DESIGN AND IMPLEMENTATION OF STRATEGIC AGILITY EVALUATION MODEL WITH STRUCTURAL EQUATION MODELLING APPROACH.

Author:Asil, Atefeh
Position:Abstract
 
FREE EXCERPT

INTRODUCTION

Newly established technology-based companies are a classic form of innovative organizations that can act as ideal structures and can respond to environmental changes quickly. Innovative companies are the main source of advancement in the arena of product technology and innovation. Rapid growth, operating in global markets, high added value, creating quality jobs, innovation, rapid adaptability, technology diffusion, establishment of large future corporations and high internal rate of return are some of the advantages of these companies (Eurpean Communities, 2002).

Behaviors of small and newly-founded companies are different from the behavior of large companies. Entrepreneurship activities in these firms depend on the imagination, creativity and using the opportunities of these organizations' founders and their attitude, not by planned procedures or support of organizational systems. Even managers in some of these firms imagine that there is no need to regulate the ideas, planning, organizing and controlling the processes, and therefore, flexibility depends upon the cognitive and mental models of people without using foreign consulters. Implementing entrepreneurship behaviors and using opportunities are not yet embedded in the instructions and procedures of the company (Zhang, 2011). Attitudes, mental norms, beliefs of people about risk-taking, conducting preventive measures and participation in initiatives of the founder play an essential role in determining the strategy of the company (Lubatkin et al., 2006; Kraus & Kauranen, 2009). However, these types of companies enjoy the rapid growth, high added-value, creating high quality jobs, creating large companies in the future, helping the expansion of technologies, and rapid adaptability.

Because one reason for establishing small and medium enterprises is the ease of establishment without need to certain management information, lack of suitable strategic planning based on the weaknesses, strengths, opportunities and threats is one of the major caused of failure for newly-established companies (Lambropoulos, 2005). In most of these companies, people do their routine daily work and they do not believe that they are applying strategic management.

The common mistake is that market is ignored in creating new ideas and there is no correct evaluation of the target market for the new products or services (Kraus & Kauranen, 2009). Deployment of the newly-established and small companies in the center of growth is one of the government supportive measures for these companies. But these companies have some problems in identifying and determining the required assistance and it seems that in addition to lack of the strategic thinking, this is caused by the complexity of organization challenges encountered by them (Beidokhti & Zargar, 2012). The expansion and complexity of the competition, caused by governing phenomena like shorter life-cycle of products, increase in the diversity of customers' needs, and rapid growth of technology, have interested many researchers to the necessity of being aligned with the environment. Various studies show that the failure reason of some companies is inattention to the changes in the dynamic environment and lack of suitable strategic plans for conditions which leads to not providing the right product in the right time for the right customer, and it creates another problem for an organization (Zaridis & Mousiolis, 2014). This category relates to the strategic agility according to the definition of Roth (1996) and Long (2000). In such conditions, empowerment of newly-founded organizations for rapid and accurate adaptability with the changing conditions is a key factor for effective survival and success in the future. This capacity depends on the strategic agility (Horney et al., 2010, Adeleye & Yusuf, 2006). In other words, the company shall have the ability to provide right products and services in a right place, right time, right cost, for right customers (Long, 2000).

In short, we can say that the newly established small firms are different from large companies. In the newly established small companies, most of the activities of the organization are based on the basic patterns of the owners of these companies. The business plan presented to the growth centers is not constantly monitored and market changes are not constantly monitored. There is no flow of fluid. Due to the increase of environmental changes and field studies, organizational agility in these organizations is unknown. So far, no research has been conducted on the strategic agility of newly established companies. The study seeks to identify effective indicators of the strategic agility of newly established companies and assess the status of these companies based on these factors and suggests that there are solutions to resolve the existing gap. Now the main question is that what are the dimensions and indicators of strategic agility in the newly-established organizations in the growth centers?

Previous research have shown that the agility leads to obtaining and maintaining the competitive advantage, a capacity which is a key competence in the rapidly changing environment. In a complex and rapidly changing environment, organizations need to move proportionally with the environmental changes, and produce their products based on the demands of the customers or create a new demand in the customers. This capacity depends on the strategic agility (Horney, 2012). Most research about the strategic agility were focused on the small, medium, and large enterprises which have sold their products. There is no specific research about the strategic agility. The main purpose of this research is determining effective factors on the strategic agility in the newly-established companies in the growth center. Regarding the research, three approaches have been presented for the strategic agility including strategy as a structured chaos (Brown & Eisenhardt, 1998), renewal and strategic improvement (Hamel & Valikangas, 2003; Hamel, 2012), strategic sensitivity, collective commitment, fluidity of the resources (Doz & Kosonen, 2010; Hamel, 2012). In this research, in addition to combining three approaches, identified factors in the literature in different fields were combined and suitable factors for newly-established companies. Then, the status of these companies is based on the identified factors in the model and the existing gap is known.

METHODOLOGY

This research is as follows in terms of application, methodology and purpose.

Application

This is an applied research because its results have special application and used in solving some projects' problems.

Research Methodology

It is a quantitative research.

Purpose

It is exploratory research because it seeks to identify the strategic agility factors in companies established in growth centers. Regarding that the information of the society has been collected using a questionnaire, this is a survey and case-study.

This research has used library method (papers, journals and books) and field studies (researcher-constructed questionnaire based on the identified factors) for gathering information related to the literature, background and strategic agility indicators. The type of questionnaire is closed form, the questions of questionnaire are spectral and it is electronic and face-to-face in terms of distribution.

10 growth centers were identified and it was estimated that around 700 companies are based in these centers or are utilizing their services. Simple random sampling method was used to select the research sample. The Krejcie-Morgan table was used to determine the sample size (we use Krejcie-Morgan table), when neither the population variance nor the probability of success or failure of the variable is known and thus, statistical formulas cannot be used to estimate the sample size. This table has been presented by Krejcie and Morgan. Using this table and the simple random sampling method,155 companies were selected as sample.

Using the desk study method and reviewing the research literature on strategic agility, a list of effective indicators was identified, which is summarized in the following Table 1.

After interviewing the experts and managers of the growth centers and analyzing collected indicators, factors including: strategic sensitivities, collective commitment, resource fluidity, unity in leadership, change management, using information technology, developing a strategic prospect, understanding the key capabilities, selecting strategic goals, strategic planning, customer knowledge and joint responsibility and action were selected to present the research model and to assess the companies based in the growth centers.

The conceptual model of the research is as follows (Figure 1).

A researcher-made questionnaire was used to measure the research variables. The questionnaire was developed based on the Likert scale to measure the above factors. The questions were designed through the analysis of the research literature. Equal values were considered for all the items.

Consultation was made with the counselors of growth centers (10 growth centers), some companies based in growth centers and management professors in the preparation of the questionnaire. To evaluate the content validity of the questionnaire, expert opinions...

To continue reading

FREE SIGN UP