Dynamic Capabilities and Digital Business Transformation: A Sectorial Analysis

Abstract

This study examines the relationship between dynamic capabilities and digital business transformation across different industry sectors. Despite growing recognition of dynamic capabilities' importance in enabling digital transformation, there remains limited understanding of how these capabilities vary across sectors and how such variations influence transformation outcomes. Through a mixed-methods approach combining survey data from 284 organizations across manufacturing, financial services, healthcare, and retail sectors with 42 in-depth executive interviews, this research investigates sector-specific patterns in dynamic capabilities development and their impact on digital transformation success. Findings reveal significant cross-sectoral variations in the configuration, development, and deployment of sensing, seizing, and reconfiguring capabilities. Manufacturing firms demonstrate stronger technology sensing capabilities but face challenges in organizational reconfiguration; financial services organizations excel in digital opportunity seizing but struggle with legacy system constraints; healthcare entities show robust sensing capabilities yet face regulatory and institutional barriers to reconfiguration; and retail companies exhibit strong customer-centric sensing but experience challenges in technical capability development. The research further identifies critical enablers and barriers to dynamic capability development in digital contexts across sectors, including leadership vision, organizational structure, resource allocation patterns, and external ecosystem engagement. These findings contribute to both theoretical refinement of the dynamic capabilities framework in digital settings and practical guidance for executives navigating sector-specific transformation challenges.