In organizational theory, dynamic capability is the capability of an organization to adapt adequately to changes that can have an impact on its functioning. The concept is defined by Teece et al. (1997) as "the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments."[1]
The term is often used in the plural form, dynamic capabilities, emphasizing that the ability to react adequately and timely to external changes requires a combination of multiple capabilities.