Strategy adaptation under external uncertainty: examining speed-based competitions

Abstract

Purpose

Despite the growing attention being paid to the role of uncertainty in the competitive business environment, few studies have considered uncertainty as an antecedent factor and explored its direct impact on accelerating a firm’s innovation speed. This study develops a conceptual framework that examines the impacts of technological uncertainty and market uncertainty on innovation speed, building on complex adaptive theory. Furthermore, it is important to note that the internal resources of a firm and its external environment are not separate entities. In this study, we investigate the moderating role of a firm's internal and external resource ability (financial constraints level and organizational slack level) in the relationship between environmental uncertainty and innovation speed.

Design/methodology/approach

Our data sample is the panel data of China's A-share listed companies. The data year span is from 2000 to 2018. We use a hierarchical regression analysis model.

Findings

Our results reveal that both technology uncertainty and market uncertainty can promote innovation speed. Still, a firm’s organizational slack positively moderates the relationship between technology uncertainty and innovation speed, and financial constraints negatively moderate the relationship between demand uncertainty and innovation speed.

Originality/value

Our research contributes to the existing literature on uncertainty and extends its research perspective by no longer taking uncertainty as an environmental factor but exploring its direct impact. Still, our research focuses on innovation speed and discusses the impact of environmental uncertainty (including technology uncertainty and demand uncertainty) on firms’ innovation speed, expanding the limitations of previous research, which usually holds a relatively general perspective on innovation problems.

Citation

Huang, Y. and Mu, W. (2024), "Strategy adaptation under external uncertainty: examining speed-based competitions", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-04-2023-0508