Dynamizing the Creation of Sustainable Competitive Advantage Based on the Typology of Dynamic Capabilities Theory

Document Type : Original Article

Authors

1 Professor, Department of Business Administration, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.

2 Assistant Professor, Department of Business Administration, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.

3 Ph.D. Student, Department of Business Policy, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran.

Abstract

Introduction and Objectives. In today’s highly dynamic and competitive environment, relying solely on tangible resources and operational capabilities is no longer sufficient for creating and sustaining competitive advantage. The increasing complexity of economic environments, the rapid pace of technological change, and the evolving expectations of customers compel organizations to continuously renew and reconfigure their capabilities. Consequently, the Dynamic Capabilities Theory has emerged as one of the most influential frameworks in strategic management, emphasizing an organization’s ability to sense opportunities and threats, seize value, and reconfigure resources in alignment with environmental changes.The purpose of this study is to examine the evolution of this theory, develop a typology based on the two main perspectives-that of Teece, Pisano, and Shuen versus Eisenhardt and Martin-and design a systemic model to explain the internal dynamics of sustainable competitive advantage. Moreover, the study integrates theoretical foundations with causal–systemic analysis to offer a comprehensive understanding of how organizational learning, innovation, market orientation, and transformational leadership interact to generate long-term competitive advantage.
Methods.This research adopts a qualitative, exploratory–inductive approach within an interpretivist paradigm. Data were collected through a systematic review of the literature, theoretical synthesis, and causal–systemic analysis. The study employed system dynamics modeling to visualize the interrelationships among the core components of dynamic capabilities through feedback loops. The three-stage model proposed by Teece-sensing, seizing, and reconfiguring-served as the structural foundation of the causal model. Validation was achieved through expert evaluation and triangulation with previous empirical and theoretical studies.
Findings.The results reveal that continuous interaction among the three core dimensions of dynamic capabilities creates a self-reinforcing cycle of learning, innovation, and corporate entrepreneurship, forming the backbone of sustainable competitive advantage. The feedback loops demonstrate that market orientation and organizational learning act as key drivers in the sensing phase, enhancing market insight and differentiation. In the seizing phase, innovation and knowledge capital strengthen the organization’s ability to capture opportunities and generate value. In the reconfiguring phase, transformational and developmental leadership play an orchestration role by creatively aligning resources, structures, and capabilities. Furthermore, profitability derived from competitive advantage forms a positive feedback loop that supports reinvestment in R&D and future innovations. This dynamic loops enables organizations not only to respond effectively to environmental changes but also to proactively shape new opportunities. The findings also highlight that human capital knowledge, continuous learning, and leadership function as leverage variables that help maintain balance between the exploitation of existing resources and the exploration of new opportunities.
Conclusion.The study concludes that sustainable competitive advantage is not the outcome of passive adaptation, but rather the result of learning-oriented proactiveness and intelligent orchestration of dynamic capabilities. The proposed model illustrates that internal organizational dynamics-mediated by feedback relationships among learning, innovation, leadership, and market orientation-generate a continuous cycle of renewal and long-term competitiveness. Accordingly, organizations can enhance adaptability and innovativeness by fostering a learning culture, promoting transformational leadership, and aligning strategic decisions with operational processes. This research, by integrating the typology of dynamic capabilities theory with the system dynamics approach, provides a unified conceptual framework for understanding the mechanisms through which dynamic capabilities create and sustain competitive advantage in today’s turbulent and uncertain environments. The model also offers a solid foundation for future research aimed at quantifying and simulating the internal dynamics of dynamic capabilities.

Keywords

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References

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Journal of Industrial Management Perspective
Volume 15, Issue 4 - Serial Number 60
December 2025
Pages 226-252

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