Strategic Agility in the SME: Use It Before You Lose It

Abstract

This empirical study investigates strategic agility and its relationships with firm age, firm size, and firm performance in SMEs. The Doz and Kosonen three-factor model of strategic agility is operationalized and tested in 30 firms from multiple industries located in the Space Coast region of Florida. It is found that strategic agility decreases as firms grow older but not as firms grow larger. Strategic agility and firm performance are also found to be related as moderated by environmental turbulence. Specifically, performance increases with strategic agility in high turbulence but decreases with strategic agility in low turbulence. This finding is consistent with the view that dynamic capabilities like strategic agility bear a cost which may be unnecessary in stable environments. Overall, the study suggests that SMEs may benefit from strategic agility if it used while they still have it, that is, when they are young.

Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms

“…Small firms are incapable to deal with such type of turbulence efficiently because of a lack of resources. The firm agility increases as the firm grow larger and enable them to reconfigure the available resources and capabilities to address such uncertainties aptly (Reed, 2021). This leads to the construction of our second hypothesis.…”

“…Resilience is defined as the ability of any firm to absorb, respond, and retrieve from situations that could threaten its existence while the sustained growth rate is a rate that can be achieved by the firm on its internal resources without any external support. Most of the available studies examined the issue of resilience and sustaining the growth of small firms from the perspective of entrepreneurial intention (Jena, 2022), strategic agility and its association with firm age, firm size, and firm performance (Reed, 2021), leadership practices and entrepreneurial resiliency (Hutchinson et al, 2021), strategic entrepreneurship for disrupted firms (Thomas & Douglas, 2021), and entrepreneurs' personality traits of resilience and high-power distance impact on consumers' evaluations of sustainability practices (Vizcaíno et al, 2021). These factors are perfectly applicable in normal predictable conditions to analyze the sustainability and resilience of firms.…”

The impact of strategic agility on sustainable competitive advantage: The mediating role of strategic renewal at Jordanian telecommunication companies

“…Third, leadership unity (also called collective commitment) enables the senior management team to rapidly make decisive decisions upon recognizing a new strategic change that entails interdependence, cooperation, and an integrative leadership approach (Reed, 2021) Strategic management literature has seen an increasing debate regarding the relative significance of firm resources and industry structure in achieving a competitive advantage (Galbreath & Galvin, 2008). Many scholars support the concept of industry structure (Porter, 1980) and emphasize the importance of the external environment and the ability of organizations to control the five competitive forces through the utilization of one of the generic strategies: cost leadership strategy, differentiation strategy, and focus strategy as the optimal approach to achieve sustainable competitive advantage (Dulčić et al, 2012).…”

Ta’awun and Marketing Agility of Firm Survivors

“…The COVID-19 pandemic has created market turbulence (MT) where every company needs strong resources and competencies to maintain its business. Market conditions during a pandemic are not ordinary conditions but are rather extraordinary (Reed, 2021). An SME needs to develop its agility since it is this capability that enables companies to survive amidst market turmoil during a pandemic (Al-Omoush et al, 2020).…”