Dynamic Capabilities and Corporate Sustainability

This assignment delves into the relationship between dynamic capabilities and corporate sustainability. It examines how firms can leverage their organizational capabilities to effectively integrate sustainability principles into their strategic decision-making processes. The analysis draws upon various academic sources to understand the theoretical framework of dynamic capabilities, the drivers of corporate sustainability, and best practices for integrating these concepts. Students are expected to critically evaluate the role of dynamic capabilities in fostering sustainable business models and contributing to long-term organizational success.

Running Head: Strategic Management
Strategic Management

Strategic Management 1
Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................2
Different types of approaches.....................................................................................................................2
Stakeholder Approach.................................................................................................................................2
Example of company using stakeholder approach......................................................................................3
Dynamic Capabilities...................................................................................................................................3
Example of company using Dynamic Capabilities Approach........................................................................4
Sustainability Approach...............................................................................................................................4
Example of company adopting sustainability approach..............................................................................5
Limitations to the approach........................................................................................................................5
Conclusion...................................................................................................................................................6
Recommendation........................................................................................................................................6
References...................................................................................................................................................6

Strategic Management 2
Executive Summary
Strategic management refers to the procedure of the organization to implement activities in such
a way that they gain organizational objective along with stakeholder benefits. The standard linear
approach of strategic management refers to the planning held in an organization. The
organization shall create vision and mission statement and align their business activities so that
goal is achieved. Apart from the linear approach, there are many other approaches which assist
the strategic management activities in an organization like, stakeholder approach, dynamic
capabilities, sustainable approach etc. These approaches tell the way in which an organization
shall perform to maintain the interest of stakeholders. Along with benefits, there are a few
drawbacks of these approaches as well. Many companies efficiently use these approaches to
identify their stakeholder and initiate activities for them. Further, the analysis of these
approaches is discussed below.

Strategic Management 3
Introduction
Strategic management refers to the process of implementing strategic activities in the
organization to improve its efficiency. The planning process is initiated in the organization with
respect to certain strategies and procedures so that the mission statement made by the company is
achieved (Helfat and Peteraf 2015). The linear model of strategic management is the process
under which the top management of the organization forms and implements plans so that viable
goals are achieved. The approach assumes that the future will become sustainable with the
formulation such policies. But still, by looking at the linear it can be noticed that there are a few
drawbacks to every approach used in an organization. Some of the organizations find it difficult
to align the interest of stakeholders with the objective of the organization. This resulted in
depletion in the financial growth of the organization. The report provides a brief analysis of
various strategic management approaches used in an organization to provide benefits to the
stakeholders of the organization. It also provides examples of companies using such approaches
and limitation of these approaches (Hill, Jones, and Schilling 2014). The details of the
management approaches are discussed below.
Different types of approaches
Strategic management can be defined as a process of managing activities of the organization in
such a way that it provides a strategy to the organization on the path of which organization can
run and gain success. It is a continuous process with the effect of which activities are
implemented and appraisal is done. Further there are many approaches to strategic management
which assist the company; and take care of the interest of the organization along with its

Strategic Management 4
stakeholders (Kindström, Kowalkowski, and Sandberg 2013). Some of these approaches are
discussed below:
Stakeholder Approach
Managing the interest of the stakeholder is a critical concept which needs to have complied with
every company existing in the global environment. Stakeholder management approach refers to
the approach in which the organization holds its activities in accordance with the interest of
stakeholders. Keeping in mind the stake which the stakeholders hold, the company carries on
their activities in such a way that it does not disturb and revoke the interest of stakeholder of the
organization (Kor, and Mesko 2013). Stakeholder of a particular organization refers to a person
who is connected with the activities of the organization; along with which the changes held in the
organization affect their share. Some of the stakeholders of an organization are suppliers,
shareholders, prospective buyers, government, employees etc. These are those people whose
share will get affected by change in activities of the business. So, the company shall initiate
activities with a view that the interest of stakeholders is not breached (Lozano 2015).
Further, the initial step of the stakeholder approach is the process of identification of the
stakeholders of the organization. There are many people connected with the activities and
decisions of the organization but, the management needs to find out the people who are affected
with the working of the organization and have the power to affect the decision-making process.
The management also needs to prioritize their stakeholders, like the holders who have more
shares in power, shall be classified separately and entertained accordingly (Nieves, and Haller
2014).

