Abstract
Research summary: We address conflicting claims and mixed empirical findings about adaptation as a response to increased environmental dynamism. We disentangle distinct dimensions of environmental dynamism—the direction, magnitude, and frequency of change—and identify how selection shapes adaptive responses to these dimensions. Our results show how frequent directional changes undermine the value of exploration and decisively shift performance advantages to inert organizations that restrict exploration. In contrast, increased environmental variance rewards exploration. Our results also show that, in dynamic environments, the best-performing organizations are generally more inert than less successful organizations. Managerial summary: Our research helps managers to understand under what business conditions investments into exploration and strategic flexibility are more likely to pay off. Dynamic business environments characterized by persistent trends and by large, infrequently occurring structural shocks reward strategic pursuit of temporary advantage. Thus, exploration and strategic flexibility are preferred strategies. In contrast, the challenge in frequently changing environments with fleeting opportunities is to identify and to focus on strategic actions whose payoffs on average are high, independent of environmental volatility. Low levels of exploration and long-term strategic focus are preferred strategies in these circumstances.
| Original language | English |
|---|---|
| Journal | Strategic Management Journal |
| Volume | 37 |
| Issue number | 9 |
| Pages (from-to) | 1854-1864 |
| ISSN | 0143-2095 |
| DOIs | |
| Publication status | Published - 2016 |
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Keywords
- dynamism
- exploration
- inertia
- organizational adaptation
- selection
Cite this
}
Adaptation and inertia in dynamic environments. / Stieglitz, Nils; Knudsen, Thorbjørn; Becker, Markus C.
In: Strategic Management Journal, Vol. 37, No. 9, 2016, p. 1854-1864.Research output: Contribution to journal › Journal article › Research › peer-review
TY - JOUR
T1 - Adaptation and inertia in dynamic environments
AU - Stieglitz, Nils
AU - Knudsen, Thorbjørn
AU - Becker, Markus C.
PY - 2016
Y1 - 2016
N2 - Research summary: We address conflicting claims and mixed empirical findings about adaptation as a response to increased environmental dynamism. We disentangle distinct dimensions of environmental dynamism—the direction, magnitude, and frequency of change—and identify how selection shapes adaptive responses to these dimensions. Our results show how frequent directional changes undermine the value of exploration and decisively shift performance advantages to inert organizations that restrict exploration. In contrast, increased environmental variance rewards exploration. Our results also show that, in dynamic environments, the best-performing organizations are generally more inert than less successful organizations. Managerial summary: Our research helps managers to understand under what business conditions investments into exploration and strategic flexibility are more likely to pay off. Dynamic business environments characterized by persistent trends and by large, infrequently occurring structural shocks reward strategic pursuit of temporary advantage. Thus, exploration and strategic flexibility are preferred strategies. In contrast, the challenge in frequently changing environments with fleeting opportunities is to identify and to focus on strategic actions whose payoffs on average are high, independent of environmental volatility. Low levels of exploration and long-term strategic focus are preferred strategies in these circumstances.
AB - Research summary: We address conflicting claims and mixed empirical findings about adaptation as a response to increased environmental dynamism. We disentangle distinct dimensions of environmental dynamism—the direction, magnitude, and frequency of change—and identify how selection shapes adaptive responses to these dimensions. Our results show how frequent directional changes undermine the value of exploration and decisively shift performance advantages to inert organizations that restrict exploration. In contrast, increased environmental variance rewards exploration. Our results also show that, in dynamic environments, the best-performing organizations are generally more inert than less successful organizations. Managerial summary: Our research helps managers to understand under what business conditions investments into exploration and strategic flexibility are more likely to pay off. Dynamic business environments characterized by persistent trends and by large, infrequently occurring structural shocks reward strategic pursuit of temporary advantage. Thus, exploration and strategic flexibility are preferred strategies. In contrast, the challenge in frequently changing environments with fleeting opportunities is to identify and to focus on strategic actions whose payoffs on average are high, independent of environmental volatility. Low levels of exploration and long-term strategic focus are preferred strategies in these circumstances.
KW - dynamism
KW - exploration
KW - inertia
KW - organizational adaptation
KW - selection
U2 - 10.1002/smj.2433
DO - 10.1002/smj.2433
M3 - Journal article
VL - 37
SP - 1854
EP - 1864
JO - Strategic Management Journal
JF - Strategic Management Journal
SN - 0143-2095
IS - 9
ER -