Strategic schemas, strategic flexibility, and firm performance: the moderating role of industry clockspeed

Abstract

We examine the moderating effect of industry clockspeed on the relationship between strategic schemas, strategic flexibility and firm performance. We employ two key properties of strategic schemas: complexity and focus. Using a sample of 225 firms from 14 industries, we show that the pattern of relationships among the theoretical constructs is different in fast-and slow-clockspeed industries. The results suggest that complexity of strategic schemas promotes strategic flexibility and success in fast clockspeed industries, whereas focus of strategic schemas fosters strategic persistence, which is effective in slow-clockspeed industries.

Customer integration and operational performance: The mediating role of information quality

“…There have been studies investigating the manufacturing capability-performance link and the role of external characteristics of the environment such as the rate of innovation in industries (e.g., Nadkarni and Narayanan, 2007), environmental dynamism (e.g., Terjesen et al, 2011) and technological turbulence (e.g., Chavez et al, 2015a). It has been argued that organizations respond directly to external environments, e.g.…”

Attention and Entrepreneurial Cognition

“…Researchers have shown that such focused attention can trigger strategic persistence and improved performance when industries are changing at a slow pace (Nadkarni and Narayanan 2007). For example, consistent with these top-down explanations, Polaroid's failure to profit from the commitment it made early to digital imaging technology stems from its top managers' inability to utilize the most appropriate structure of knowledge for changes that had occurred in the organizational environment.…”

“…Individuals learn core concepts from their prior experiences, which then become part of their knowledge structures (Nadkarni and Narayanan 2007;Walsh 1995). Core concepts generate particular environmental expectations that then guide how managers allocate attention in a topdown manner.…”

“…Thus, managers need rich and deep knowledge structures. Nadkarni and Narayanan (2007) stressed that knowledge structures differ in c omplexity-namely, the scope and diversity of the concepts embedded in individuals' cognitive structures-and in the number, richness, and depth of these concepts' interconnections (Kiss and Barr 2015;Nadkarni and Narayanan 2007). 1 The complexity of knowledge structures may increase flexibility in strategic decision making (Nadkarni and Narayanan 2007) because it enhances managers' ability to detect more signals in their environment (Sutcliffe 1994;Walsh 1995).…”

Middle managers' knowledge of strategy: antecedents, cognitive accuracy and self-awareness

“…Other studies flip the causal arrows examining how the external environment moulds strategic schema and behaviour. For example, Nadkarni and Narayanan (2007) highlight how the clock-speed of different industries shapes the complexity and focus of strategic schemas. Nadkarni and Barr (2008) examine how industry velocity shapes the structure of cognitive representations and the speed of strategic action.…”