When Do Dynamic Capabilities Lead to Competitive Advantage? The Importance of Strategic Fit

30 Pages Posted: 27 Apr 2019

See all articles by Stav Fainshmidt

Stav Fainshmidt

Florida International University (FIU) - Department of Management & International Business

Lucas Wenger

Florida International University (FIU)

Amir Pezeshkan

University of Baltimore

Mark Mallon

Elon University - Love School of Business

Date Written: June 2019

Abstract

Recent studies suggest the relationship between dynamic capabilities and competitive advantage may be jointly affected by organizational and environmental factors. We enrich this nascent perspective by developing a configurational theoretical framework – underpinned by the mechanism of strategic fit – wherein dynamic capabilities lead to a competitive advantage when they support a strategic orientation appropriate for the levels of dynamism and munificence in the environment. Results of a fuzzy‐set Qualitative Comparative Analysis using primary data show that dynamic capabilities lead to a competitive advantage in dynamic, munificent environments by enabling the combination of differentiation and low‐cost orientations. In stable, non‐munificent environments, dynamic capabilities are effective in support of a low‐cost orientation. The central insight of this study is that the relationship between dynamic capabilities and competitive advantage is contingent upon the strategic fit between organizational and environmental factors, contributing to a more rigorous and configurational dynamic capabilities view.

Keywords: configurational theory, dynamic capabilities, environmental dynamism, environmental munificence, fuzzy‐set analysis, strategic fit, strategic orientation

Suggested Citation

Fainshmidt, Stav and Wenger, Lucas and Pezeshkan, Amir and Mallon, Mark, When Do Dynamic Capabilities Lead to Competitive Advantage? The Importance of Strategic Fit (June 2019). Journal of Management Studies, Vol. 56, Issue 4, pp. 758-787, 2019, Available at SSRN: https://ssrn.com/abstract=3378767 or http://dx.doi.org/10.1111/joms.12415

Stav Fainshmidt (Contact Author)

Florida International University (FIU) - Department of Management & International Business ( email )

University Park
Miami, FL 33199
United States

Lucas Wenger

Florida International University (FIU) ( email )

Amir Pezeshkan

University of Baltimore ( email )

1420 N. Charles Street
Baltimore, MD 21201
United States

Mark Mallon

Elon University - Love School of Business ( email )

Elon, NC 27244
United States

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