Dynamic Capabilities and Their Characteristic Qualities: Insights from a Lab Experiment

AbstractDespite the prominence of dynamic capabilities in the strategy and organization literatures, we still lack an empirically grounded understanding of the construct. Featuring an extended version of an established card game, our study uses an experiment to induce dynamic capabilities in the laboratory. Our findings reveal that (a) more efficient use of resources, (b) increasing efficiency of coordination, (c) reliance on more appropriate action sequences, and (d) greater deliberation in action are characteristic qualities of dynamic capabilities. Beyond empirically identifying dynamic capabilities, we offer implications for dynamic capabilities and transfer theory.