This article develops a conceptual integration of the dynamic capabilities and ambidexterity perspectives in order to understand how firms adapt to discontinuous change. Based on three illustrative case studies, it demonstrates that it is not possible to identify a universal set of dynamic capabilities. Rather, the distinct set of capabilities required depends on which of three modes of adaptation (structural separation, behavioral integration, or sequential alternation) has been prioritized. This article contributes a contingency perspective to dynamic capability research and offers guidance to managers about the alternative approaches they could take when seeking to adapt to environmental discontinuities.

The M-Budget Card case study is about mastering the challenges of an exploratory strategic initiative in a context marked by time pressure and frequent change. M-Budget was the first of a series of highly successful projects that established GE Money Bank as a leader in the Swiss credit card market. The business concept was to cooperate with the country's leading retailer MIGROS to develop an innovative credit card offering, the M-Budget card. The M-Budget card was launched a mere six months later and was an immediate success. The demand for the card exceeded expectations by far and the bank was inundated by more than 100,000 applications in the first weeks. The road to the successful market launch, however, was a rocky one and the team around Pierre had to master numerous challenges. Pierre, who took the lead in the initiative, had to select the right people to compose a team that had all the expertise and knowledge required to develop an entirely new market offering. A competitive move by the second largest retailer COOP forced the team to change its initial value proposition while working under intensive time pressure. Finally, the team had to overcome a series of operational problems after the initial market launch. The case study retraces the initiative's development over time and describes the leadership and organizational challenges faced by the team on its way to the successful creation of an entirely new business segment.

The companies that consistently generate revenues through innovation - GE, P&G, Nestle, and others - are highly selective about the projects they pursue.

This is an MIT Sloan Management Review article. What is the optimum growth rate to maximize total return to shareholders? This is a critical question facing both managers and investors. An answer is found in the concept of a company's growth corridor, which is set by the upper bounds of a financially sustainable growth rate and the lower bounds of the competitive growth rate. Using data from Fortune Global 500 companies, the authors find that those companies that grow within their respective growth corridor create above average total shareholder returns. Drawing examples from companies such as AES, BMW, Marks & Spencer, Ao, and Wal-Mart, they show how managers can identify their growth corridors, and how they can restore healthy and smart growth.