The role of dynamic capabilities in e-business transformation

The domain of e-business is characterised by rapid change and in such markets managers can no longer reply on the resources that they have assembled to provide their extant competitive position. Instead they must be able to combine resources in new ways, gain additional resources and dispose of superfluous resources, and to do this repeatedly and rapidly if they are to compete successfully. The term ‘dynamic capabilities’ is emerging in the strategic management literature for these skills. This study seeks to identify the dynamic capabilities that are necessary for e-business transformation and to identify practices in developing these capabilities that are both effective and common across companies, and might therefore be considered as ‘best practice’. Eight distinct dynamic capabilities are identified, each appearing to address either innovative or integrative aspects of e-business transformation. Consistent with previous studies of dynamic markets it was found that ‘best practice’ involved simple, experiential and iterative approaches to these necessary capabilities.