The effects of a firm’s internationalization, age, and environmental turbulence on the capabilities that comprise strategic agility

de Diego Ruiz, E, Almodóvar, P and Birkinshaw, J (2024) The effects of a firm’s internationalization, age, and environmental turbulence on the capabilities that comprise strategic agility. International Entrepreneurship and Management Journal. ISSN 1554-7191 (In Press)

Abstract

This study investigates a largely unexplored area by examining how internationalization, firm age, and environmental turbulence influence the key components of strategic agility, namely strategic sensitivity, leadership unity, and resource fluidity. Although these factors have been identified as potential catalysts for strategic agility, their specific impacts on strategic agility’s core capabilities have yet to be thoroughly explored. Our research aims to bridge this gap, providing a nuanced understanding of how each of these variables shapes the strategic agility of a firm. The study uses the empirical research of 220 Spanish firms in the service sector and then adopts partial least squares structural equation modeling to analyze the data. Our findings indicate that internationalization has a dual effect on strategic agility: internationalization enhances strategic sensitivity, reflecting improved environmental awareness, but it diminishes leadership unity, illustrating the complexities of global leadership alignment. Additionally, an increase in firm age is associated with a decrease in all the aspects of strategic agility. By contrast, environmental turbulence positively impacts each dimension of strategic agility, suggesting that turbulent conditions can indeed promote the adaptability and responsiveness of a firm.