This paper firstly clarified the two concepts: organizational capability and dynamic capability. The description of the histories of Chinese and western enterprises made the issur clear, that organizational capability was absent in Chinese enterprises, then, it was pointed out that the process of enterprise reformation was the process of the buildup of organizational capability. After that, the paper theoretically represented that organizational capability was the foundation of the sustaining competitive advantage. Furthermore, three issues were proposed to be considered when building organizational capability. |