Measuring Dynamic Capabilities of IT Resources

Asih Nur Fadhilah, Apol Pribadi Subriadi


The concept of Dynamic Capabilities (DC) has been popular for almost two decades. Dynamic capabilities were the ability of an organization to adapt to a changing environment. Dynamic capabilities are organizations that managed resources and competencies, both internally and externally, would survive with environmental changes. Many studies have reviewed the concept of dynamic capabilities. Some studies attempted to investigate how dynamic capabilities impact business, dynamic capabilities, and dynamic capabilities. However, limited research suggests how to measure an organization's dynamic capabilities, especially the capabilities of resources that drive an organization to have dynamic capabilities. Therefore, this study tries to provide a proposed method for measuring organizational resources' dynamic capabilities, especially IT. Information technology was chosen because there was a general belief that IT could strengthen the organization's position in business competition. The model was developed with a conceptual research and case study approach. Conceptual research was carried out to develop a theoretical framework through the study of literature. At the same time, the case study was carried out for model validation. The proposed method was adopted from the IT portfolio management and portfolio mapping. Based on the validation processes, the model proposed was suitable for measuring IT resources' capabilities and describing how IT resources could support dynamic capabilities. The result shows that more dynamic IT resources could improve the dynamic capabilities of an organization.


Information technology; dynamic capability; IT capabilities; role of IT; portfolio management; portfolio mapping.

Full Text:



D. J. Teece, “Business models and dynamic capabilities,†Long Range Plann., vol. 51, no. 1, pp. 40–49, 2018, doi: 10.1016/j.lrp.2017.06.007.

P. J. H. Schoemaker, S. Heaton, and D. Teece, “Innovation, dynamic capabilities, and leadership,†Calif. Manage. Rev., vol. 61, no. 1, pp. 15–42, 2018, doi: 10.1177/0008125618790246.

D. J. Teece, “Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance,†Strateg. Manag. J., 2007, doi: 10.1002/smj.640.

S. F. Wamba, A. Gunasekaran, S. Akter, S. J. fan Ren, R. Dubey, and S. J. Childe, “Big data analytics and firm performance: Effects of dynamic capabilities,†J. Bus. Res., vol. 70, pp. 356–365, 2017, doi: 10.1016/j.jbusres.2016.08.009.

T. Felin and T. C. Powell, “Designing organizations for dynamic capabilities,†Calif. Manage. Rev., vol. 58, no. 4, pp. 78–96, 2016, doi: 10.1525/cmr.2016.58.4.78.

O. Laaksonen and M. Peltoniemi, “The Essence of Dynamic Capabilities and their Measurement,†Int. J. Manag. Rev., vol. 20, no. 2, pp. 184–205, 2018, doi: 10.1111/ijmr.12122.

R. Wilden and S. P. Gudergan, “The impact of dynamic capabilities on operational marketing and technological capabilities: investigating the role of environmental turbulence,†J. Acad. Mark. Sci., vol. 43, no. 2, pp. 181–199, 2014, doi: 10.1007/s11747-014-0380-y.

D. J. Teece, G. Pisano, and A. Shuen, “Dynamic capabilities and strategic management,†Strateg. Manag. J., 1997, doi: 10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z.

B. Kump, A. Engelmann, A. Kessler, and C. Schweiger, “‘Towards a Dynamic Capabilities Scale: Measuring Sensing, Seizing, and Transforming Capacities,’†Acad. Manag. Proc., vol. 2016, no. 1, p. 13839, 2016, doi: 10.5465/ambpp.2016.13839abstract.

C. C. S. de Araújo, C. D. Pedron, and C. Bitencourt, “Identifying and assessing the scales of dynamic capabilities: a systematic literature review,†Rev. Gestão, vol. 25, no. 4, pp. 390–412, 2018, doi: 10.1108/rege-12-2017-0021.

A. N. Fadhilah and A. P. Subriadi, “The role of IT on firm performance,†2019, doi: 10.1016/j.procs.2019.11.122.

J. Ward, J. Peppard, R. S. Batenburg, J. Versendaal, and D. R. Lambooy, Samenvatting Strategic Planning For Information Systems. .

G. Peters, “Evaluating your computer investment strategy,†J. Inf. Technol., 1988, doi: 10.1057/jit.1988.33.

H. Jiao, I. Alon, C. K. Koo, and Y. Cui, “When should organizational change be implemented? the moderating effect of environmental dynamism between dynamic capabilities and new venture performance,†J. Eng. Technol. Manag. - JET-M, vol. 30, no. 2, pp. 188–205, 2013, doi: 10.1016/j.jengtecman.2013.01.005.

