Technological innovation: a resource-based view
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# 4 Anatomy of a capability

Capabilities are clearly central to the resource-based view of an organisation, and the examples in the previous sections indicate the types of capability that are said to exist. But pinning down what it is in an organisation that creates and sustains a capability is not easy. Some obvious clues can be found in some of the definitions, of course. For example, in similar vein to Menguc et al.’s definition noted in Section 2, Teece (2014, p. 14) notes that ‘A capability is the capacity to utilise resources to perform a task or an activity, against the opposition of circumstances. Essentially, capabilities flow from the astute handling and orchestration of resources.’ The question then is, what creates the ‘capability/capacity’ for ‘astute handling and orchestration’?

If you refer back to the quotation from Tello-Gamarra and Zawislak (2013, p. 5) you will notice they specifically refer to ‘abilities, processes, experiences, skills, knowledge and routines’ – most of which are largely intangible. This is where Leonard’s (1995) work is useful. Although over two decades old, it still provides a model that encapsulates both what it is that constitutes a capability and what activities create and renew capabilities over time. Within this model a capability comprises four dimensions, which are detailed in the following sections.

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