Strategic Management 5
Example of company using stakeholder approach
Additionally, it shall be noted that the company Xerox uses the stakeholder management
approach in their organization system to enhance their capabilities. The company believes that
the stakeholder approach helps them to understand better their relationship with their
stakeholders. For their customer, the company organized the Sustainability forum so that
awareness regarding the best customer redressal practices is done (Wheelen and Hunger 2017).
Also for the shareholders of the organization, the company small group meetings with the
potential investors and they also initiate one on one meeting with their employees and customers
so that efficiency is engraved and issue are sought. For the community (who are also the
stakeholders of the organization) the company worked in such a way that hey provided training
services to the student to make them capable of working in the global world. This process
initiated in development of the whole community (Xerox 2008).
Thus, in this way, the stakeholder engagement approach helps the organization to upraise their
efficiency in the organization system.
Dynamic Capabilities
Dynamic capabilities refer to the capabilities of an organization to perform and develop activities
of the organization in such a way that all the resources are adequately utilized. This model of
strategic management focuses on the resources of an organization, that they are used wisely or
not. The resources of an organization help them to generate greater returns for the organization,
therefore, the management invest in acquiring assets for the organization as they increase
efficiency. Provided to the before mentioned statement, efficiency in an organization is only
achieved when the resources are adequately utilized. Thus, the dynamic capabilities approach

Strategic Management 6
helps the organization the importance of an organization and use them optimally so that success
of an organization is achieved (Teece 2014).
The basic idea of the dynamic capabilities approach is that the organization should use the
resources in such a way that short-term benefits to the organization is received; further, they are
converted in long-term competitive advantage as well. The resource-based approach helps the
organization focus on their consistent growth in the competitive market as well (Weiss 2014). It
helps the manager to understand the capabilities of the organization and resources available to
them which they can optimally use. Thus, the manager develops strategies to adequately use the
resources available to them and create a competitive edge in the market. Also, it includes the
firm's ability to understand the external environment and use their resources in such a way that
benefits are achieved by the organization. Further, the dynamic capabilities approach requires the
assistance of the employees to understand the information, then plan and execute according to
the function required by the organization (Grant 2016). Further, the stages of dynamic
capabilities approach are discussed below:
Learning: Learning is the initial stage of this approach which involves the purpose that the
employees of the organization shall learn and adapt the changes happening in the organization.
They shall reorganize their daily routine to that communication gap is reduced and issues can be
solved successfully.
New Assets: this step states that the performance of an organization is determined by the
changes in the routines of the employees of the organization. This will further result in linking
the customers and optimizing the resources adequately (Epstein, and Buhovac 2014).

Strategic Management 7
Transformation of resources available: this step states that in the fast-changing environment,
the organization also needs to implement changes in their organization culture so that the
resources are adequately optimized and organization achieves competence in the market. Thus,
this step aims to mold the given resources in such a way that objective of the organization is
achieved.
Co-specialization: this phase states that with time if the organizations continually use the
resources adequately, then it becomes a habit of the company to achieve competence in the
market. Thus the company receives specialization in ding certain repeated tasks; due to this they
continue to achieve their respective targets (Engert, Rauter, and Baumgartner 2016).
Example of company using Dynamic Capabilities Approach
This approach further acted as an advantage for the company IBM to improve their capabilities.
The company IBM is truly a technological innovator company; they used their internal and
external resources to initiate output for the organization. IBM used their innovative technology
and successfully transmitted it to the customers, with this effect the customer gained satisfaction
from the products and the company achieved their respective targets (Eccles, Ioannou, and
Serafeim 2014). As the company successfully used their resources and developed IT-based
software in the market, due to which the gained the competitive edge in the market initiating
success for the company (Helfat 2013).
Sustainability Approach
Sustainability refers to the process of taking care of the environment in such a way that the
resources are left for use by future generations. The process of sustainable management includes

Strategic Management 8
the way of managing and utilized the resources optimally that they are spared for the future
generation as well. The companies shall take care of the society and environment while
conducting the business activities. Thus, in this way only resources can be saved. Also, the
approach provides various benefits to the organization that they start using resources optimally
and wastage is reduced. The process of application sustainable activities in an organization is
called sustained management (Beske, Land and Seuring 2014).
Example of company adopting sustainability approach
This type of approach is the need of current era as by looking at the environment it can be
noticed that companies nowadays are over utilizing the resources and polluting the environment
which adversely affecting the environment and the society (Beske and Seuring 2014). Thus, the
company shall aim to fulfill the corporate social responsibility in order to maintain a sustainable
growth of the business. Talking about the company which uses this approach in their
organization system gain optimum benefits in the market as well. For instance, the company
Coca-Cola has now started using water amount in their product efficiently. The company has
reduced the water consumption by 20% and ore concerning towards the eater management
activities as they can see the need for drinking water. Complying with the corporate social
responsibility the company is receiving efficiency in their work as well (Helfat 2013).
Limitations to the approach
1. The introductory issue in directing the stakeholder approach is that the organization
confronts issues in deciding the partners of the association. They confront troubles in
examining the general population who are really associated and influenced with the

