Strategic Agility, Business Model Innovation, and Firm Performance: An Empirical Investigation

Abstract

Despite the robust literature on the nature of business models and their implications for firm performance, research on the organizational antecedents of business model innovations (BMIs) is still evolving. In this study, we empirically examine the extent to which firm-level strategic agility predicts the adoption of three (value creation, value capture and value proposition) types of BMIs. Furthermore, we propose that the relationship between firm-level strategic agility and BMI adoption is contingent on the degree of environmental turbulence. Finally, we explore the mediating role that BMI plays in the relationship between firm-level strategic agility and firm performance. Our analysis of data from 432 German firms in the electronics industry indicates that strategic agility is positively related to BMI and that this relationship is indeed strengthened by the degree of environmental turbulence. Additionally, our findings show that, while value proposition and value creation BMIs have positive relationships with firm performance, value capture innovation was negatively related to firm performance; these findings were 2 contrary to our prediction. Finally, the results of our mediation tests indicate that BMI serves as an important intermediary mechanism through which firms' strategic agility contributes to superior firm performance. Managerial Relevance Our study significantly contributes to managerial knowledge in three interrelated ways: First, we demonstrate that firms should develop their firm's capabilities toward strategic agility (i.e., strategic sensitivity, leadership unity, and resource fluidity) in order to pave important foundations for subsequent business model innovation. Second, we show that the link between strategic agility and firm performance is mediated by business model innovation. Therefore, business model innovation might be a necessary mechanism to utilize firm-level capabilities, Third, we show that business model innovation might also have a dark side, as some business model innovation efforts might even reduce firm performance. Therefore, our study demonstrates that utilizing business model innovation is not universally beneficial and should be handled with care. Based on interviews with managers, we show that changes in the business model and in particular value capture innovation requires systemic adaptations of the organization to prevent issues related to local optimization.

Business model innovation: Identifying foundations and trajectories

“…Value creation as the main cluster is one of the core elements of BMI (Clauss, Abebe, Tangpong, & Hock, 2019). This position is also evident in the citation analysis.…”

The Moderating Effect of Environmental Turbulence on the Strategic Agility-Performance Relationship: Empirical Evidence from Lagos State, Nigeria

“…Muthoni (2015) and Okotoh (2015) found that strategic agility has positive and significant effect on firm competitive capability and operational performance. Claub et al (2019) and Ravichandran (2018) established that strategic agility significantly improved overall firm performance. Furthermore, Khan, and Wisner (2019) established that strategic agility had significant impact on firm performance.…”

“…In literature on strategic agility within and outside Nigeria contexts, scholars in strategic management argued that strategic agility measures enhanced firm performance and mitigated environmental turbulence risks (Abbas & Hassan, 2017;Claub, Abebe, Tangpong, & Hock, 2019;Oyerinde, Olatunji, & Adewale, 2018). However, Arokodare and Asikhia (2020b) pointed out that most of the business firms especially organisations in the oil and gas industry in Nigeria have recorded unstable performance due to inappropriate employment of strategic agility measures as well as slow strategic response to challenges of environmental turbulence such as uncertainty, globalization, innovation, creativity, and changing customers' preferences.…”

Research on Agility Development of Energy Enterprises under the Background of Carbon Emission Trading

“…C2-Q3: The Relationship between humanistic concern and Agility of Cooperative Enterprises (9) We will also send researchers to assist the coal industry in developing clean energy when needed by upstream enterprises, so as to achieve the goals of reducing costs, increasing efficiency and achieving win-win results.…”

“…Conforto [6] proposed a complete definition of agility based on frame semantic analysis. Follow-up research as business leaders and human resources professionals realize the importance of agility, they propose the concept of strategic agility and begin to explore the in-depth relationship between strategic agility and human resources management [7] , entrepreneurial teams [8] and corporate performance [9] . Combined with the research purpose of this study and the previous domestic and foreign literature, this paper defines the agility of energy-based enterprises as the measures taken by enterprises to adapt to their survival and development under the influence of one or more influencing factors.…”