The Influence of Strategic Agility on Firm Innovation Behavior: A Quantitative-empirical Analysis

The 21st century economic world is a volatile and complex one; new markets emerge, collide, split, evolve, and die within very short periods of time (Weber & Tarba, 2014). Rapid technological advancement, employee mobility, or new forms of customer behavior are main triggers of change (Lewis, Andriopoulos, & Smith, 2014). As a result, extant concepts such as the resource-based view (e.g. Barney, 1991; Wernerfelt, 1984) or the market-based view (e.g. Porter, 1985) fail to give firms a guideline how to handle such rapid changes in a proper way. Firms are basically aware of the importance of innovating products, processes, and business models in this realm. Nevertheless, knowing what to do and knowing how to do it is different, especially as direction and effect of ecosystem changes are normally not predictable (Weber & Tarba, 2014). Recent literature (e.g. Doz & Kosonen, 2008, 2010) points to the importance of strategic agility in this context of regaining or securing a competitive advantage in turbulent times. Strategic agility can be understood as the ability to remain flexible in facing new developments, to continuously adjust the firm`s strategic direction, and to develop innovative ways to create value (Smith, Binns, & Tushman, 2010; Weber & Tarba, 2014). Nevertheless, the concept of strategic agility is not free from contradictions as strategic agility requires on the one hand formal strategic planning as groundwork for improving or newly developing ways of value creation. On the other hand, the role of strategic commitment has to be highlighted as the allocation of resources builds the groundwork for learning and adaption. Furthermore, strategic flexibility is needed to ensure a timely response to ecosystem changes (Lewis, Andriopoulos, & Smith, 2014). But even if firms are equipped with these capabilities, they face the challenge to decide whether they should explore new business opportunities and develop completely new products, processes, or business models, strive for exploiting extant firm capabilities (Levinthal & March 1993, March 1991) or go for an approach combining both basically different strategies. Literature does by now not provide an answer to the question how firms should design their innovation behavior dependent on their strategic agility? Therefore, we ask: (1) How do exploration, exploitation, and ambidexterity influence the firm competitive advantage? (2) How does strategic agility influence the firm competitive advantage dependent from the firm`s basic innovation strategy? We approach these questions against the background of handpicked sample of 99 German firms being part of the electronic industry. Data was collected based on a questionnaire developed out of literature we recently sent out via email. In case of missing or inconsistent data follow-up phone calls helped us to fill the gaps and to enhance data quality. We analyzed the data by making use of a PLS SEM approach (Hair, Ringle, & Sarstedt, 2011; Hair, Sarstedt, Hopkins, & Kuppelwieser, 2014). Our findings show that exploration activities increase the competitive advantage of the firm while exploration activities have no positive effect on the competitiveness. Ambidexterity causes a negative effect on the firm competitive advantage. Interestingly, strategic agility improves the positive effect of exploration on the firm competitive advantage which points to the importance of strategic agility for firms that face need to deal with ecosystem complexity and change. 3 We contribute to a better understanding of the linkage between firm innovation approaches, strategic agility, and firm competitive advantage. By providing empirical evidence for the effects different forms of innovation have on firm competitiveness and how strategic agility influences these effects we provide interesting insights into the success component of firm innovation behavior in turbulent times and bring forward strategy literature as well as innovation literature.

Autor:

Clauß, Thomas & Laudien, Sven