspective** The paper combines resource-based thinking with perspectives from theories of organisational learning and knowledge management. According to the resource-based view (RBV) strategy can be defined as emergent pattern of interaction generating core competencies and dynamic capabilities. These processes of interaction and their relation to core competencies and dynamic capabilities are of major concern in the presented analysis. A synthesis with learning theories further leads to the basic assumption that processes of knowledge identification, knowledge diffusion, knowledge integration and the enactment of the environment are critical for generating core competencies. Moreover, learning theories show how to approach the causal ambiguityargument that is important in the explanation of core competencies given by RBV. It will be argued that the analysis of the shared mental model of the organisational members is a method to explore critical processes for generating core competencies. A related research instrument will be validated in a case study analysis that was conducted in a medium-sized enterprise aiming at testing the instrument and the aforementioned basic assumption. The instrument can explore the critical processes in which the generation of core competencies and dynamic capabilities is embedded in. It provides a better understanding of the critical processes within the organisation than the RBV. Key words: Causal ambiguity, collective minds, competitive advantages, core competencies, dynamic capabilities, knowledge management, organisational learning, resource-based view, strategic processes 1. Introduction The resource-based view (RBV) of the firm has been thoroughly discussed in strategic management literature. The basic assumptions of this approach have been developed further during the last twenty years, specified for certain organisational functions and validated in hundreds of empirical analyses (see Barney/Arikan 2001; Rouse/Daellenbach 2002; Ray/Barney/Muhanna 2004). As a consequence, the RBV became a leading paradigm in strategic management (Wernerfelt 1995; Bresser 1998). Even though there is considerable theoretical and empirical progress in resourcebased research shortcomings still exist in the theoretical underpinnings of the approach. These restrict related empirical investigations that try to measure critical resources and processes for sustainable competitive advantages. One of the major shortcomings of the RBV is the fact that the organisation remains a black-box even though it is considered as the source of organisational success (Ortmann/Sydow 2001; Priem/Butler 2001). There is a lack in explanations of how heterogeneity arises (Helfat/Peteraf 2003: 997). This is not only a limitation in the eyes of those who regard the RBV as a theory of competitive advantage - if the major interest relies on rules for richness, the causal ambiguity argument of the RBV is somehow dissatisfying. Causal ambiguity means that the link between the resources controlled by a firm, internal processes and sustained competitive advantages can neither be attributed from outside nor from organisational members (Barney 1991). Rather, the causal ambiguity paradox - even though it is inspiring - veils the view on organisational internal processes that might have a strategic impact. The RBV does not only lay emphasis on the internal organisation but also limits a deeper understanding of organisational internal strategic processes. For a further development of strategy research a broader perspective of social action within and between organisations as well as between organisations and environments is essential. As Mintzberg (1978, 1994) points out these processes of forming a pattern of strategic action have been neglected in strategy research (see also Quinn 1984). …

