The Interlink Between Resources and Capabilities: Towards a Theoretical Frame for the Development of Dynamic Capabilities

Abstract: In order to untangle the sources of heterogeneity among firms, this study reviews the last 20 years’ works related to the resource-based view of the firm, the knowledge-based perspectives on competitive advantage sustainability, and the dynamic capability view. We reach three important conclusions that provide a more granular understanding of resource heterogeneity and its development. First, dynamic capabilities leading to competitive advantage are knowledge-based processes characterised by functional specialisation. Second, their design is based on a weighted organisational mix, made up of skilled actors, incentive systems, dedicated organisational structure and idiosyncratic culture. Third, their development and management require a specific division of labour between senior and middle managers. We conclude our work by addressing future research on the topic and by highlighting core implications for practitioners. Keywords: resources; dynamic capabilities; knowledge