DYNAMIC CAPABILITIES AND ORGANISATIONAL ENVIRONMENT: IMPLICATIONS FOR FIRM PERFORMANCE.

Abstract

This study examined dynamic capabilities and organisational environment and its implications for firm performance. The objective of the study is to investigate whether dynamic capabilities of firm can gain overall performance. Given the rapidly changes of the business environment, that ranges from technological advancement, competitive pressure, regulatory changes, and economic fluctuations that makes the environment unstable. The study significantly provides business operators with an insight on how to continuously monitor its environment, seize opportunities, and configuring their internal resources to gain competitive advantage. The study examined the concept of dynamic capabilities, its dimensions, organisational environment, and dynamic capabilities and the implications for firm performance. It also discussed some of the early approaches deployed by organizations in tackling the overwhelming challenges of the business environment such as the SWOT analysis, Porters five forces of firms competitiveness and Barney’s resource-based view and discovered that these models in tackling the challenges may be old but not obsolete. The study concluded that dynamic capabilities of firm’s influences performance and are the appropriate framework for addressing the dynamism in the organisational environment, hence, firms should learn how to develop their dynamic capabilities as well as their operational capabilities to gain competitive advantage in the future.