Developing dynamic capabilities for learning and internationalization A case study of diversification in an SME

Purpose - The purpose of this paper is to examine the development process of dynamic capabilities. Design/methodology/approach - The paper adopts a qualitative, longitudinal participantobservation research design. A single case study firm was observed over a ten-year period of active researcher engagement allowing for the collection of rich data on the development and deployment of dynamic capabilities as they evolved. Findings - Dynamic capabilities can be identified as sensing, seizing and transforming. They are capable of intentional development by managers through strategic decision making and deliberative learning, within a path-dependent evolution. Research limitations/implications - A longitudinal single case study allowed for a close look at the development of dynamic capabilities, exploring the context and conditions that facilitated change and tracing the evolution of the organization's processes. However, this study remains subject to the limits of a single case approach. Future cross-sectional research would be able to test the conceptual model and allow for generalization of the findings to other populations of firms. Practical implications - The dynamic capability concept has been criticized for being of little practical use to managers. This research shows the process of intentional dynamic capability development, offering insights to practicing managers. Originality/value - This research adds to the relatively scant base of empirical work on dynamic capabilities and offers a conceptual model of dynamic capability development. The paper contributes to the neglected area of dynamic capabilities in SME's, showing that the dynamic capability concept is relevant to this sector. The paper provides insight for practitioners by showing that intentional dynamic capability development is achievable.