Dynamic capabilities as mechanisms for sustainability and innovation: A systematic literature review

Abstract

Type of the article: Research ArticleAbstractContemporary organizations face mounting pressure to adapt beyond the imperatives of market competition, navigating demands that span digital disruption, sustainability transitions, and systemic institutional change. Despite the centrality of dynamic capabilities as an explanatory framework in strategic management, the literature has predominantly examined them through the lens of competitive advantage, leaving broader organizational and societal applications underexplored. This study addresses that gap by examining how the dynamic capabilities framework is theorized and applied in contexts beyond firm-level competitive advantage. A systematic literature review combined with bibliometric analysis was conducted using Scopus, covering peer-reviewed publications from 1995 to 2025. Three search strings, dynamic capabilities and technology, dynamic capabilities and ambidexterity, and dynamic capabilities and sustainability, yielded 750 articles after applying inclusion, exclusion, and quality criteria. VOSviewer was used for keyword co-occurrence mapping and cluster visualization, while qualitative thematic coding was conducted in MAXQDA to deepen interpretation. The analysis identified four structurally interconnected clusters: innovation, digital transformation, technology, and sustainability. The findings suggest that innovation is frequently treated in the literature as a key enactment mechanism of dynamic capabilities, with 691 co-occurrences and 215 overlapping coded segments. Sustainability represented the largest and most rapidly expanding domain, with 352 filtered articles, while technology functioned as an enabling layer rather than a capability in itself. These findings demonstrate that dynamic capabilities are undergoing a substantive reorientation, from performance-centric mechanisms toward integrative governance processes for navigating socio-technical complexity. Organizations should embed dynamic capabilities in innovation routines, digitally supported sensing processes, and sustainability-aligned strategic priorities.