C. L. Wang and P. K. Ahmed, “Dynamic capabilities: A review and research agenda,†Int. J. Manag. Rev., vol. 9, no. 1, pp. 31–51, 2007, doi: 10.1111/j.1468-2370.2007.00201.x.

L. Q. Wei and C. M. Lau, “High performance work systems and performance: The role of adaptive capability,†Hum. Relations, vol. 63, no. 10, pp. 1487–1511, 2010, doi: 10.1177/0018726709359720.

W. M. Cohen and D. A. Levinthal, “Absorptive Capacity: A New Perspective on Learning and Innovation,†Adm. Sci. Q., 1990, doi: 10.2307/2393553.

M. Rogers, “Absorptive capability and economic growth: How do countries catch-up?,†Cambridge J. Econ., vol. 28, no. 4, pp. 577–596, 2004, doi: 10.1093/cje/28.4.577.

L. Turulja and N. Bajgoric, “Information technology, knowledge management and human resource management: Investigating mutual interactions towards better organizational performance,†VINE J. Inf. Knowl. Manag. Syst., vol. 48, no. 2, pp. 255–276, 2018, doi: 10.1108/VJIKMS-06-2017-0035.

S. H. Yu, “Social capital, absorptive capability, and firm innovation,†Technol. Forecast. Soc. Change, vol. 80, no. 7, pp. 1261–1270, 2013, doi: 10.1016/j.techfore.2012.12.005.

J. Guan and N. Ma, “Innovative capability and export performance of Chinese firms,†Technovation, vol. 23, no. 9, pp. 737–747, 2003, doi: 10.1016/S0166-4972(02)00013-5.

L. A. Grünfeld, “Meet me halfway but don’t rush: Absorptive capacity and strategic R&D investment revisited,†Int. J. Ind. Organ., 2003, doi: 10.1016/S0167-7187(03)00076-6.

S. Zahra and and Gerard George, “Absorptive Capacity : a Review , and Extension,†Acad. Manag. Rev., 2002, doi: 10.2307/4134351.

W. Tsai, “Knowledge transfer in intraorganizational networks: Effects of network position and absorptive capacity on business unit innovation and performance,†Acad. Manag. J., 2001, doi: 10.2307/3069443.

G. Akman and C. Yilmaz, “Innovative capability, innovation strategy and market orientation: An empirical analysis in Turkish software industry,†Manag. Innov. What Do We Know About Innov. Success Factors?, vol. 12, no. 1, pp. 139–181, 2019, doi: 10.1142/9781786346520_0007.

P. Adler and a Shenbar, “Adapting your technological base: the organizational challenge,†Sloan Manage. Rev., 1990, doi: 10.1080/14783363.2013.791102.

E. Szeto, “Innovation capacity: Working towards a mechanism for improving innovation within an inter-organizational network,†TQM Mag., 2000, doi: 10.1108/09544780010318415.

C. A. UN, “INNOVATIVE CAPABILITY DEVELOPMENT IN U.S. AND JAPANESE FIRMS.,†Acad. Manag. Proc., 2002, doi: 10.5465/apbpp.2002.7516866.

H. Zhao, X. Tong, P. K. Wong, and J. Zhu, “Types of technology sourcing and innovative capability: An exploratory study of Singapore manufacturing firms,†J. High Technol. Manag. Res., 2005, doi: 10.1016/j.hitech.2005.10.004.

C. P. Tang, T. C. K. Huang, and S. T. Wang, “The impact of Internet of things implementation on firm performance,†Telemat. Informatics, vol. 35, no. 7, pp. 2038–2053, 2018, doi: 10.1016/j.tele.2018.07.007.

P. Saeidi, S. P. Saeidi, S. Sofian, S. P. Saeidi, M. Nilashi, and A. Mardani, “The impact of enterprise risk management on competitive advantage by moderating role of information technology,†Comput. Stand. Interfaces, vol. 63, no. November 2018, pp. 67–82, 2019, doi: 10.1016/j.csi.2018.11.009.

F. Morimura and Y. Sakagawa, “Information technology use in retail chains: Impact on the standardisation of pricing and promotion strategies and performance,†J. Retail. Consum. Serv., vol. 45, no. April 2016, pp. 81–91, 2018, doi: 10.1016/j.jretconser.2018.08.009.