Strategic Management 9
working of the association and who are not. Aside from this, the issue emerges when the
enthusiasm of the partner is measured in financial terms. Like, the offer given to suppliers
and communities is a noteworthy worry for the organization. In light of this fact, that if
the self-sufficiency is given to them then it will wind up provide more power to them
which can act as a barrier to the growth of an organization (Slack 2015).
2. Another restriction in dynamic capabilities approach is that the organizations utilizing
this approach more often harass the assets accessible to them, keeping in mind the end
goal to pick up the upper hand in the association. They don't comprehend the contrast
between utilizing ideally and utilizing too much. In this manner coming about to which
with a specific end goal to pick up capability assets are utilized as a part of more
prominent sum and wastage is induced (Tantalo, and Priem 2016).
3. Problem with the sustainability approach is that, in spite of the fact that the approach is a
piece of the business administration venture. Sustainability is an aspect which shall be
considered by the business process but is not the only aspect thus company shall take care
of their organizational goals as well. However commonly it ends up plainly troubles the
association to adjust the working of the corporate with feasible natural exercises because
of which firm faces overseeing issues (Baumgartner 2014).
Conclusion
Thus, in the limelight of above events, it shall be noticed that the strategic management
approaches adequately assist an organization to work properly and gain success in the external
market. Further, it makes the companies aware regarding their responsibilities towards
environment and society. Apart from that, there are various aspects in which such approaches

Strategic Management 10
halt the growth of an organization. Thus, these approaches shall be used sufficiently in the right
direction so that organizational object is fulfilled along with sustainability. Thus, it is a duty of a
company existing in the global market that they shall comply with such strategic management
approaches and align the interest of stakeholders with their goals.
Recommendation
To the companies using such approaches, it shall be recommended that in today's era competition
is tough and every organization is aiming high to get success. So, to fulfill their personal
objective they shall try to provide greater satisfaction to customers by improving the quality of
their resources and concerning the management approaches. Further, they shall not only focus on
sustainability approaches but they shall also keep in mind their mission and vision statement so
that both objectives are fulfilled.

Strategic Management 11
References
Baumgartner, R.J., 2014. Managing corporate sustainability and CSR: A conceptual framework
combining values, strategies and instruments contributing to sustainable development. Corporate
Social Responsibility and Environmental Management, 21(5), pp.258-271.
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply
Chain Management: an international journal, 19(3), pp.322-331.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and
dynamic capabilities in the food industry: A critical analysis of the literature. International
Journal of Production Economics, 152, pp.131-143.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2014. The impact of corporate sustainability on
organizational processes and performance. Management Science, 60(11), pp.2835-2857.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner production, 112,
pp.2833-2850.
Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing
and measuring corporate social, environmental, and economic impacts. Berrett-Koehler
Publishers.
Grant, R.M., 2016. Contemporary Strategy Analysis. John Wiley & Sons.

Strategic Management 12
Helfat, C., 2013. How Apple and IBM Learned to Change With the Times. Viewed on September
16, 2017 from https://www.usnews.com/opinion/blogs/economic-intelligence/2013/07/02/apple-
and-ibm-show-the-power-of-dynamic-capabilities
Helfat, C.E. and Peteraf, M.A., 2015. Managerial cognitive capabilities and the microfoundations
of dynamic capabilities. Strategic Management Journal, 36(6), pp.831-850.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Kindström, D., Kowalkowski, C. and Sandberg, E., 2013. Enabling service innovation: A
dynamic capabilities approach. Journal of business research, 66(8), pp.1063-1073.
Kor, Y.Y. and Mesko, A., 2013. Dynamic managerial capabilities: Configuration and
orchestration of top executives' capabilities and the firm's dominant logic. Strategic Management
Journal, 34(2), pp.233-244.
Lozano, R., 2015. A holistic perspective on corporate sustainability drivers. Corporate Social
Responsibility and Environmental Management, 22(1), pp.32-44.
Nieves, J. and Haller, S., 2014. Building dynamic capabilities through knowledge resources.
Tourism Management, 40, pp.224-232.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Tantalo, C. and Priem, R.L., 2016. Value creation through stakeholder synergy. Strategic
Management Journal, 37(2), pp.314-329.

Strategic Management 13
Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational
enterprise. Journal of International Business Studies, 45(1), pp.8-37.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.
Xerox., 2008. Our Commitment to Global Citizenship. Viewed on September 16, 2017 from
https://www.xerox.com/Static_HTML/citizenshipreport/2008/stakeholder-page1-1.html