Purpose This study examines how intellectual capital components – human, structural, relational and renewal capital (RNC) – impact service innovation performance (SIP) in Chinese management consulting firms. It also investigates the mediating role of dynamic capabilities (DCs) in transforming intellectual capital into innovative service outcomes. The research aims to provide a comprehensive understanding of how consulting firms can strategically leverage their intangible resources and organizational capabilities to sustain a competitive advantage in a rapidly evolving market. Design/methodology/approach The study employs a quantitative research design using survey data from Chinese management consulting firms. Structural equation modeling is utilized to test relationships between intellectual capital dimensions, DCs and SIP. The analysis focuses on the direct effects of human, structural, relational and RNC on innovation, as well as the mediating effect of DCs. This empirical approach integrates theories from the resource-based view (RBV), enterprise capability theory and service innovation literature. Findings Results indicate all four intellectual capital components positively and significantly influence service innovation, with RNC exerting the strongest effect. DCs mediate these relationships by enabling firms to sense opportunities, seize them and reconfigure resources effectively. Human capital (HC) fosters creativity; structural capital supports knowledge management; relational capital enhances client collaboration and RNC drives continuous learning and adaptability. The findings confirm that strategic orchestration of intellectual capital through DCs is essential for sustaining innovation in consulting services. Research limitations/implications The study is limited by its focus on Chinese consulting firms, which may restrict generalizability to other cultural or industry contexts. The cross-sectional design limits causal inferences, suggesting longitudinal studies for future research. Measurement of intellectual capital and DCs relies on self-reported data, which may introduce bias. Further research could explore sector-specific variations, incorporate qualitative insights and examine external environmental factors influencing the intellectual capital innovation relationship. Despite limitations, the findings offer valuable insights for theory development and practical innovation management in knowledge-intensive service industries. Practical implications Consulting firms should invest in targeted HC development, advanced knowledge management systems and robust client relationship management to drive service innovation. Emphasizing continuous learning and renewal through research and development, foresight activities and collaborative partnerships is critical. Firms must enhance DCs by adopting agile project management and digital tools to quickly sense, seize and reconfigure resources. An integrated innovation strategy combining intellectual capital development with capability building helps firms remain competitive and responsive to rapid market changes. These practices foster sustained innovation, improved client satisfaction and organizational resilience. Social implications By enhancing service innovation, consulting firms contribute to more effective and customized solutions for client organizations, potentially improving overall business performance and economic growth. The promotion of continuous learning and talent development supports workforce skill advancement and knowledge diffusion within the industry. Trust-based client relationships foster transparency and collaboration, encouraging ethical business practices. Additionally, innovation driven by intellectual capital and DCs can lead to sustainable consulting services that better address complex societal challenges. These outcomes collectively promote a knowledge-based economy and strengthen the social fabric of professional service ecosystems. Originality/value This study uniquely integrates intellectual capital theory, DCs and service innovation theory to offer a holistic framework explaining innovation performance in consulting firms. It empirically validates the mediating role of DCs in converting intellectual capital into service innovation, extending the RBV with capability orchestration. By focusing on the Chinese management consulting context, the research provides culturally relevant insights into intangible resource management. The multi-theoretical model advances academic understanding and offers actionable strategies for practitioners to enhance innovation through coordinated development of human, structural, relational and RNC alongside dynamic organizational capabilities.

Dynamic information technology capability: Concept definition and framework development

Applying the resource-based view (RBV), this article examines two organisational capabilities in the hotel distribution sector: strategic alignment and dynamic capabilities. Exploratory interviews conducted with business managers (BMs) and technology managers (TMs) from the hotel sector allowed to operationalise three constructs used in this research: the maturity of strategic online alignment, the maturity of dynamic online capabilities, and organisational performance. A subsequent questionnaire survey administered among BMs and TMs from 101 hotels in Morocco then allowed to validate the three hypotheses of this research: H1 Strategic alignment maturity has a direct and positive effect on the maturity of dynamic online capabilities; H2 The maturity of dynamic online capabilities is significantly linked to organisational performance; H3 The maturity of strategic online alignment is significantly linked to organisational performance.

