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Dynamic Capabilities In Small Service Firms

G. Beltrán, B. Ramesh
Published 2018 · Computer Science

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In constantly shifting service environments, managers face the challenge to renew, modify, and reconfigure their firm’s service offerings to respond effectively to industry turbulence. Dynamic capabilities have been proposed as a primary means by which firms can reconfigure their operational processes to generate these new service offerings. The role of dynamic capabilities in large organizations has been investigated extensively, but their role in small organizations has not yet received much attention. We explore how dynamic capabilities manifest in small service firms and how these firms use IT to achieve these capabilities. Using a multi-site case study in four small service firms, we examine how the four dynamic capabilities identified by Pavlou and El Sawy (2011) — namely, the capabilities of sensing, learning, integrating, and coordinating — are manifested. Our study extends the literature on dynamic capabilities by examining small service providers operating in the defense contracting industry. It explains how these firms can develop dynamic capabilities by reconfiguring operational capabilities when operating in a state of industry turbulence. Our findings also reveal IT as a critical enabler of dynamic capabilities. For managers, our study offers new insights into how they can better understand, assess, and acquire dynamic capabilities in their firms. Dynamic Capabilities in Small Service Firms
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