| Summary: | This case study explicates the dynamic capabilities framework and shows its relevance for the Global Exploration Division of a major IOC, Supermajor EXP. Three characteristics of dynamic capabilities are described: (1) how they differ from ordinary capabilities; (2) how they are identified, built and strengthened through managerial processes; and (3) how they function throughout the strategy development and execution process (sensing, seizing and transforming). Over a one-year period, EXP implemented key organizational and business model innovations to identify and begin to manage 10 dynamic capabilities. The case demonstrates how EXP identified and prioritized their dynamic capabilities through a strategic assessment, built, strengthened and evolved them through dialogical, collaborative and iterative processes that were informed by learning, sustained them by establishing new organizational structures, and reinforced them through cultural initiatives. Three of EXP's dynamic capabilities are described in detail: (1) accuracy in volume and risk predictions in investment proposals (the degree to which the subsurface reality is exposed when the well is drilled); (2) strategic deployment of talent into the ventures and projects with the highest economic value (right people, in the right seats, doing the right thing, with the right people, at the right time), and (3) effective management of the centralized–decentralized polarity. Keywords: Dynamic capabilities, Strategy process, Upstream strategy, Oil and gas exploration, Fracking, Shale, Portfolio investment decisions, Multinational Oil and gas companies, Centralized–decentralized, Transformational change
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