How organizational identity influences the development of dynamic capabilities: evidence from case studies

We surprisingly know little about the process through which dynamic capabilities are generated and developed within organizations. When organizations cope with changes, they need to challenge the very essence and reflect upon the core attributes that make their employees respond to the question of ‘who are we as an organization?’, i.e. organizational identity. In this study we investigate the interplay between organizational identity and the development of dynamic capabilities. Our two qualitative case studies of Italian companies show that the search for coherence between the new routines introduced from outside (i.e. consultants) and organizational identity engenders the development of dynamic capabilities. In the first case, the introduction of new routines triggered the definition of a new organizational identity coherent with the underlying practices, and turned into the development of replication dynamic capabilities. In the second case, an enduring identity inspired the redefinition of the routines and contributed to the development of adaptation dynamic capabilities. The paper discusses contributions to the literatures about dynamic capabilities and organizational identity, as well as practical implications.