Dynamic capabilities and organisational resilience in unstable macroeconomic environments : a case study of manufacturing firms in Zimbabwe

Abstract

The current literature conceptualises dynamic capabilities as the ability of managers to sense new trends, opportunities, and threats; to seize profitable opportunities while mitigating the risk of loss-making assets; and to transform tangible and intangible assets while continuously renewing the resource base of the firm. Little is known about dynamic capabilities in low income resource constrained contexts. The research aimed to uncover how dynamic capabilities influence organisational resilience and sustainability in Zimbabwe's unstable macroeconomic environment with persistent challenges. A two-case comparative qualitative study was used; 12 managers from two firms (six from each) in the manufacturing sector. A six-phase thematic analysis was carried out to analyse the data. The study found that Zimbabwean managers had developed collective flexible adaptive action through high-order dynamic capabilities of evolutionary fitness and knowledge management. Managerial cognitive capacity and applied learning orientation culture, allowed them to sense, seize and transform the firm’s resource base by tapping into and exploiting exogenous scientific know-how and technologies. The findings also show that evolutionary fitness and knowledge management mediate the relationship between dynamic capabilities and firm resilience and sustainability, while environmental dynamism moderates the relationship between dynamic capabilities and firm performance. The study contributes to the understanding of how firms in unstable macroeconomic environments develop dynamic capabilities that lead to firm resilience and sustainability. It does this by deepening the dynamic capabilities theory and the resource-based view of the firm. It extends the resource-based view by emphasising how firms in resource-constrained environments can gain a competitive advantage over their competitors by managing their resources and assets.