Beyond appearances – Do dynamic capabilities of innovative firms actually differ?

Dynamic capabilities are the higher-order capabilities needed for changing operational-level capabilities and learning in new domains, and thus they are critical for innovation activities. The aim of this study is to explore heterogeneity of dynamic capabilities in a comparative setting. We chose four innovative case firms representing a single industry, namely magazine publishing. The similarity of the cases provided a solid foundation for comparing their dynamic capabilities. Based on the results it seems that the practices comprising sensing capabilities are likely to be similar across firms within a single industry, while practices comprising seizing and reconfiguring types of capabilities may differ more between companies. Thus dynamic capabilities have both idiosyncratic and common features across an industry. These findings are relevant to practicing managers in that they illustrate that competing companies within the same industry tend to develop similar types of practices to match the changing requirement of the operating environment. Hence, managers should not be falsely comforted by the current situation within their firms, but proactively develop their unique capabilities to gain advantage over their competitors.

► Development processes of dynamic capabilities are context-specific. ► Dynamic capabilities differ between firms in their manifestations. ► Dynamic capabilities have both idiosyncratic and common features across an industry.