Historical Change and the Competitive Advantage of Firms: Explicating the 'Dynamics' in the Dynamic Capabilities Framework

by Geoffrey Jones and R. Daniel Wadhwani
 
 

Overview — This study contributes to the re-emerging dialogue between business history and strategy by examining how historical reasoning can contribute to the dynamic capabilities framework currently employed by strategy scholars. It explores how three distinct models of historical change—evolutionary, dialectical, and constitutive—were incorporated into the theoretical tenets of the origins, context, and micro-foundations of the dynamic capabilities framework. In each case, recognizing these historical models of change provides opportunities for sharpening the conceptualization of strategy-making processes and designing research to examine them more deeply. The paper argues that given the need for more extensive empirical research on dynamic capabilities, the methodological value of history for dynamic capabilities scholarship is significant.

Author Abstract

This working paper aims to deepen the scholarly dialogue between strategy and business history. It does so by examining how historical models of change can contribute to theory and research on the competitive advantage of firms during periods of rapid innovation. Focusing on the dynamic capabilities framework, it shows how three models of historical change—evolutionary, dialectical, and constitutive—can be used to extend theory and deepen research about the origins, context, and micro-foundations of dynamic capabilities. The paper shows how each model of historical change shaped the intellectual development of the dynamic capabilities framework, point to historical research that illustrates these processes, and discusses the methodological and conceptual implications for future research. We conclude by suggesting that recognizing and building on these historical models of change can provide a common conceptual language for a deeper dialogue between business historians and strategy researchers.

Paper Information