Abstract
The resource‐based view suggests that organizations achieve and maintain competitive advantage through effective deployment of firm‐specific resources and capabilities. Because of volatile market conditions, researchers now focus on the development of dynamic capabilities that allow firms to react and create change in these dynamic environments. Despite the growing acceptance of the dynamic capabilities perspective in information systems research, the process of how organizations develop capabilities to influence the overall process of strategy formation and implementation in a dynamic and volatile environment (e.g., the information communication technology industry) is still underexplored. To address the knowledge gap, this article draws on an in‐depth case study of the capability development experience of a call center in strategic transformation from an in‐house customer service department to an outsourced customer service provider. We use Montealegre's (2002) process model of capability development as our analytical framework and extend it beyond the organizational perspective to include a project‐level (business unit) perspective. By adopting a dual‐level analysis, researchers and practitioners may obtain a more detailed and complete view of an organization's capability development, hence allaying criticism of the resource‐based view as a vague and tautological concept.