Flying with clipped wings: dynamic capabilities of publicly owned health care providers

In highly regulated public organizations, dynamic capabilities might be of a completely different nature since opportunity recognition (sensing) and strategic decision-making (seizing) are taken over by the regulator. The spirit of a dynamic capability is retained at the level of operational-level entrepreneurship. We elaborate on the only part of the dynamic capability left to highly regulated public organizations: the reconfiguration of the resource base addressing the expectations of the regulator. Using longitudinal panel data from a sample of general practitioners from public hospitals in Ukraine, we legitimize the construct of reconfiguration-centred dynamic capability and test its impact on hospitals' performance.