Article

Introducing Resilient Dynamic Capabilities to Reduce the Negative Effects of Environmental Turbulence

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Abstract

Fulltext - https://ssrn.com/abstract=2942274 Recent research has examined the effect of dynamic capabilities on firm performance. However, it has not yet fully been explored how dynamic capabilities affect performance in turbulent environments. This paper extends the concept of dynamic capabilities by incorporating the idea of resilience. To that end, it presents a model of robust and versatile variants of dynamic capabilities. A simulation study investigates firm performance given different types of dynamic capabilities and varying degrees of environmental dynamism. The results confirm that non-resilient dynamic capabilities are efficient in stable and moderately dynamic environments. We find that resilient dynamic capabilities can reduce the negative effects of environmental turbulence on performance, especially when they are versatile.

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