Dynamic management view: logic of profit seeking based on adaptation to technological change and needs evolution through needs-focused innovation

Scrutinising well-known models/theories in strategic management, this paper proposes dynamic management view (DMV) on the premise profit comes from adaptation to technological change and needs evolution through needs-focused innovation in a dynamic world. It firstly sets up the theoretical framework of DMV by taking business model to embrace explicit needs (the ultimate source of profit) and needs-focused innovation (the ultimate driver of profit seeking) as the very causal mechanism at the micro-foundations level, and technological change and needs evolution as the direct causal mechanisms of profit at the macro-foundations level from which it draws the universal and contingency rules of needs-focused innovation, derives the propositions about the adaptive goodness between explicit needs and needs-focused innovation, shows it works as the determinant of profit with the industrial experiences, and concludes DMV provides the rationale for a firm’s sustainability, the strategic decision rules for business model innovation and the theoretical foundation to build dynamic theory of profit seeking.