The Effects of Firm Age and Firm Size on Strategic Agility and Performance
Reed, Jonathan Henry
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Strategic agility is a relatively new construct in the field of strategic management which describes the degree to which a firm is flexible with its business strategy. Strategically agile firms are able to change their market focus, product mix, key resources, or business models quickly in order to exploit opportunities. This study advances our understanding of strategic agility by empirically testing the Doz and Kosonen (2010)model of the construct in a cross-section of firms in multiple industries with several contingency factors including firm age, firm size, and environmental turbulence. Using CEO-level survey data, the model is validated, and nine hypotheses are tested. Significant relationships are found between firm age and strategic agility, and between strategic agility and firm performance. The nature of the relationships is found to depend on the interaction with environmental turbulence. Practical applications of the findings include a strategic agility scale which may be used by firms to measure and develop their strategic agility, and guidance regarding the environmental conditions under which strategic agility may be the most beneficial.