Adib Ubaidillah, Zainul Arifin, Mukhammad Kholid Mawardi, Teuku Noerman
Environmental dynamism (ED) is often assumed to shape organizational performance, yet findings remain mixed because ED does not exert a uniform effect across firms and contexts. This review synthesizes fragmented evidence by showing that ED primarily functions as a conditional amplifier: it strengthens or weakens the performance returns of internal capabilities rather than acting as a stable direct driver. Guided by PRISMA, 24 empirical studies (2015–2025) indexed in Scopus were analyzed. Most studies model ED as a moderator of capability–performance relationships, whereas fewer treat it as a direct antecedent. Across the evidence, positive capability effects appear more consistent under moderate dynamism, whereas under high dynamism the findings become more mixed and, in some cases, negative because turbulence can overwhelm decision-making and coordination when capability micro-foundations and organizational alignment are underdeveloped. By specifying the boundary conditions within Dynamic Capabilities Theory under which sensing, seizing and reconfiguring translate into performance gains or losses, this review shows that ED is not a generic boundary condition, but an environment that alters the effectiveness of capabilities in contingent ways. The framework offers guidance for aligning innovation, leadership and structural responses with ED conditions and outlines directions for future empirical validation. © 2026 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
Faculty of Administrative Science, University of Brawijaya, Malang, Indonesia
