This paper investigates an unexplored question of how project-based enterprises (PBEs) manage to build capabilities from scratch within a limited period of time for project delivery. This paper conducts a multi-case study of five PBEs that act as the leading organization in delivering five large-scale and complex projects in China, based on a combination of 103 semi-structured interviews and substantial documental data. The findings show that PBEs orchestrate resource to build their capabilities exogenously and endogenously through two underlying mechanisms – dynamic resource configuration and recursive learning cycle. Overviewing the overall capability building trajectory, PBEs’ role in resource orchestration transforms from “resource possessor” to “resource integrator” during exogenous process then to “capability iterator” during endogenous process. Dynamic capabilities are the essence of such organization evolution and capability building. This study thus extends and enriches the operations management (OM) literature on resource orchestration theory by providing new empirical insights on the operations strategy of developing capabilities in PBEs. This work highlights how two research areas of OM – resource orchestration and dynamic capabilities – are fruitfully combined to gain new insights into capability building.</p
