Managing Dynamic Capabilities in High-Risk Contexts: A Process Perspective on Collapse and Rebuilding

Xiaoxue Zhao

doi:10.54097/7wbktf43

Authors

Xiaoxue Zhao

DOI:

https://doi.org/10.54097/7wbktf43

Keywords:

Dynamic Capabilities, Extreme Uncertainty, Capability Breakdown, Capability Reconstitution, Financial Institutions

Abstract

This study examines how dynamic capabilities in financial institutions collapse and are reconstituted under extreme uncertainty, including crises, policy shocks, market volatility, and technological disruptions. Using a mixed-method approach combining qualitative multiple-case studies and quantitative surveys, the study investigates the role of managerial cognition, resource reconfiguration, and organizational mechanisms in capability reconstruction. Findings indicate that extreme uncertainty triggers capability breakdown, while managerial perception, resource flexibility, and organizational resilience drive effective reconstitution. This research contributes a process-based framework for dynamic capability evolution and provides practical guidance for managers in high-risk environments.

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