Role of Dynamic Capabilities for Digital Transformation : Developing Dynamic Capabilities Essential for Digital Transformation

Abstract

Digital transformation pursued by firms is characterized by business distruptions and dynamic changes. Thus, the normal resource base and routine capabilitities are not adequate to manage these changes. ’Dynamic capabailities’, born out of strategic management studies are necessary to manage rapidly the distruptions to pursue the strategic objectives of digital transformation. In this study, 6 dynamic capabilities have been developed through strategic actions as creating and modifying the company’s resource base or integrating and reconfiguring its competences. They are identified either as ’first order’ or ’second order dynamic capabilties’. The results of this research further shows that firms that would have a strong resource base will have lesser firm specific ’second order dynamic capabilities’ while having more ’first order dynamic capabilities’ that would be more homogenous in the manufacturing industry at a higer level. The ’second order dynamic capabailties’ are extension of the ’first order’ and can be developed through the firm specific strategic actions performed to maintain the distruptions during digital transformation.