The systematic development of organizational skills, competencies, and resources needed to achieve strategic objectives. It involves investing in people, processes, technology, and infrastructure to enhance the organization's ability to compete and deliver value.
From 'capability' (Latin 'capabilis' meaning 'able to hold or contain') and 'building' (Old English 'byldan' meaning 'to construct'). The business concept gained prominence in the 1990s as companies realized that sustainable competitive advantage came not from products but from distinctive organizational capabilities.
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