Teece's Dynamic Capabilities — the module's first theory lens — taught through the company that invented the future and couldn't reconfigure to it.
August 2026 · Case 2 of 6
As you read — hold this question
If a firm can invent the technology that will kill it, why does inventing not save it?
1975
A 24-year-old Kodak engineer, Steven Sasson, built the first digital camera in 1975. Management's reaction, in his words: “that's cute — but don't tell anyone.” Kodak filed for bankruptcy in 2012.
The back half of Module 10 runs on two theories. The first is Teece's Dynamic Capabilities: sense, seize, reconfigure. Kodak is the canonical case — it sensed (even invented) the shift, but could not reconfigure around its own film business.
The first theory lens
The textbook versionQuiz: sense / seize / reconfigure
Dynamic Capabilities (Teece)
Dynamic capabilities = a firm's ability to integrate, build and reconfigure internal and external competences to address rapidly changing environments. The deck's triad: Sense changes → Seize the opportunity → Reconfigure resources → adapt and change.
Read the diagram correctly
The slide draws three arrows converging — Sense, Seize and Reconfigure each feed “Adapt and change.” It is a 3-into-1 convergence, not a strict left-to-right chain. Easy exam trap.
Carry this
Sense, Seize, Reconfigure — all three feed adaptation. Kodak did the first two and died on the third.
Where it came from
The rest of the story
The real origin — and the tautology critique
The framework's seminal paper is Teece, Pisano & Shuen (1997), Strategic Management Journal — not the 2007 paper the deck cites (2007 added the sense/seize/reconfigure microfoundations). It was built to explain why firms in fast-moving tech markets win or die, advancing the more static resource-based view.
Does it hold up?
The standing critique (Arend & Bromiley, 2009) is tautology: if a firm adapts we say it “had” dynamic capabilities; if it fails we say it “lacked” them — hard to falsify. Useful vocabulary, weak as prediction. And in the GenAI era, “reconfigure” happens in weeks via an API, not the multi-year pivots Teece modelled.
The modern mirror
The other side
Two ways to die
Kodak is one failure mode: sense but fail to reconfigure. The next case (Zillow) is the opposite: seize hard and reconfigure carelessly. The framework names the moves; it does not tell you how fast to make them, and speed is now the whole game.
The other side
Inventing is sensing. Kodak proves sensing is the easy part — the capability that actually decides survival is the willingness to reconfigure against your own profitable past.
Quick recall — without looking back
Test yourself on this case
Question 1 of 3
What are Teece's three dynamic capabilities, and how does the deck's diagram arrange them?
Sense, Seize, Reconfigure — drawn as a 3-into-1 convergence, all three feeding “Adapt and change” (not a linear chain).
Question 2 of 3
What is the real origin of the framework, and the main critique?
Teece, Pisano & Shuen (1997), SMJ (the deck cites only 2007). Main critique: tautology / non-falsifiability (Arend & Bromiley, 2009).
Question 3 of 3
How does Kodak illustrate the framework?
Kodak sensed the digital shift (it invented the digital camera in 1975) and could even seize, but failed to reconfigure away from its high-margin film business — bankruptcy 2012.