The effect of dynamic capabilities on performance and digital business strategy

A team from Maastricht University investigated the effect of dynamic capabilities (the ability to adapt internal and external competencies in response to rapidly changing environments) on the implementation of a organisations digital business strategy and business unit performance within a large German automotive manufacturing company. The study found that Business units with high dynamic capabilities tend to achieve better business unit performance and more successful digital business strategy implementation. The study also showed that a digital business strategy cannot solely focus on IT-related aspects but needs to address customer interaction, product innovation, process improvement and supporting functions (i.e., data, IT landscape and HR/culture).