Dynamic Capabilities Measurement

Dynamic capabilities are a firm's higher-order abilities to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. Teece, Pisano, and Shuen's 1997 article introduced the construct to explain why some firms renew their advantage under technological change while others, with strong but static resources, fall behind. Teece's 2007 article disaggregated the construct into three measurable clusters of activity -- sensing opportunities and threats, seizing them through investment and business-model choices, and reconfiguring the asset base to maintain fit -- and located their microfoundations in identifiable routines and processes. Measuring dynamic capabilities means turning these abstract, higher-order constructs into observable indicators: defining the sensing, seizing, and reconfiguring dimensions, writing reflective items or archival proxies for each, validating a multidimensional measurement model, and relating the construct to performance, typically conditional on environmental dynamism.