Decision-making in complex innovation ecosystems, such as European Digital Innovation Hubs (EDIHs), involves navigating strategic and ethical dilemmas that challenge conventional leadership models. Despite EDIHs’ growing role in Europe’s digital transformation, limited research explores how leaders manage conflicting priorities in these multi-stakeholder environments. This study examines how dilemma-based decision-making shapes innovation leadership and dynamic capabilities in EDIHs.Grounded in Hampden-Turner’s (1990) dilemma theory and Teece’s (1997, 2007) dynamic capabilities framework, the study employed a qualitative survey with 20 responses. The survey assessed leadership models, adaptability, resilience, and strategic decision-making. Findings reveal that leaders frequently face tensions—such as balancing financial sustainability with ethical neutrality, or short-term KPIs with long-term ecosystem impact. Their ability to reconcile these dilemmas is vital for fostering innovation, trust, and resilience. Leadership in digital innovation ecosystems demands agility, foresight, and integrity (Gorelova et al., 2024; Tigre et al., 2025). Leaders must possess creativity, innovation, and an entrepreneurial mindset to guide dynamic ecosystems effectively (Taylor et al., 2025; Ercantan et al., 2024). Ethical dilemmas, as defined by Fernando (2009), involve choices between alternatives that affect both stakeholders and organizational competitiveness. In EDIHs, these dilemmas are amplified by the need to balance public trust, technological neutrality, and commercial viability. Leaders’ decisions are shaped by values, cultural context, and their ability to interpret dynamic environments, aligning with ethical leadership and moral sensitivity in complex systems (Arar & Saiti, 2022).The European Digital Innovation Hubs network, launched in 2023, supports SMEs and public sector organizations in adopting advanced digital technologies. Covering nearly 90% of European regions (168 EDIHs), the network offers services in AI, cybersecurity, and high-performance computing. By September 2024, over 200,000 participants had engaged in more than 5,000 events, through which over 18,000 services were delivered. The Digital Maturity Assessment Tool (DMAT) shows that companies follow a structured path toward digitalization, with strategy and human-centric approaches becoming increasingly important at higher maturity levels. After receiving support from EDIHs, 90% of companies improved their digital maturity scores (Carpentier et al., 2025).This study contributes to bridging leadership theory, innovation management, digital ecosystems, and entrepreneurship research. It addresses a critical gap in understanding how leaders in digital ecosystems navigate dilemmas and leverage dynamic capabilities to foster innovation, trust, and transformation. Hampden-Turner’s (1990) dilemma reconciliation model emphasizes integrating opposing perspectives rather than seeking compromises. This approach enables leaders to transform conflicting values into creative solutions that support both value creation and long-term sustainability. The findings suggest that dilemma-based decision-making is not a barrier but a catalyst for innovation leadership. Leaders who can reconcile tensions—between innovation and regulation, neutrality and commercial interest, or short-term metrics and long-term vision—are better equipped to build resilient ecosystems. These insights are particularly relevant for policymakers, ecosystem designers, and innovation leaders aiming to strengthen the role of EDIHs in Europe’s digital future.ReferencesArar, K., & Saiti, A. (2022). Ethical leadership in complex systems. Journal of Educational Administration, 60(3), 345–360.Carpentier, A., et al. (2025). Digital Maturity Assessment Tool: Impact of EDIHs on SME transformation. European Commission Report.Ercantan, A., et al. (2024). Entrepreneurial mindset in digital ecosystems. Technology Innovation Journal, 18(2), 112–129.Fernando, M. (2009). Ethical decision-making in organizations. Journal of Business Ethics, 90(3), 371–383.Gorelova, L., et al. (2024). Leadership agility in digital transformation. European Management Review, 21(1), 55–72.Hampden-Turner, C. (1990). Charting the Corporate Mind: From Dilemma to Strategy. Blackwell.Msila, V. (2024). Janusian thinking in leadership. Leadership and Change Quarterly, 12(1), 88–101.Taylor, R., et al. (2025). Innovation leadership in European ecosystems. Innovation & Strategy Review, 33(4), 205–223.Teece, D. J. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.Teece, D. J. (2007). Explicating dynamic capabilities. Strategic Management Journal, 28(13), 1319– 1350.Tigre, P., et al. (2025). Multi-stakeholder collaboration in digital hubs. Digital Policy Studies, 9(2), 144–160.

In this special issue, we have collected 13 articles that offer new vantage points for research on dynamic capabilities. We offer a selection of thought-provoking papers that advance current thinking on dynamic capabilities and provide directions for new inquiries using the dynamic capability framework. The microfoundations of dynamic capabilities have increasingly received interest. This special issue offers a range of conceptual methodological approaches to deepen our understanding of the issues surrounding the microfoundations of dynamic capabilities.

