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. ...