Capability Management


Capability management is an effective technique for creating market change and to sustain long-term competitive advantage in fast-moving markets. Learn how to use dynamic capabilities as organisational and strategic routines to deploy and reconfigure your firm’s resources.

Technique Overview

Capability Management

Capability Management Definition

Capability management is the capacity to structure, combine, and leverage internal and external resources for the purpose of creating new value for stakeholders and maximising competitive advantage. Capability management distinguishes between (1) operational capabilities: common processes and techniques that can be learned and imitated, e.g. the Toyota production system, and (2) dynamic capabilities: hard-to-imitate “signature processes”, routines, and behaviours that are unique to each firm (Stead & Stead, 2015; Teece, 2014).

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Business Evidence

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Examples of Capability Management *

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Business Application

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Professional Tools

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Further Reading

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Capability Management References (4 of up to 20) *

  • Bessant, J. and Phillips, W. (2013) Innovation Management and Dynamic Capability, The SAGE Handbook of Strategic Supply Management (pp. 353-371), Sage Publications, London.
  • Dutton, J. (2012) Six Building Blocks to Bolster Procurement Capability, Chartered Institute of Purchasing and Supply, Australasia.
  • Easterby-Smith, M., Lyles, M. A. and Peteraf, M. A. (2009) Dynamic Capabilities: Current Debates and Future Directions, British Journal of Management, Vol. 20 (Special Issue), pp. S1-S8.
  • Eisenhardt, K. M. and Martin, J. A. (2000) Dynamic Capabilities: What Are They?, Strategic Management Journal, Vol. 21, pp. 1105-1121.

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