Recent years, Enterprise Dynamic Capabilities is considered as a key of the firm's competition, the more dynamic the competing environment is, and the strategy-making dynamic capabilities of the enterprise are more important. We argue that the dynamic capabilities theory (DCT) is a logical extension of the resource-based view (RBV), and then, we design an identifiable framework of dynamic capabilities, which is based on the interaction-space view, and provide an approach for the application of DCT and RBV.

This article builds theory at the intersection of ecological sustainability and strategic management literature—specifically, in relation to dynamic capabilities literature. By combining industrial organization economics–based, resource-based, and dynamic capability–based views, it is possible to develop a better understanding of the strategies that businesses may follow, depending on their managers’ assumptions about ecological sustainability. To develop innovative strategies for ecological sustainability, the dynamic capabilities framework needs to be extended. In particular, the sensing–seizing–maintaining competitiveness framework should operate not only within the boundaries of a business ecosystem but in relation to global biophysical ecosystems; in addition, two more dynamic capabilities should be added, namely, remapping and reaping. This framework can explicate core managerial beliefs about ecological sustainability. Finally, this approach offers opportunities for managers and academics to identify, categorize, and exploit business strategies for ecological sustainability.

Accounting information systems (AIS) capture and process accounting data and provide valuable information for decision makers. However, in a rapidly changing environment, continual management of the AIS is necessary for organizations to optimize performance outcomes. We suggest that building a dynamic AIS capability enables accounting process and organizational performance. Using the dynamic capabilities framework (Teece 2007) we propose that a dynamic AIS capability can be developed through the synergy of three competencies: having (1) a flexible AIS, (2) a complementary business intelligence system, and (3) accounting professionals with IT technical competency. Using survey data, we find evidence of a positive association between a dynamic AIS capability, accounting process performance, and overall firm performance. The results suggest that developing a dynamic AIS resource can add value to an organization. This study provides guidance for organizations looking to leverage the performance outcomes of their AIS environment.

Linking manufacturing digitalization and technological Innovation: The mediating role of dynamic capabilities

Purpose– Prior studies have argued that small firms with dynamic capabilities can revise and reconfigure their internal resources to meet the uncertainties of their business environment. However, there is a lack of understanding of how they can develop such critical capabilities. The purpose of this paper is to propose that small firms can employ information and communication technology (ICT) capabilities as a facilitator for developing dynamic capabilities. Thus, the study builds on resource-based view (RBV) literature and information systems (IS) literature by examining the influence of ICT capabilities on the dynamic capabilities of small firms.Design/methodology/approach– Several hypotheses were tested by analysing the survey data from 291 small high-technology firms in Sweden.Findings– The results reveal that ICT capabilities influence dynamic capabilities of small firms. More specifically, the ICT use for internal efficiency positively influences adoptive capabilities, collaborative use of ICT positively influences networking capabilities, and ICT use for communications positively influences both adaptive and innovation capabilities. Consequently, the results suggest that the different components of ICT capabilities facilitate the development of the different organizational capabilities that together represent dynamic capabilities and thus, can contribute to a small firm’s competitive advantage.Practical implications– This study has few implications for the managers and CEO’s of small high-technology firms. First, by prioritizing ICT capabilities, small firms can benefit from the development of dynamic capabilities that will support them to meet the challenges of turbulent business environment. Second, because small firms usually lack internal resources (i.e. financial resources and competence), the study provides more specific direction on how they can strategically invest and build different components of ICT that will positively influence their adaptive, absorptive, innovative, and network capabilities.Originality/value– The study provides an alternative view of how ICT capabilities influence the performance of small firms, and outlines how such capabilities influence the development of dynamic capabilities. Therefore, the study in hand contributes to the RBV and IS literature by specifically linking the components of ICT capabilities to dynamic capabilities and its related sub-capabilities.

