Conceptual Development in the Dynamic Capabilities Literature: A Systematic Review

This paper reviews the fundamental theories helps to explain the concept and nature of dynamic capabilities. Since the publication of Teece et al.’s (1997) seminal paper, there has been a widespread discussion about the concept of dynamic capabilities. Our review offers a contribution to the literature by bringing together what are often contending and contradictory views to provide clarity and a deep understanding of the role of dynamic capabilities in the strategies of firms. For each theory, the discussion focuses on two aspects: what the theory is about and how it contributes to shaping dynamic capabilities framework. Over the course of organisational theory development, there have been many related theories that can explain the very nature of the term ‘dynamic capabilities,’ the internal and external factors that may affect the dynamism and capabilities of a firm as well as the benefits that dynamic capabilities bring to organisations. This systematic review, therefore, systematise the theories and literature discussing dynamic capabilities to provide a comprehensive picture of dynamic capabilities framework. In this review, we will first compare seven critical theories in the extant literature so far that help to locate the development of the dynamic capabilities framework by presenting the core contents and influences they impose on dynamic capabilities framework.