The notion of dynamic capabilities (DC) is suggestive that organisations adapt to changing environmental demands proactively or reactively by exercising capability. Based on the assumptions of incremental change DC is constrained by the imprints of evolutionary economics evident in the writings of the early pioneers. The historical trajectory is central alongside routinized practices setting the scene for predictable learning patterns and behaviour. In as much as capability is understood in terms of an evolutionary learning framework knowledge is always tied to the past, but DC by name should be an outlook to the future. DC still elicit strong sentiments not least associated with what some scholars have described as paradoxical in its conceptualisation steeped in routines and experiential learning. How then can capability be dynamic given that the very essence of capability is based on inertia, embeddeness etc. the very source of its causal ambiguity and competitive usefulness? Indeed the notion of capability is highly suggestive as being particularly constraining on cognitive independence. Managers are the linchpins of DC, it is not surprising therefore that in contemporary writing terms such as managerial dynamic capabilities and managerial cognition are commonplace. Notwithstanding the conceptualisation of DC seems to impose severe limitations on what managers can think, learn and do, in other words a heavily curtailed agency. The reality cannot be any further from the truth, embedded in institutional structures managers actively display agentic behaviours, such as innovativeness and entrepreneurship. Perhaps the evolutionary economics functionalist view of the world left more than just an “incremental change” imprint on the field! Managers are therefore not social dopes in spite of what existing theories that variously restricts learning to socialisation suggest. How then can managerial learning be explained without conflating the powers of the individual with that of structure? A critical realist approach potentially offers a way forward. From a critical realist approach capability can be conceptualised as a social structure. Social structures predate social actors but are only reproduced in action. Social structures are also relational in nature. Managers are viewed as roles played by actors occupying certain organisational positions. It is through the role play that capabilities are reproduced, thus managerial action are central in the exercise of capability. Pre-existing managerial roles are imbued with objective cultural artefacts (rules, norms, etc.) shaping the cognition of potential incumbents. However these are subjectively accessed meaning that action outcomes may not necessarily reflect intention. Viewed this way capabilities are susceptible to reproduction as well as elaboration or change; intentionally or otherwise. Drawing on Archer’s morphogenesis approach we argue that subjectivity functions as dominant reflexive modes. In this paper we employ the concept of internal conversation to distinguish between managers that are predominantly communicative reflexives and autonomous reflexives. ‘Autonomous’ managers are independent learners, future oriented, innovative, entrepreneurial, and act strategically to improve organisational practice. On the other hand ‘communicative’ managers favour the status quo, their learning is constrained by the structure they are embedded in and act to preserve existing practices. As such we seek, through critical realism, to theorise learning in terms of internal conversation emphasising impact of learning outcomes to organisations
