The effects of a firm’s internationalization, age, and environmental turbulence on the capabilities that comprise strategic agility

The effects of a firm’s internationalization, age, and environmental turbulence on the capabilities that comprise strategic agility

This article studies the effects of internationalisation, age, and environmental turbulence on each of the capabilities that comprise strategic agility (strategic sensitivity, leadership unity, resource fluidity). It leverages a study of Spanish companies in the services sectors and uses PLS-SEM to find the key relationships.

  • Publication Date: 26/4/2024
  • Language: English
  • Pages: 27
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Internationalization, firm age, and environmental turbulence had been identified as catalysts for strategic agility, but their impacts on each of the capabilities of strategic agility hadn’t been studied previously. This paper explores the 9 relationships between these factors and capabilities.

The study uses the empirical research of 220 Spanish firms in the service sector and then adopts partial least squares structural equation modeling to analyze the data. Our findings indicate that internationalization has a dual effect on strategic agility: internationalization enhances strategic sensitivity, reflecting improved environmental awareness, but it diminishes leadership unity, illustrating the complexities of global leadership alignment. Additionally, an increase in firm age is associated with a decrease in all the aspects of strategic agility. By contrast, environmental turbulence positively impacts each dimension of strategic agility, suggesting that turbulent conditions can indeed promote the adaptability and responsiveness of a firm.

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