Digital Dynamic Capabilities in the Airline Industry

Dynamic capabilities enable organizations to sense, seize, and transform resources that result in long-term competitive advantage. However, the current dynamic capability research does not address the effects of digitalization. Analyzing existing literature, the authors identify nine elements of outmost importance for organizations in times of digitalization. In linking these nine elements with an existing digital maturity model (University of St.Gallen, 2017), the authors are able to create a new framework called ‘Digital Dynamic Capabilities Frame-work’. To validate this framework, the authors apply it to one of the world’s biggest airlines, which recently faces challenges from digitalization, and perform a survey with different management levels of that airline. The results show that by increasing low maturity elements such as culture, it is possible to create and sustain competitive advantage. Therefore, this paper contributes to both research and practice. By combining research on digitalization and dynamic capabilities, this paper bridges the gap of both disciplines in a conceptual way. Further, using this framework, managers are able to analyze the capabilities of their organiza-tion in times of digitalization.