Dynamic capabilities and the role of organizational knowledge: an exploration

Two concepts, dynamic capabilities and knowledge management, are widely assumed to be linked to sustained competitive advantage, although researchers have found it hard to substantiate these assumptions. It has also been suggested that the interplay between the two is important, and that it needs to be better understood. In this paper, we therefore look at the nature of, and interaction between, organizational knowledge and dynamic capabilities in some detail. We do this first through a literature review, and second, through a case study of the evolution of a new international business. The study illustrates how forms of knowledge, particularly when transmitted via social interactions, can act as a source of dynamic capabilities, and we conclude with suggestions about further research on the social and political interactions between the two.