S. Hao and M. Song, “Technology-driven strategy and firm performance: Are strategic capabilities missing links?,†J. Bus. Res., vol. 69, no. 2, pp. 751–759, 2016, doi: 10.1016/j.jbusres.2015.07.043.

Y. Chen, Y. Wang, S. Nevo, J. Benitez, and G. Kou, “Improving strategic flexibility with information technologies: Insights for firm performance in an emerging economy,†J. Inf. Technol., vol. 32, no. 1, pp. 10–25, 2017, doi: 10.1057/jit.2015.26.

J. Park, J. N. Lee, O. K. Daniel Lee, and Y. Koo, “Alignment between Internal and External IT Governance and Its Effects on Distinctive Firm Performance: An Extended Resource-Based View,†IEEE Trans. Eng. Manag., 2017, doi: 10.1109/TEM.2017.2678485.

J. A. Pérez-Méndez and Ã. Machado-Cabezas, “Relationship between management information systems and corporate performance,†Rev. Contab. Account. Rev., vol. 18, no. 1, pp. 32–43, 2015, doi: 10.1016/j.rcsar.2014.02.001.

M. Dale Stoel and W. A. Muhanna, “IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type,†Inf. Manag., vol. 46, no. 3, pp. 181–189, 2009, doi: 10.1016/

T. H. Kim, M. Wimble, and V. Sambamurthy, “Disaggregation of the IT capital effects on firm performance: Empirical evidence from an IT asset portfolio perspective,†Eur. J. Inf. Syst., vol. 27, no. 4, pp. 449–469, 2018, doi: 10.1057/s41303-017-0062-1.

B. Arora and Z. Rahman, “Information technology capability as competitive advantage in emerging markets: Evidence from India,†Int. J. Emerg. Mark., vol. 12, no. 3, pp. 447–463, 2017, doi: 10.1108/IJoEM-07-2015-0127.

S. E. Degroote and T. G. Marx, “The impact of IT on supply chain agility and firm performance: An empirical investigation,†Int. J. Inf. Manage., vol. 33, no. 6, pp. 909–916, 2013, doi: 10.1016/j.ijinfomgt.2013.09.001.

D. Abrego Almazán, Y. Sánchez Tovar, and J. M. Medina Quintero, “Influencia de los sistemas de información en los resultados organizacionales,†Contaduria y Adm., vol. 62, no. 2, pp. 321–338, 2017, doi: 10.1016/j.cya.2017.03.001.

R. Hidayat and S. Akhmad, “Implementation of enterprise resource planning system in manufacturing firm in Indonesia,†Int. J. Adv. Sci. Eng. Inf. Technol., vol. 7, no. 4, pp. 1434–1440, 2017, doi: 10.18517/ijaseit.7.4.1078.

J. Benitez-Amado and R. M. Walczuch, “Information technology, the organizational capability of proactive corporate environmental strategy and firm performance: A resource-based analysis,†Eur. J. Inf. Syst., vol. 21, no. 6, pp. 664–679, 2012, doi: 10.1057/ejis.2012.14.

E. Loukis, M. Janssen, and I. Mintchev, “Determinants of software-as-a-service benefits and impact on firm performance,†Decis. Support Syst., vol. 117, no. October 2018, pp. 38–47, 2019, doi: 10.1016/j.dss.2018.12.005.

J. J. Céspedes-Lorente, A. Magán-Díaz, and E. Martínez-Ros, “Information technologies and downsizing: Examining their impact on economic performance,†Inf. Manag., vol. 56, no. 4, pp. 526–535, 2019, doi: 10.1016/

H. J. Kim, “Information technology and firm performance: the role of supply chain integration,†Oper. Manag. Res., vol. 10, no. 1–2, 2017, doi: 10.1007/s12063-016-0122-z.

L. Bin Oh, H. H. Teo, and V. Sambamurthy, “The effects of retail channel integration through the use of information technologies on firm performance,†J. Oper. Manag., vol. 30, no. 5, pp. 368–381, 2012, doi: 10.1016/j.jom.2012.03.001.

A. Ilmudeen and Y. Bao, “Mediating role of managing information technology and its impact on firm performance: Insight from China,†Ind. Manag. Data Syst., vol. 118, no. 4, pp. 912–929, 2018, doi: 10.1108/IMDS-06-2017-0252.

