An empirical study of dynamic capability and firm performance: A case study of ICT companies in Bauchi State
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- NGN 5000
Background of the Study
Dynamic capability refers to an organization's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments. It is a critical factor in achieving long-term competitive advantage, especially in industries characterized by technological innovation and market volatility (Teece, 2023). In the Information and Communication Technology (ICT) sector, where change is constant and innovation is a key driver of success, firms must develop dynamic capabilities to stay competitive and responsive to market demands (Teece, 2024).
Bauchi State, with its emerging ICT landscape, is witnessing an increasing number of ICT companies striving to position themselves as leaders in the industry. For these companies, dynamic capabilities—such as the ability to innovate, adapt to market changes, and leverage technological advancements—are essential for improving firm performance and sustaining competitive advantage (Ahmed & Zubair, 2023). However, many ICT firms in Bauchi State face challenges in developing and implementing these capabilities due to resource constraints, lack of skilled personnel, and competition from both local and international firms.
This study aims to explore the relationship between dynamic capabilities and firm performance in the ICT sector in Bauchi State, with a focus on how these capabilities contribute to competitive advantage, innovation, and business growth. Understanding the role of dynamic capability in enhancing firm performance will provide valuable insights for ICT firms looking to thrive in a rapidly evolving market.
Statement of the Problem
Despite the recognition of dynamic capabilities as a key factor in firm performance, many ICT companies in Bauchi State have not effectively developed or utilized these capabilities, leading to suboptimal performance and reduced competitiveness. The inability to adapt to market changes, innovate, and leverage technological advancements has hindered the growth of some ICT firms. This research aims to investigate how dynamic capabilities influence firm performance in the ICT sector in Bauchi State, providing a framework for firms to improve their competitive advantage.
Objectives of the Study
1. To assess the impact of dynamic capability on the performance of ICT firms in Bauchi State.
2. To identify the key dynamic capabilities that contribute to innovation and competitive advantage in ICT firms in Bauchi State.
3. To examine the challenges faced by ICT firms in Bauchi State in developing and leveraging dynamic capabilities.
Research Questions
1. How do dynamic capabilities influence the performance of ICT firms in Bauchi State?
2. What are the key dynamic capabilities that contribute to innovation and competitive advantage in ICT firms in Bauchi State?
3. What challenges do ICT firms in Bauchi State face in developing and leveraging dynamic capabilities?
Research Hypotheses
1. Dynamic capabilities positively influence the performance of ICT firms in Bauchi State.
2. Innovation and technological adaptability are significant components of dynamic capability that drive firm performance in ICT companies in Bauchi State.
3. Resource constraints and competition hinder the development and application of dynamic capabilities in ICT firms in Bauchi State.
Scope and Limitations of the Study
This study will focus on ICT firms in Bauchi State, examining how dynamic capabilities impact firm performance. Limitations may include challenges in accessing proprietary business performance data and the fast-paced nature of technological change, which may affect the generalizability of findings.
Definitions of Terms
• Dynamic Capability: The capacity of a firm to sense and seize new opportunities and reconfigure its existing resources to achieve competitive advantage (Teece, 2023).
• Firm Performance: The ability of a company to achieve its business objectives, including profitability, growth, and market share (Ahmed & Zubair, 2023).
• Innovation: The process of creating and implementing new ideas, processes, or products that lead to improvements in business performance (Teece, 2024).
