How was competitive advantage sustained in management consultancies during change: The role of dynamic capabilities

The purpose of this paper is to study the process in which dynamic capabilities renewed operational capabilities to sustain competitive advantage in management consulting firms of Iran during a period of drastic environmental changes.

Using a grounded theory building approach, comparative longitudinal case analyses were conducted in consultancies of Iran. The research was based on a deep study of documents, observations and interviews with managers and employees of 14 consulting firms.

It was found that during a period of environmental changes there was a relationship between dynamic capabilities and competitive advantage, but this relationship was mediated by the role of marketing and technological capabilities of a firm. It was also found that trust-building capabilities of the consulting firms moderate the relationship between dynamic and operational capabilities. The research explores homogeneity and heterogeneity of dynamic capabilities among consultancies too.

This research shows that under changing environmental conditions, dynamic capabilities of consultancies can become a source of competitive advantage. Moreover, it discusses whether dynamic capabilities are idiosyncratic or are best practices. It also explains the role of trust-building capabilities of consulting firms in moderating the relationship between dynamic and operational capabilities in the particular environment of Iran.