An extensive literature review based on the firm’s strategic capabilities has been devoted in this study. Dynamic capability of a firm refers to the capabilities of strategic management in a competitive environment particularly in a perfect competition market where strategic insight is highly essential. This paper has described that theories are not sufficient to analyze the competitive performance of BP in the oil and gas industry. But a combination of study from both the field of strategic management and organization studies can show how a firm can develop symbolic capital by the social reputation and commitment. Theoretically it is called license to act which is critical activity of a firm.
BP was involved in the incident of Deepwater Horizon spill in Gulf of Mexico. For this instance BP has to pay a huge amount of interest as the affected country was US and thereafter BP lost billions of its market shares. BP’s turnaround has been based on its performance and it was a symbolical event to this industry since 2005. BP managers followed a strategic activity which is theoretically called license to act which represented through the company’s acquisition of symbolic act.
Discussion of theories & models from literature
Three theories from the literature have been synthesized for effective discussion and analysis of the BP case. These are dynamic capability, discursive environment and symbolic capital. ...
Resource based competitive advantage represents the efficient selection and optimum allocation of resources in the form of asset creation to gain capabilities that are rare and valuable for the firm itself. Organizations are aware of their internal capabilities which is analyzed by the performance and evaluated by the outcomes of the adequate level of performance. People in the organization learn new things with their work which summarized and termed as experience but when they gain experience through codification and articulation then it is termed as dynamic capability not only the general experience (Makhija, 2003, p.435). Organizations are typically constituted by past routines and patterns of different activities which the organization has followed earlier. Dynamic capabilities help the organization to realize the essential strategic objectives which can be imnp0limented through value addition in different activities. Apart from this strategic benefit, the firm can gain some other qualitative advantages. Differentiation of brand recognition is enhanced through effective strategic framework i.e. how fast and in what extend the developed strategies is implemented. The firm faces different obstacles in the way of implementation of different activities and for this reason it need to create an alternative framework for maintaining sustainable performance of the firm. The firm essentially needs dynamic capabilities for this type of effective performance strategy. It is reflected through the ability to gain new competitive advantage in the market dynamics. It is possible only through changes in the operational capabilities regarding implementation of activities. So the main aim of a production firm