Empirical Research On Strategic Flexibility And The Mechanism To Enhance Innovation Performance: A View Of Inter-firm Networks

With the continuous advance of globalization and the rapid development of S&T, environment faced by firms is increasingly complex and dynamic, which has a deeper and deeper effect on firms'development. For our local firms which are gradually integrated into the global manufacturing system, it is especially significant that aggravation of competitive environmental dynamism and complexity intensify day by day. How to deal with challenges in a dynamic environment or exploit opportunities arising from this dynamic environment has become a key issue of decision-making practice in firms'strategic management, as well as hot topic studied and discussed by academia.Dynamic environment means that competition among firms not only centers on factors such as product quality and cost, but also compels firms to pay more attention to technological innovation, strategic flexibility and other factors than ever before. Favorable technological learning and successful innovation strategy can cultivate and improve firms' core capabilities, while strategic flexibility enables firms to quickly adapt to changes in external environment and initiate changes and innovation as well as flexible and efficient management, so as to build sustaining performance advantages. Related researches on strategic flexibility have aroused broad attention of scholars, however, the existing researches for strategic flexibility have not formed a complete construct system, questions such as what antecedents strategic flexibility is subject to, and how strategic flexibility affects innovation performance in a dynamic environment have not been studied deep enough, what more, relevant empirical researches are even more rare.In this context, this dissertation took China's local firms which are embedded in the global manufacturing network as study object, and focused on "How firms make use of strategic flexibility to enhance innovation performance" as the fundamental question. On the basis of logically rigorous theoretical deduction, analysis and definition, and by referring to and integrating inter-firm network theory, organizational learning theory and contingency theory etc., this thesis proposed and was going to answer the following three research questions:(Ⅰ) Will strategic flexibility positively affect innovation performance? (Ⅱ) How can firms take advantages of external network and internal organizational capacity to cultivate strategic flexibility? (Ⅲ) How do firms select certain type of strategic flexibility to match with the external dynamic environment in order to achieve high innovation performance? This study will be conducted mainly through the following sections:(1) Literature review and theoretical development. By reviewing relevant literature of certain research fields such as strategic flexibility, inter-firm network, technological innovation, this dissertation systemized theoretical clues related to the research framework, including analyzing and summarizing connotation, characteristics and constituent elements of strategic flexibility, and holding that strategic flexibility comprises resource flexibility and coordination flexibility from the perspective of connotation, while can be divided into proactive strategic flexibility and reactive strategic flexibility in terms of overall extension. From the perspective of strategic flexibility, we pointed out and emphasized that, firms should persistently acquire, develop and sustain integration of resources and capabilities, and must remain open and responsive enough.(2) Exploratory case studies and the proposing of theoretical framework. After conducting several in-depth interviews with 12 firms, we selected 5 of them to do exploratory case study. Through discussions within and between cases, we described characteristics of inter-firm network, effects of organizational absorptive capacity on two elements——resource flexibility and coordination flexibility of strategic flexibility, as well as ordinary relationship between resource flexibility, coordination flexibility and innovation performance. Thus, the research framework of relationship between strategic flexibility and performance based on inter-firm network has been initially formed, providing a conception which originates from practice to the following theoretical researches.(3) Model construction and empirical test of network-based relationship between strategic flexibility and firms'innovation performance. Based on exploratory case studied, we further neatened theoretical literature related to the research framework, and established the concept model of network-based relationship between strategic flexibility and innovation performance. In the following part, utilizing questionnaires selected from 272 firms, and testing the model and hypothesis by quantitative empirical methods such as exploratory factor analysis, confirmatory factor analysis and structural equation modeling, eventually reached conclusions of network-based relationship between strategic flexibility and firms'innovation performance.