Revisiting the idea of knowledge-based dynamic capabilities for digital transformation

PurposeAccording to reputation theory, enterprises that adopt a proactive approach to corporate social responsibility (CSR) are known to actively invest in corporate innovation. However, this theory does not fully explain the mechanisms through which CSR influences corporate innovation, nor does it address how to effectively amplify CSR’s positive impact on innovation. To overcome these limitations, this research aims to incorporate the theories of innovation investment and dynamic capabilities. Innovation investment theory elucidates how CSR can attract additional financing, which can be directed toward innovation activities. Meanwhile, dynamic capabilities theory highlights how digital transformation in enterprises can enhance the positive effects of CSR on innovation, providing insights from both theoretical and empirical perspectives.Design/methodology/approachTo demonstrate the mediating role of debt financing costs and the moderating role of enterprise digital transformation in the mechanism of CSR on corporate innovation, this research conducts fixes effects models by collecting 27,912 data points from 3,775A-share China-listed enterprises, ranging in period from 2010 to 2020. Empirical research once again proves that the theories of innovation investment and dynamic capabilities effectively compensates for the shortcomings of reputation theory. These three theories effectively explain that what is the effect of CSR on enterprise innovation? How does CSR influence corporate innovation? And through what mechanisms can CSR better enhance corporate innovation?FindingsAccording to innovation investment theory, the cost of debt financing mediates the positive relationship between CSR and corporate innovation. This occurs because enterprises with robust CSR practices are more likely to secure external funding, thereby reducing their costs associated with external debt financing. Lower debt financing costs provide a stable source of funds for corporate innovation. Additionally, dynamic capability theory suggests that enterprise digital transformation moderates the positive relationship between CSR and corporate innovation. Building on these insights, it is recommended that enterprises, especially state-owned ones, should prioritize technological innovation to enhance their competitiveness.Research limitations/implicationsThis research aims to address and narrow the knowledge gap regarding the relation between CSR and corporate innovation through theoretical and empirical analyses. With respect to the influence mechanism, this research solely based on innovation investment theory and dynamic capabilities theory, focuses on the influence mechanism of CSR on corporate innovation, with the debt financing costs as the mediating variable and digital transformation as the moderating variable. However, the influence mechanism turns out to be complicated and there is room for further exploring numerous mechanisms. For example, future research can focus on identifying additional channels through which CSR exerts an influence on corporate innovation based on TOE theoretical framework.Practical implicationsThis research presents several strategies to enhance corporate innovation based on its conclusions: First, enterprises should promptly publish social responsibility reports to build a positive industry reputation. Moreover, by actively participating in CSR activities, they can strengthen their networks and enhance their industry standing. Second, the significant mediating role of debt financing costs should not be ignored. Enterprises are encouraged to seek diverse financing channels to reduce financial pressures, address financing challenges and facilitate the coordinated development of CSR and innovation. Third, enterprise digital transformation significantly affects the impact of CSR on innovation. Therefore, enterprises should advance digital transformation initiatives that incorporate technological innovation, organizational improvements and integration with supply chain partners. Finally, it has been noted that state-owned enterprises are often less responsive to technological innovation than their non-state counterparts. SOEs could redefine the scope and priorities of their social responsibilities to prevent excessive resource consumption that could hinder innovation. For instance, integrating some of their social responsibilities with innovation projects could promote both social and technological innovation objectives. Additionally, the government could ensure fair resource distribution among different types of enterprises and provide an equitable financing platform to mitigate financial challenges for both state-owned and non-state-owned enterprises.Originality/valueReputation theory does not fully elucidate the mechanisms by which CSR influences corporate innovation or how to effectively enhance CSR’s positive impact on innovation. This research integrates the theories of innovation investment and dynamic capabilities to address these gaps. According to innovation investment theory, debt financing costs mediate the positive relationship between CSR and corporate innovation. Meanwhile, dynamic capabilities theory posits that enterprise digital transformation moderates this positive relationship, further strengthening the impact of CSR on innovation.

