A contingency perspective on dynamic capabilities to deal with market disruption

Abstract

We develop a contingency view of the contribution of different types of dynamic capabilities to firm external fitness in context of market disruption. Specifically, we argue that the dynamic capabilities most conducive to maintaining external fitness vary in function of the stage of market disruption. The effort of incumbent to develop and use dynamic capabilities should thus match the stage of market disruption they are in. More than the level of environmental dynamism extensively discussed in the literature, the contingent approach we develop elaborates on the nature of environmental dynamism that changes as markets evolve from one stage of disruption to another. Specifically, we distinguish between three stages of market disruption (emergence, acceleration, and maturity) and three main components of environmental dynamism (unpredictability, frequency, and intensity of change).