The article discusses dynamic capabilities and their role in strategic management. Dynamic capabilities are defined as the firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. The concept emerged in the 1990s and has since been developed considerably. The paper reviews and synthesizes the existing literature, highlighting that dynamic capabilities are shaped by enabling and inhibiting variables within and outside the firm, including the perceptions and motivations of managers. It identifies processes that create dynamic capabilities and explains that dynamic capabilities do not automatically lead to performance improvements. The paper also addresses areas of confusion and contradiction in the literature. The dynamic capability perspective extends the resource-based view (RBV) by addressing how valuable, rare, difficult to imitate and imperfectly substitutable resources can be created and how the current stock of valuable resources can be refreshed in changing environments. The RBV focuses on resources that are valuable, rare, imperfectly imitable and imperfectly substitutable (VRIN) as a source of competitive advantage. The dynamic capability perspective is argued to be an extension of the RBV, helping to understand how a firm's resource stock evolves over time and thus how advantage is sustained. The paper discusses the origin of the dynamic capability perspective, which was first developed by Teece et al. (1990) and later elaborated by Teece et al. (1997). The dynamic capability perspective is influenced by evolutionary economics, Schumpeter's theory of creative destruction, and the work of Cyert and March on the behavioral aspects of firms. It also builds on the work of Nelson and Winter on the role of routines and how they shape and constrain the ways in which firms grow and cope with changing environments. The paper defines dynamic capabilities as organizational processes that allow firms to renew their stock of valuable resources as their external environment changes. It discusses different definitions of dynamic capabilities and highlights that they are not ad hoc problem-solving events or spontaneous reactions, but rather repeatable, intentional processes. The paper also discusses the relationship between dynamic capabilities and competitive advantage, noting that while dynamic capabilities can lead to sustainable competitive advantage, they may also lead to temporary advantage, competitive parity, or even failure if the resulting resource base is irrelevant to the market. The paper also discusses the internal and external factors that enable and inhibit dynamic capabilities, including managerial perceptions, organizational processes, and external environmental factors. It concludes that dynamic capabilities are a valuable focus on change processes within the firm, but they currently have limited utility due to a lack of empirical work and problems in deriving managerial prescriptions from the perspective.The article discusses dynamic capabilities and their role in strategic management. Dynamic capabilities are defined as the firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. The concept emerged in the 1990s and has since been developed considerably. The paper reviews and synthesizes the existing literature, highlighting that dynamic capabilities are shaped by enabling and inhibiting variables within and outside the firm, including the perceptions and motivations of managers. It identifies processes that create dynamic capabilities and explains that dynamic capabilities do not automatically lead to performance improvements. The paper also addresses areas of confusion and contradiction in the literature. The dynamic capability perspective extends the resource-based view (RBV) by addressing how valuable, rare, difficult to imitate and imperfectly substitutable resources can be created and how the current stock of valuable resources can be refreshed in changing environments. The RBV focuses on resources that are valuable, rare, imperfectly imitable and imperfectly substitutable (VRIN) as a source of competitive advantage. The dynamic capability perspective is argued to be an extension of the RBV, helping to understand how a firm's resource stock evolves over time and thus how advantage is sustained. The paper discusses the origin of the dynamic capability perspective, which was first developed by Teece et al. (1990) and later elaborated by Teece et al. (1997). The dynamic capability perspective is influenced by evolutionary economics, Schumpeter's theory of creative destruction, and the work of Cyert and March on the behavioral aspects of firms. It also builds on the work of Nelson and Winter on the role of routines and how they shape and constrain the ways in which firms grow and cope with changing environments. The paper defines dynamic capabilities as organizational processes that allow firms to renew their stock of valuable resources as their external environment changes. It discusses different definitions of dynamic capabilities and highlights that they are not ad hoc problem-solving events or spontaneous reactions, but rather repeatable, intentional processes. The paper also discusses the relationship between dynamic capabilities and competitive advantage, noting that while dynamic capabilities can lead to sustainable competitive advantage, they may also lead to temporary advantage, competitive parity, or even failure if the resulting resource base is irrelevant to the market. The paper also discusses the internal and external factors that enable and inhibit dynamic capabilities, including managerial perceptions, organizational processes, and external environmental factors. It concludes that dynamic capabilities are a valuable focus on change processes within the firm, but they currently have limited utility due to a lack of empirical work and problems in deriving managerial prescriptions from the perspective.