S. Oh, Y. U. Ryu, and H. Yang, “Interaction effects between supply chain capabilities and information technology on firm performance,†Inf. Technol. Manag., vol. 20, no. 2, pp. 91–106, 2019, doi: 10.1007/s10799-018-0294-3.

R. Torres, A. Sidorova, and M. C. Jones, “Enabling firm performance through business intelligence and analytics: A dynamic capabilities perspective,†Inf. Manag., vol. 55, no. 7, pp. 822–839, 2018, doi: 10.1016/

J. Braojos, J. Benitez, and J. Llorens, “How do social commerce-IT capabilities influence firm performance? Theory and empirical evidence,†Inf. Manag., vol. 56, no. 2, pp. 155–171, 2019, doi: 10.1016/

J. Benitez, J. Llorens, and J. Braojos, “How information technology influences opportunity exploration and exploitation firm’s capabilities,†Inf. Manag., vol. 55, no. 4, pp. 508–523, 2018, doi: 10.1016/

Y. Wang, L. A. Kung, and T. A. Byrd, “Big data analytics: Understanding its capabilities and potential benefits for healthcare organizations,†Technol. Forecast. Soc. Change, 2018, doi: 10.1016/j.techfore.2015.12.019.

B. C. C. Tan, S. L. Pan, and R. Hackney, “The strategic implications of web technologies: A process model of how web technologies enhance organizational performance,†IEEE Trans. Eng. Manag., vol. 57, no. 2, pp. 181–197, 2010, doi: 10.1109/TEM.2009.2023130.

P. Mikalef and A. Pateli, “Information technology-enabled dynamic capabilities and their indirect effect on competitive performance: Findings from PLS-SEM and fsQCA,†J. Bus. Res., vol. 70, pp. 1–16, 2017, doi: 10.1016/j.jbusres.2016.09.004.

N. Saraf, C. S. Langdon, and S. Gosain, “IS application capabilities and relational value in interfirm partnerships,†Inf. Syst. Res., 2007, doi: 10.1287/isre.1070.0133.

A. Schwarz, M. Kalika, H. Keffi, and C. Schwarz, “A dynamic capabilities approach to understanding the impact of IT-enabled businesses processes and IT-business alignment on the strategic and operational performance of the firm,†Commun. Assoc. Inf. Syst., vol. 26, no. 1, pp. 57–84, 2010, doi: 10.17705/1cais.02604.

A. Rai and X. Tang, “Leveraging IT capabilities and competitive process capabilities for the management of interorganizational relationship portfolios,†Inf. Syst. Res., 2010, doi: 10.1287/isre.1100.0299.

P. L. Drnevich and A. P. Kriauciunas, “Clarifying the conditions and limits of the contributions of ordinary and dynamic capabilities to relative firm performance,†Strateg. Manag. J., 2011, doi: 10.1002/smj.882.

B. C. and McNurlin and R. H. Sprague, Information Systems Management in Practice, 6th Edition, 6th ed. Upper Saddle River, 2004.

B. G. Ataya and J. Thorp, “Portfolio Management — Unlocking the Value of IT Investments,†pp. 1–2, 2007.

H. Ajjan, R. L. Kumar, and C. Subramaniam, “Information technology portfolio management implementation: a case study,†J. Enterp. Inf. Manag., vol. 29, no. 6, pp. 841–859, 2016, doi: 10.1108/JEIM-07-2015-0065.

M. J. Schniederjans, J. L. Hamaker, and A. M. Schniederjans, Information technology investment: Decision-making methodology, 2nd edition. 2010.

M. Jeffery and I. Leliveld, “Best practices in IT portfolio management,†MIT Sloan Management Review. 2004.

D. Hoffmann, F. Ahlemann, and S. Reining, “Reconciling alignment, efficiency, and agility in IT project portfolio management: Recommendations based on a revelatory case study,†Int. J. Proj. Manag., vol. 38, no. 2, pp. 124–136, 2020, doi: 10.1016/j.ijproman.2020.01.004.

J. N. Luftman, P. R. Lewis, and S. H. Oldach, “Transforming the enterprise: the alignment of business and information technology strategies,†IBM Syst. J., vol. 32, no. 1, pp. 198–221, 1993, doi: 10.1147/sj.321.0198.

J. M. Ward, “A portfolio approach to evaluating information systems investments and setting priorities,†J. Inf. Technol., 1990, doi: 10.1057/jit.1990.46.



  • There are currently no refbacks.

Published by INSIGHT - Indonesian Society for Knowledge and Human Development