(4) Research on firms'selection strategies of strategic flexibility under the context of dynamic environment. In view of that strategic flexibility is not only reactive strategic flexibility, which means "firms passively adapt to changes in order to obtain competitive advantages", this dissertation will discuss proactive strategic flexibility which embodies "promptly adjust innovation resources, capabilities and structure in and out of the organization to create environmental changes therefore win competitions". Taking environmental dynamism as a moderate variable, and deeply probing into mechanism by which proactive strategic flexibility and reactive strategic flexibility impacting innovation performance from an overall perspective deepen the explanatory power of the positive role strategic flexibility plays on firms'innovation performance.After the above research and demonstration, following conclusions can be reached:(1) as the two major elements of strategic flexibility, resource flexibility and coordination flexibility have positive impacts on innovation performance. Positive effect of resource flexibility means that if a firm owns innovation resources that have broad usage, small conversion difficulty, and conversion time and low time cost of conversion, then, on the one hand, costs of the firm to adapt to environmental changes can be reduced, on the other hand, costs needed to respond to environmental changes will be reduced too. Both are beneficial to firms to quickly respond to environmental changes, successfully conduct innovative activities, and access to higher innovation performance. Positive effect of coordination flexibility shows that when environment changes, for one thing, firms can use their strong capacity to make effective use of resources to adjust the mix of resources to respond to environmental changes, for another, strong capacity to make effective use of resources can help firms to find new opportunities arising from environmental changes, as well as discovery new undervalued resources, thus help firms to achieve competitive advantage. The conclusions can clear up the connotation dimensions of strategic flexibility and offset insufficient empirical researches on effects of strategic flexibility on innovation performance.(2) The characteristics of inter-firm network and organizational absorptive capacity have important impacts on the two major elements of strategic flexibility. Specifically, the four dimensions:position centrality, tie strength, network size and network scope of inter-firm network of resources have significant positive effects on resource flexibility; The four hypotheses that the characteristics of inter-firm network have positive effects on coordination flexibility were not verified, and this dissertation gave explanations from perspectives of mediate effect of resource flexibility, internal organizational capacity as major source of coordination flexibility, and the complexity of the effect mechanism of interfirm network; the two dimensions of absorptive capacity——knowledge acquisition capacity and knowledge application capacity have significant positive impacts on coordination flexibility; knowledge acquisition capacity has a significant positive impact on resource flexibility; the hypothesis that knowledge application capacity has a significant positive impact on resource flexibility was not confirmed. The conclusions supply theoretical basis to how firms utilize external resources and internal organizational capacity to enhance strategic flexibility.(3) Different types of strategic flexibility in a dynamic environment impact firms'innovation performance differently. Specifically, both proactive strategic flexibility and reactive strategic flexibility have positive effects on innovation performance, which implies that whether dealing with and adapting to environmental changes or actively creating changes to foster favorable environment to own development of firms themselves are beneficial to innovation performance; the more rapidly environment changes, the more obvious positive effects of proactive strategic flexibility on innovation performance, while the more obvious negative effects of reactive strategic flexibility on innovation performance; the higher unpredictability of environment changes, the more obvious positive effects of reactive strategic flexibility on innovation performance, while the moderate effect of unpredictability of environment changes on relationship of proactive strategic flexibility and innovation performance was not verified, that is, there is no moderate effect on the positive relationship between proactive strategic flexibility and innovation performance. The conclusions provide management advice and decision support to firms to adopt suitable type of strategic flexibility which matches the dynamic environment in order to promote innovation performance.The above conclusions deepen understanding of the relationship between strategic flexibility and firms'innovation performance under the context of network, making this dissertation possess strong theoretical and practical significance. Throughout the whole, this dissertation makes deepening and expansion in the following three aspects:(1) elaborated on the concept of strategic flexibility and its constituent elements, providing a new perspective to how firms achieve sustaining advantages; (2) deeply analyzed of the external network characteristics of strategic flexibility and antecedents of internal organizational capacity, supplying train of thought to conduct theoretical researches on strategic flexibility; (3) thoroughly revealed the differences of mechanisms by which different types of strategic flexibility impacts firms'innovation performance under the condition of dynamic environment, offering theoretical reference to make strategic flexibility play a better role in a dynamic environment.