From Organizational Routines to Dynamic Capabilities

This paper investigates the mechanisms through which organizations develop capabilities in a dynamic sense (Teece, Pisano & Shuen, 1997) and reflects upon the role of (1) experience accumulation, (2) knowledge articulation and (3) knowledge codification processes in creating and constantly reshaping organizational routines. The argument is made that dynamic capabilities originate from the co-evolution of these three mechanisms. At any point in time firms adopt a mix of learning behaviors constituted by a semi-automatic accumulation of experience and by increasingly deliberate investments in knowledge articulation and codification activities. Further, the relative effectiveness of these capability-building mechanisms is analyzed here in their interaction with selected features of the task to be learned, such as its frequency, homogeneity and degree of causal ambiguity. Testable hypotheses are developed in the context of a theoretical model of dynamic capability building, and some preliminary empirical evidence in support of the arguments made is reviewed. Finally, implications of the analysis for evolutionary economics and for the emerging knowledge-based view of the firms are discussed and an agenda for future research efforts on these issues is advanced.