PurposeThe purpose of this paper is to identify the role of dynamic capabilities for the survival of family-owned business (FOB) in Pakistan. The paper aims at examining the impact of digitization on business landscape for FOBs.Design/methodology/approachData for this research were collected using in-depth interviews. About 24 interviews were conducted with the owners of 24 FOBs in four different states of Pakistan. Interviews were translated and transcribed. By using GIOIA methodology, first-order concepts, themes and aggregate dimension were identified that explained the additional dynamic capabilities needed for family businesses in digital era.FindingsThe results of the data analysis revealed that family businesses are struggling to cope with thriving digital market. Digital mind-set is needed to survive in the market. The ability to respond to change is needed. The intelligence and wisdom needed for creating and maintaining an intellectual asset should be used by investing in new technologies. Importantly, businesses need to maintain an emotionally and artificially intelligent brand.Research limitations/implicationsThe research is based on four different states of Pakistan. By focussing on each state could generate more data. The research is focussed on Pakistan to know about the dynamics of emerging economies. Replicating same research on other developing countries can bring more results. Lastly, it is a purely qualitative research. A quantitative analysis could bring a new context to the problem.Practical implicationsUnderstanding the challenges of family businesses for coping in digital market helps other family businesses to get a know-how before entering the market. Digital presence can help in building the brand but when not handled correctly can damage the brand as well. Investing in additional capabilities can provide a competitive advantage to family businesses. Family businesses possess a passion for the idea which helps to build the narrative for the brand.Originality/valueThis research is contributing to highlight the scenario of an emerging economy by studying the challenges of FOB in digitization. The literature provides more information and theories regarding developed countries. This research is a picture of developing economy and how wave of digital era has transformed the business landscape. In-depth interviews were conducted for deep insights which helps in contributing towards family business research.

Guided by the resource-based view and dynamic capabilities theory, this study investigates the roles of market orientation (MO), entrepreneurial orientation (EO), environmental munificence (EM), and complexity (EC) in shaping crisis adaptiveness and firm performance. The study gathered data from 656 small-to-medium-sized enterprises (SMEs) located in the greater Kuala Lumpur area shortly after the easing of pandemic-related restrictions. The hypotheses were examined through the application of partial least squares structural equation modeling (PLS-SEM). The empirical results indicate that crisis adaptiveness mediates the MO-performance, and EO-performance links, with the individual direct pathways among these variables also remaining significant. Furthermore, EM weakened the direct effect of crisis adaptiveness on firm performance. EC positively moderated EO’s direct and indirect effects on crisis adaptiveness and firm performance. Entrepreneurs can leverage these insights to develop proactive crisis management strategies and cultivate a culture of innovation and market responsiveness within their businesses to remain agile, resilient, and adaptive to unpredictable market forces. Additionally, policymakers and business consultants can use these findings to tailor support programs that enhance SMEs’ crisis adaptiveness, particularly by fostering proactive, innovative, risk-taking behaviors and resource reconfiguration. By integrating the resource-based and dynamic capabilities paradigms, this study not only bridges the gap between MO, EO, crisis adaptiveness, and firm performance but also provides actionable insights for strengthening SMEs’ strategic positioning in uncertain environments.

Taking the resource-based view –RBV- and the dynamic capability view –DCV- as an orientation, the main aim of this study is to develop the mediator role that competitive advantages play in the relations between strategic resources, dynamic capabilities and performance. The study takes place in a dynamic and changing sector: the sale of new cars in Portugal. The results show that (a) achieving competitive advantages, which are decisive for business results, depends on the available strategic resources and the generating of dynamic capabilities, (b) in dynamic and changing sectors strategic resources are essential to generate dynamic capabilities, (c) firms must center their attention on, more than results, the generating of sustainable competitive advantages as these act as a mediator variable of the effect of strategic resources and dynamic capabilities on performance. The data scrutiny uses structural equation modeling (SEM) through PLS as the statistical instrument. The sample comprises 89 firms which sell new cars in Portugal.