This chapter begins with some notes on the development of stra- tegic management concepts in general, and the dynamic capabil- ities framework in particular. The dynamic capabilities framework draws from many intellectual streams, including entrepreneurship, the behavioral theory of the firm and behavioral decision the- ory, organization theory, transaction cost economics, and to some extent evolutionary economics. It emphasizes the role of entre- preneurial managers in identifying emerging opportunities and seizing upon them while simultaneously effectuating continuous corporate renewal.
Four central themes are developed. First, as noted in Chapters 1 and 2, the dynamic capabilities framework can be used to highlight the importance of strategy and organization, as well as leadership and management, to enterprise performance. Second, there is an important theoretical as well as practical role for entrepreneurs, managers, and leaders not just in the business enterprise, but also in the economic system. They play an essential role by (a) identify- ing and capturing new strategic opportunities, (b) orchestrating the necessary organizational assets, (c) and by inventing business mod- els and new organizational forms. Third, organizational structures must be designed to support and accommodate unbiased decision making.
In much of the economics and strategic management literature, incentive alignment suffices to enable good decisions. In more sociologically oriented treatments, “trust” and “organizational cul- ture” play a bigger role. We will argue that both incentive-based approaches and notions of trust and culture are each important in well-functioning business enterprises. Also, enterprises must avoid decision traps that lead to biased decisions. Fourth, it is our hope that an approach that combines both incentive and nonincentive issues may help move capabilities research toward a real paradigm. The approach we outline embraces elements of both evolution and design. We hope by doing so to capture the essence of the strategy processes.
Source: Teece David J. (2009), Dynamic Capabilities and Strategic Management: Organizing for Innovation and Growth, Oxford University Press; 1st edition.