Applying a Darwinian model to the dynamic capabilities view: Insights and issues

Abstract

The Darwinian logic of evolution occurring via the mechanisms of variation, selection and retention provides a possible theoretical framework from which to further develop the dynamic capabilities view. Presently, criticized for lacking a theoretical foundation and featuring a degree of confusion concerning how it aligns with the resource-based view, the dynamic capabilities view would benefit from greater clarity concerning its assumptions, theoretical base and the development of a series of testable predictions. We test elements of a potential Darwinian style framework through variation-focused hypotheses using panel data for 190 Australian service firms. Our results highlight the importance of market development as a basis for variation, however, the impact of dynamic capabilities upon a likely antecedent of selection was not clear and highlighted a nuanced relationship between capability development, market development and sales growth in an small-and-medium-sized enterprise environment. We conclude that applying a Darwinian lens to the dynamic capabilities view is challenging without longer time series data and additional measures, but such an approach remains theoretically attractive and further investigation may help clarify how we conceptualize the relationship between the dynamic capabilities view and resource based view.