April 27, 2017

Prof. Teece’s “Dynamic Capabilities” Framework Featured in California Management Review

David Teece/CMRBlockbuster, Kodak, Lehman Brothers, and Nokia are among a group of companies that failed to adapt to changes in their external environment—stumbles that are particularly prevalent in markets with high rates of technological innovation.

In order to stay ahead of the competition, Berkeley-Haas Professor David Teece suggests that it's essential for companies today to follow a strategic approach. The dynamic capabilities framework, developed by Teece and other management researchers over the past twenty years, describes how firms can learn to anticipate and respond to industry-wide changes.

The California Management Review’s Summer 2016 Special Issue contains a collection of articles on dynamic capabilities curated by guest editor Teece. The issue examines the framework in greater detail, from the perspectives of strategy, organizational design, and adaptation within fast-changing industries.

Samsung, a company highlighted in the issue, provides a perfect example of dynamic capabilities in action. When Apple’s iPhone became a global sensation in June 2007, Samsung was not a major player in the smartphone industry. As one of many companies that were unprepared for its arrival, the release of the iPhone hit Samsung hard. However, within three years, the company launched its first Android-based smartphone, the Galaxy S1. By the end of 2010, Samsung was rivalling Apple in its sale of smartphones. And by 2013, it had become the leading smartphone manufacturer in the world, with a 32% global market share. Nokia, a major player in the cell phone industry prior to 2007, didn’t fare nearly as well, as it couldn't figure out how to translate its vast research and development into must-have new products.

The full issue California Management Review is now available online and throughout the Berkeley-Haas campus.

In addition, condensed versions of each of these articles have been made publically available through CMR Executive Digest initiative.

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