This study examines the relationship between digital transformation and human resource management (HRM) practices in public universities in the United Arab Emirates via a synthesis of Resource-Based View and Dynamic Capabilities Theory. Despite the growing interest in digital transformation, limited research has examined its implications within public universities in the United Arab Emirates. Adopting a conceptual approach, this paper provides a comprehensive framework that connects the important elements of digital transformation, comprising technological infrastructure, digital transformation culture, and human resource capabilities, to the core HRM practices, namely recruitment, training, and performance appraisal. This study contributes to the existing literature by proposing a dual conceptualization of digital transformation as both a strategic resource and an adaptive capability that enhances HRM effectiveness. Moreover, the current study proposes a structured questionnaire approach for future empirical validation using Structural Equation Modelling (SEM). It is expected that future empirical findings will demonstrate that it is not only the size of technology investment, but also the organization’s ability to develop dynamic capabilities like organizational learning and strategic flexibility that mediate the relationship between digital transformation and HRM practices. Despite the growing interest in digital transformation, limited research has examined its implications within public universities in the United Arab Emirates. In particular, little is known about the underlying mechanisms through which digital transformation influences HRM practices, especially the mediating role of dynamic capabilities. Furthermore, the integration of the Resource-Based View and Dynamic Capabilities Theory in explaining this relationship remains underexplored in higher education contexts. Accordingly, this study aims to develop a conceptual framework that explains the relationship between digital transformation and HRM practices in UAE public universities. The study draws theoretical implications through the integration of RBV and the dynamic capabilities perspective into the ecosystem domain of digital HRM, as well as for university leaders and policymakers who would design systematic processes to align digital transformation initiatives in a way that serves human resource strategies. It highlights the need to create a digital culture, develop workforce digital competencies, and take an integrated approach to build sustainable institutional performance.

Digital transformation has fundamentally changed the way employees are managed and how companies strategize. In Indonesia, particularly among small and medium-sized enterprises (SMEs), the level of readiness to utilize technology remains low due to limited financial resources, a limited understanding of digital technologies, and restricted access to technology facilities. This study seeks to combine three main theories: “Resource-Based View (RBV), Dynamic Capabilities Theory (DCT), and Social Cognitive Theory (SCT)” to explain the role of HR readiness in improving company performance in the digital era. This study employs the Systematic Literature Review (SLR) method, collecting articles from sources such as Scopus, Emerald Insight, and SpringerLink, spanning the years 2019 to 2025. The results indicate that HR readiness acts as a bridge between strategic resources, the company's adaptive capabilities, and social learning behaviors. The combination of dynamic capabilities, digital leadership, and self-confidence in the face of digital change provides a sustainable competitive advantage. This study concludes that to succeed in digital transformation, companies must implement a human-centered approach that integrates strategy, technology, and human resource development.

The competitive environment within which organizations operate is evolving faster than ever, prompting organizations to change to keep up with the environmental changes. The dynamic capabilities (DCs) view seeks to answer how organizations attain and sustain competitive advantage in changing environments. In the past two decades, there has been a proliferation of research in the DCs domain; yet much remains to be investigated regarding the antecedents and outcomes of DCs. The term “dynamic marketing capabilities” (DMCs) refers to a subset of DCs with the emphasis on customer value. This research studies four DMCs: proactive market orientation, agility, opportunity creation, and value innovation. The development of DCs may be triggered by the necessity to reconfigure resources in dynamic environments or by managers’ decisions to change the current way of doing things in an attempt to improve performance. Therefore, environmental dynamism and dynamic managerial capabilities are antecedents of DCs. To achieve competitive advantage, organizations can employ two distinct but complementary strategies. First, they can match environmental demands by reconfiguring and renewing their organizational resource base. Second, they can create market turbulence. Therefore, these two strategies act as mediators between DMCs and organizational outcomes. A conceptual framework is developed in order to examine the relationship between DMCs, their antecedents, and outcomes. A sample of 270 usable responses was obtained from top and senior managers working in Australia. After ensuring the constructs’ reliability and validity, the hypotheses were tested by means of hierarchical regression analysis and structural equation modeling. The results indicate that environmental dynamism and dynamic managerial capabilities positively affect the studied DMCs; however, the effect of dynamic managerial capabilities is stronger. Moreover, DMCs have a positive impact on operational marketing capabilities and induced market turbulence; these in turn positively affect organizational outcomes. The multi-mediation tests confirmed that operational marketing capabilities and induced market turbulence mediate the effect of DMCs on organizational outcomes. This study contributes to and extends the knowledge of DCs by proposing an integrative conceptual framework, explaining the antecedents of DMCs and the mechanism by which DMCs are linked to organizational outcomes. The findings re-emphasize the need for DCs in dynamic environments and highlight the critical role of dynamic managerial capabilities. Another contribution is that the study incorporates the element of induced market turbulence, hitherto missing in the literature pertaining to DMCs. This study also emphasizes that operational marketing capabilities mediate the relationship between DMCs and organizational performance. Moreover, four distinct DMCs (i.e., proactive market orientation, agility, opportunity creation, and value innovation) are identified, and scales are developed and validated to measure them. The findings suggest that these DMCs perform as anticipated. This research provides several insights for managers regarding DCs and how to apply them to organizations. The results of this study demonstrate that it is necessary for organizations to invest in developing DMCs, not to achieve performance improvement directly, but to optimize their operational marketing capability configuration. This, in turn, improves organizational outcomes. Moreover, managers are encouraged to invest in the development of DCs as a strategic rather than tactical approach. Another implication is that in ambiguous environments, organizations need to not only adapt to the environment, but also to employ strategies of environment constructing.

