How does strategic flexibility pay off in terms of financial performance? Online publication date: Tue, 06-Oct-2015
by Mohamed Laid Ouakouak; Oussama Ammar
International Journal of Business Performance Management (IJBPM), Vol. 16, No. 4, 2015
Abstract: Strategic flexibility refers to a firm's proactive capability to respond quickly to changing competitive conditions. In strategic management literature, few issues achieve as much apparent consensus as the importance of strategic flexibility for competitive advantages, and substantial research considers how strategic flexibility contributes to firm performance. Yet empirical findings often are incongruent, without coherent explanations that can advance common understanding of the related phenomena, likely due to the vast variety of theoretical approaches adopted and broad array of explanatory variables employed. Although many authors argue that strategic planning processes are excessively rigid, the current study seeks to examine flexibility within this process, to determine its effect on firm performance and the potential moderating role of environment dynamism. The results of a quantitative study reveal that strategic flexibility enhances financial performance, regardless of the degree of environmental dynamism or company size.
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