|29th IBIMA Conference
3 - 4 May 2017
Prospect of Applying the Concept of Dynamic Capabilities in Public Sector Organisations
The main purpose of public organisations is to serve the citizens by executing the electoral mandate and mission, and thus creating values for the stakeholders. The key to the success of public organisations is to create the maximum value for the main stakeholders with simultaneous maintenance of the costs at a reasonable level. It is not an easy task due to the limited resources allocated for satisfying public needs, growing social expectations, increase in the scepticism towards public institutions and strong emphasis on providing public services at a level that is satisfactory for the stakeholders. Public organisations are not able to execute their tasks, create public value and effectively react to changes in the surroundings without devoting due attention to their resources. The resources are understood as a collection of all assets, skills, competencies, processes, characteristics, information, knowledge and many other elements controlled by organisation, which allow changing and introducing strategies aimed at increasing performance and effectiveness. Eisenhardt and Martin find dynamic capabilities to be allowing the organisations to focus on their resources. Dynamic capabilities are processes that use resources to adapt the organisation to the market changes, or even to invoke the changes. These are organisational and strategic routines used by the organisations to develop new resource configurations [Eisenhardt, Martin 2000]. The concept of dynamic capabilities, which is successfully used in private sector organisations, is slowly permeating to public sector organisations. The paper tries to answer the question formed by many researchers: can the concept of dynamic capabilities be used in public sector organisations? This deliberation is theoretical and it constitutes a starting point for further empirical studies.