Digital business model transformation (DBMT) necessitates new managerial capabilities, yet the existing literature lacks an empirical understanding of managerial capabilities as antecedents to strategic change and firm performance. This paper builds on dynamic managerial capabilities theory to argue that managerial human capital—composed of leadership and entrepreneurial skills—is a critical facilitator of DBMT and resultant firm performance. Further, the research model proposes that managers' social capital and cognition positively moderate the relationship between human capital and DBMT. The study's findings from a sample of German Industry 4.0 firms provide new insights into the significance of managerial capabilities in a digital economy. This study advances management literature by demonstrating that the benefits of managers' human capital for DBMT are contingent on its form: entrepreneurial skills facilitate digital transformation integral for firm performance, while leadership skills have no impact on firm performance—neither directly nor indirectly through DBMT. Thus, this study provides strong evidence of the importance of entrepreneurial skills in driving DBMT to increase firm performance. Further, the findings offer a nuanced account of the interrelationships between dynamic managerial capabilities, revealing that higher levels of social capital and lower levels of cognition increase the positive effect of entrepreneurial skills on DBMT. This study altogether reaffirms the significance of managers' dynamic capabilities for strategic change enabled by DBMT and their performance benefits, yet it reveals that the effect mechanisms differ from those found in nondigital research settings.

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

Digital transformation has significantly altered workplace dynamics, particularly in regulated sectors like healthcare, where diverse stakeholder competencies and strict legislative frameworks create unique challenges. While existing research has extensively examined digital transformation's technological and strategic aspects, the human dimension—critical to increasing digital service offerings—remains underexplored. The aim of the study is to investigate the interaction between individual and organisational level relationships and the relevance of behavioural aspects and conditions essential for sustaining learning and achieving the strived outcome of increased digital service offerings. This research employs a qualitative approach grounded in dynamic capabilities theory, including interviews and focus group discussions with 31 healthcare sector stakeholders in Germany. A conceptual model is proposed, illustrating how the emerged factors enhance digital service offerings. This study extends the theoretical understanding of dynamic capabilities by redefining sustained learning as a continuous and integrative process critical to digital transformation in healthcare. Practical implications for organisations and policymakers include designing low-threshold learning opportunities, fostering interdisciplinary collaboration, and addressing diverse competency levels. The findings offer actionable insights for navigating digital transformation in resource-constrained and regulated environments, contributing to academic and practical advancements in the field.

The aim of this paper is to determine the degree of influence and mediation of dynamic marketing, innovation and learning capabilities on the international performance of companies during economic crises. The analysis is developed through structured surveys of a multisectoral sample of 145 Spanish companies, using a consistent PLS approach (PLSc) for its development. The dynamic approach is developed through a methodology based on a dual time perspective in the firms' response, capturing the variation produced in the data. Dynamic marketing capabilities emerge as the most important variable, both for its direct influence on firm performance, as well as for its mediating power concerning the rest of the dynamic capabilities, which are not directly significant regarding performance. Therefore, we observe a joint effect, both direct and indirect, on dynamic marketing capabilities. The research contributes to the research field by introducing the management of dynamic capabilities and their relationships in an environment scarcely analyzed in this sense, such as that of a deep economic recession, thus helping the development of future theoretical frameworks within the Theory of Dynamic Capabilities and improving business decision-making regarding the reorganization of factors, raising awareness of the need to be oriented toward a culture of dynamic capabilities, as well as toward a correct balance in the management of resources determined by the model's capabilities.

The pandemic phenomenon encourages the acceleration of the application of digitalization in various sectors. Technological developments play a role in providing added value for business organizations to produce more effective, efficient, fast and agile performance. Investment diversification is needed so that investors remain resilient to uncertainty or rapid environmental changes that affect the investment value. Based on dynamic capability theory, digital transformation is a trigger for the creation of dynamic capabilities and is an innovation process of enterprise integration. Ambidextrous capabilities of an organization include exploitative innovation and exploratory innovation. The experimental approach, will try to analyze various types of investment platforms to find out how they compare in each of the different investment platforms. Quantitative method was used to determine the level of influence of digital transformation on ambidextrous innovation both exploitation and exploration , and the influence level of ambidextrous innovation on personal resilience. The experimental research process was conducted by distributing questionnaires to obtain primary data. The collected data was analyzed using smartPLS. The results of this study indicated that the hypothesis H1a and H1b has a P value of 0.000 so that it is proven to support the existing hypothesis. Then the P value H2a and H2b can be accepted and supports the hypothesis. The third hypothesis H3 with a p value of 0.030. Based on the five hypotheses, the result shows the most significant and strong influence in influencing the variable ambidexterity of innovation is digital transformation.

