Dynamic capabilities and asset orchestration

Abstract

In recent years, the theory of dynamic capabilities (DC) has become more sophisticated and has become a framework for sustainable growth through strategic innovation in companies. The “asset orchestration” function, a core concept of DC, connects various types of knowledge (assets) in an entrepreneurial manner and realizes the recombination, modification, and transformation of existing knowledge (assets) for the purpose of developing new businesses, new products, and so forth. However, the dynamic mechanism of such asset orchestration is largely unclarified in previous studies. This paper derives a dynamic theoretical model of asset orchestration and the components of DC necessary for companies to respond to the uncertainty of business environments and the speed of environmental change. Using the findings of the derived theoretical model, this paper analyzes in-depth case studies of Taiwan Semiconductor Manufacturing Company, which is currently attracting worldwide attention as a core company in the semiconductor industry, to verify the validity of the theoretical model.