Abstract/Summary

This study explores Dynamic Capabilities (DC) from a Complexity perspective to examine how contradictions within routines affect resource modification in a way that allows for non-stop change. Seminal DC theory conceptualises higher-order capabilities modifying lower-order resources as the DC mechanism that enables dynamic change. However, this appears too episodic to explain or deliver non-stop change. When added to the black-box perspective on routines in seminal DC theorising, it renders processes for resource modification hierarchically structured, outcomes-focused, and, thus, rather undynamic. While more recent DC research amplifies the dynamism in routines to emphasise the dynamic aspect of capabilities, they neglect both the central issue of resource modification and that of top-level strategising. This compromise appears to equate DCs with organisational dynamism. Yet, from a complexity perspective, dynamism and Dynamic Capabilities are inseparable but distinct concepts; DCs are specifically characterised by the modification of resources, whereas dynamism connotes change that never quite stops. A Complexity perspective, thus, provides an opportunity to understand how dynamic resource modification delivers the theorised congruence with the non-stop change characterising business environments. This research empirically studies how contradictions and responses to contradictions, the mechanism for dynamism in complex systems, are fundamental to the dynamism in DCs. By adopting routines as the central focus for studying capabilities, and contradictions as the unit of analysis, the study used Action Research and Learning Histories to surface how and when interactive reactions to contradictions modify resources and when they do not. Findings show that resource modification is actually a variation of dynamic actions, which are, in turn, proactive and reactive interactions with contradictions, making resource modification inherently dynamic, albeit based on a paradox mindset and (in) interrelationships. This replaces the separation of higher- and lower-order modification theories and renders DCs as an individual-level phenomenon, irrespective of hierarchical structure.