PurposeSo far, most of the literature on logistics social responsibility (LSR) has prioritized the examination, classification of and adaption toward positive LSR practices instead of investigating necessary logistics service providers’ capabilities to implement LSR strategies. Therefore, the purpose of this paper is to contribute to theory by an assessment of LSR and its linkages to dynamic capabilities theory to gain insights into how logistics service providers can foster an enhanced application of LSR practices.Design/methodology/approachThe paper is conceptual and grounded on dynamic capabilities theory. Relevant literature from logistics management, supply chain management and sustainable supply chain management (SSCM) as well as dynamic capabilities was examined to build upon existing theory by conceptualizing LSR from a dynamic capabilities perspective. In addition, propositions for future research are presented based on the conceptual model.FindingsWith regards to the controversial discussion in the literature about the direct link between dynamic capabilities and competitive advantage as well as the necessary degree of heterogeneity of dynamic capabilities, the conceptualization of LSR from a dynamic capabilities perspective adds new elements to this discussion. Considering long-term or even sustainable competitive advantage, the current degree of homogeneity across logistics services might hinder a sustainable advantage in the long run and demands for more advanced logistical capabilities. In this line, it is important to understand and utilize the causal relationships between different logistical resources and capabilities to achieve a unique long-term advantage allowing logistics service providers to further enhance LSR practices.Practical implicationsDue to the current role of logistics service providers, they should not just foster their resources focusing on the relationship to the focal firm, but they should also develop and implement new logistical capabilities derived from SSCM-related dynamic capabilities to design alternative service portfolio extensions and new business models.Originality/valueAlthough dynamic capabilities have been studied intensively in the last two decades, the causal relationships between different logistical resources and necessary dynamic capabilities to achieve advantages by enhancing LSR practices still lack conceptualization. To build on the understanding of LSR, the paper at hand presents a conceptual framework explaining LSR and SSCM practices through the lens of dynamic capabilities theory.

Identifying organizations’ dynamic capabilities for sustainable digital transformation: A mixed methods study

Enterprise Digital Intelligence Transformation is based on the Digital Conversion of information and process service upgrading, further touching the enterprise’s core business, with the goal of building a new business model of Digital Intelligence Transformation at a higher level. Based on dynamic capability theory, this paper conducts an in-depth study on the mechanism of enterprise Digital Intelligence Transformation and firm performance. This paper selects manufacturing companies listed in China’s Shanghai and Shenzhen A-shares from 2013 to 2022 as the research sample, and analyzes and tests the sample data using empirical research methods in order to explore the actual impact of Digital Intelligence Transformation on firm performance, including the specific pathways of action and moderating effects. This study helps enterprises to positively face the megatrend of Digital Intelligence Transformation and upgrading and the challenges it brings, and to grasp the new opportunities in the digital era. This study finds that enterprises carry out digital empowerment transformation and development strategies, and implement information Digital Conversion, service upgrading, and Digital Intelligence Transformation to promote firm performance to different degrees. Enterprise innovation resilience has a mechanism effect between information digitalization conversion enterprise performance and process service upgrading enterprise performance. The higher the environmental uncertainty, the greater the positive contribution of information digitalization to firm performance. Digital Conversion is the base and service upgrading is the process. The current sample enterprises have limited years of data collection, and most of them have only carried out the strategic implementation of Digital Conversion or servitization, and have not reached the high-level stage of digital and intellectual transformation. Therefore, it is found that enterprise innovation resilience has not yet shown a significant role mechanism effect between digital–intelligent transformation and enterprise performance at present. And environmental uncertainty has not yet shown a significant moderating effect in the stage of Servitization Upgrading and digital–intelligent transformation. The marginal contributions of this paper are mainly reflected in the following: (1) This study introduces the dynamic capability theory to explore the role of Digital Intelligence Transformation (Digital Conversion + service upgrading) on enterprise performance. (2) This paper investigates the role of Digital Intelligence Transformation in influencing the performance of enterprises from the Digital Conversion and service upgrading phases, and enriches the relevant role and regulatory mechanisms. (3) This study provides new ideas and strategic suggestions on Digital Intelligence Transformation for enterprises with different factor intensities, at different stages of development, and in different regions.

