Prof. Dr. Bernhard R. Katzy

CeTIM (Center for Technology and Innovation Management)/Munich

The concept of dynamic capabilities is an influential strategic management framework for understanding how competitive advantage evolves in situations of rapid and unpredictable change and how this advantage sustains over time. Despite the recognized significance of dynamic capabilities, the perspective has not gone unchallenged. It has been criticized as conceptually vague and tautological and that it lacks empirical grounding.
We have recently witnessed some interesting attempts to break up the tautology surrounding dynamic capabilities. One of these attempts was Eisenhardt and Martin´s re-conceptualization of dynamic capabilities (2000). They identified dynamic capabilities as "specific organizational and strategic processes (e.g. product development, strategic decision making, alliancing)". The results of such attempts are a first step, confirming that the concept of dynamic capabilities can be linked to concrete business operations in a way that is more realistic, empirically valid and non-tautological.

The goal of this study is to explore pattern of dynamic capabilities in product development operation. We contend that we can reduce tautology surrounding dynamic capabilities if the perspective of "product development as dynamic capability" provides valuable contributions for product development operation.

A literature review was conducted as a guide of research in order to identify pattern of product development capability. After reviewing the more "static" pattern, we investigated dynamic aspects of product development capability. With such a dynamic lens, we identified open and vague linkages and cause-effect patterns between dynamic aspects (like learning processes and path dependencies) and product develomnet tasks. From this standpoint, where literature is vague and poor in content, we continued with exploratory case study research in two industrial settings: automobiles and telecommunication.

Data collection and Analyses finalized.

The important characteristic of "product development as dynamic capability" is that it involves a pattern of variables that is different from those of traditional approaches. From a dynamic capability perspective, product development is seen as routines of learning, reconfiguration, and integration, shaped by path dependencies and positions of resources and markets.
Such a perspective provides a fundamental different account to explain how and why new product success occurs: it puts into question the traditional "plan and execute" paradigm and suggests a "probe and learn" strategy in order to take an active leader role instead of a follower role in competition. Moreover, this perspective is not merely focused on the creation of a single new product success; rather it is concerned with how companies create trajectories of new product success.

Summer 2004