Dynamic capabilities and knowledge management

The dynamic capabilities concept was formed and has been developed by integration of evolutionary theory, transaction cost theory, and the organisational learning and tacit knowledge concepts. As a result, it helps to weaken essential dichotomies of the strategic management theory, especially those relating to, internal and external" factors, a task that is of particular topical interest in today's environment. interest in today's environment. The concept has at the centre of its attention the knowledge of the firm on how to manage its resources proactively in order to form new asset combinations and thereby capture economic rent. This knowledge is of particular importance if firms are to compete in the knowledge economy. The dynamic capabilities paradigm opens up perspectives for the all-encompassing analysis of various business strategy aspects, especially those that are crucial in ensuring a firm's long-term success, such as entrepreneurship, change management or knowledge-based competitiveness. The concept of dynamic capabilities reveals what in fact amounts to a new mechanism of developing competitive advantages, one that is characteristic of innovative, information-driven economy. This mechanism is founded not just on the firm's pool of tacit knowledge (its key strategic asset), but primarily on the firm's ability to capture economic returns from its knowledge assets. An argument may be put forward that the dynamic capabilities concept is at the core of a new strategy paradigm being formulated, and forms part of a new stage in strategic management theory.