Against the backdrop of the rapidly evolving digital economy, how technology-based small and medium-sized enterprises (SMEs) can effectively configure their digital strategies to enhance innovation performance has become a central concern for both academia and practice. Drawing on Structure-Conduct-Performance (SCP) theory and dynamic capability theory, this paper constructs an analytical framework of “digital orientation–dynamic capabilities–innovation performance” to explore the mediating mechanism through which digital orientation influences innovation performance via dynamic capabilities. Digital orientation is divided into two dimensions: digital business orientation and digital technology orientation. Dynamic capabilities are conceptualized as resource integration capability and organizational reconfiguration capability. Based on 325 survey responses collected from Chinese technology-based SMEs, this study conducts empirical analysis using structural equation modeling (SEM). The findings reveal that (1) digital orientation has a significant positive impact on innovation performance and (2) both resource integration and organizational reconfiguration capabilities mediate the relationship between digital orientation and innovation performance. This study enriches the theoretical foundation of digital strategy and innovation research and sheds light on the internal mechanisms through which technology-based SMEs enhance innovation performance during digital transformation, offering important theoretical and practical implications.

The general objective of this study was to establish the effect of digital transformation on the customer relationship management capability of star-rated hotels in Mombasa County, Kenya. The specific objectives were to examine the effect of digital infrastructure on customer relationship management capability, establish the effect of digital strategy on customer relationship management capability and analyse the effect of data analytics on customer relationship management capability of star-rated hotels in Mombasa County. The study was founded on the Technology-Organisation-Environment Framework, the Resource-Based Theory and the Dynamic Capabilities Theory. The target population was the star-rated hotels operating in Mombasa County, and they were 43 in number according to the Mombasa County Government Trade Department report (2024). A census of the target population was done because it was relatively small. A cross-sectional research design was adopted, and data were collected using a structured questionnaire with marketing managers of the hotels being the respondents. Out of the 43 star-rated hotels, marketing managers from 37 of them responded, and this led to an 86% response rate. Data analysis was done using simple regression analysis, and the regression results indicated that Digital infrastructure, Digital strategy and Digital analytics all had a positive and significant effect on customer relationship capability of the star-rated hotels. Digital strategy had the strongest effect on the hotel’s customer relationship management capability, which suggests that improvements in strategic digital planning and alignment are most strongly associated with enhanced CRM capabilities. Based on the results of the regression analysis, the study concluded that digital transformation had a positive and significant effect on the customer relationship management capability of the star-rated hotels in Mombasa County. The study recommended that management of the hotels should prioritise strategic digital planning, invest in scalable digital infrastructure, enhance the hotels’ data analytics capabilities through staff training programs and encourage cross-functional digital collaboration within the hotels. Future studies could consider incorporating qualitative methods to capture deeper organisational perspectives on digital transformation, including challenges, cultural factors, and leadership dynamics.

The advent of Generative AI (Gen-AI) has precipitated an epistemological crisis in strategic management, challenging the foundational assumptions of enterprise digital transformation. Traditional frameworks, operating under a “Paradigm of Rational Mastery”, view technology as a predictable, manageable tool. This paper argues that the unique technical characteristics of Gen-AI—specifically its “Emergent Abilities” and “Black-Box Nature”—have given rise to a novel strategic condition termed “Foundational Uncertainty”, rendering these established models obsolete. This study critiques the prevalent “Two-Layer Model” of digital transformation, which is predicated on predictable technological advancement and planned “enablement”. In its place, this paper develops and proposes a “Dynamic-Adaptive Model” designed for the Gen-AI era. This new model reconceptualizes the firm-technology relationship as a co-evolutionary process. It posits that firms must shift from planned implementation to continuous “Adaptive Sensemaking”, an action-driven process of experimentation and learning to navigate the technology’s unpredictability. At the enterprise level, strategy must become an “Evolutionary Process” that emerges from this learning. The model’s central mechanism is a cyclical interplay of “Contention & Adaptation”—a generative tension between top-down managerial control (exploitation) and bottom-up, technology-driven learning (exploration) that propels organizational evolution. Consequently, the source of sustained competitive advantage shifts from possessing static, inimitable (VRIN) resources to cultivating a higher-order “Dynamic Adaptive Capability”—the organizational meta-capability for reconfiguring its own learning processes to thrive amidst unknowable change. The paper concludes by outlining the model’s significant theoretical contributions to the literature on digital transformation, Dynamic Capabilities, and the Resource-Based View, providing a new framework for navigating the Gen-AI frontier.