Moderating Effect of Business Ecosystem Volatility between Dynamic capabilities and Firm Performance in Sri Lankan Multinational Corporations

Abstract

The evolution of the theories of Dynamic Capabilities and its importance in paving the path of success for organizations has been studied and researched for decades. Evolving from the resource-based view, theories of Dynamic Capabilities state that organizations should have the ability to adapt to changing environments by integrating, building and reconfiguring internal and external resources. This study focuses on the above-mentioned external environmental conditions and its effect on the Dynamic Capabilities and its relationship to firm performance within the premise of Sri Lankan Multinational Corporations. The dynamic capabilities a firm possesses has paramount importance in sustaining competitiveness. Nonetheless, there are other influential factors in the external environment that dictate the effectiveness of these dynamic capabilities. For instance, the Business Ecosystem Volatility surrounding Organizations can influence the extent to which these dynamic capabilities effect firm performances. Sri Lanka is a unique environment to study this phenomenon due to the emerging market dynamics and multinational activities. This research employs a quantitative approach using surveys sent to Sri Lankan Multinational corporations to collect data. It also contributes to the existing literature in hopes that it will fill certain research gaps prevalent in this area of study. The findings will benefit the management of the Sri Lankan MNCs by providing guidance on how to manoeuvre Dynamic Capabilities under changing environmental conditions and how they can capitalize on their dynamic capabilities properly.