Impact of Dynamic Capabilities on Firm Performance: Moderating Role of Organizational Competencies

Abstract

This study observes the phenomenon of organizational performance with the lens of dynamic capabilities. This study investigates the impact of dynamic capabilities on organizational performance, taking organizational competencies as moderating variable, focusing on a paper industry at Lahore, Pakistan. The measurement of dynamic capabilities is based on the multi-dimensional construct underlying the four main factors which include i.e. Sensing, Learning, strong coordination, and competitive response to the rivals. This will lead to explore relationship of dynamic capabilities with organizational performance. Empirical research posits that dynamic capabilities have a direct impact on the organizational performance of the firm. It also proves that organizational competencies have positive moderating role in relationship of organizational performance and dynamic capabilities. This suggests that the direct relationship between dynamic capabilities and performance is insignificant.

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