Strategic Flexibility in New High-Technology Ventures

Strategic flexibility is a vital capability for new ventures to update their strategies in a timely manner. However, the role of external knowledge sources in new ventures' endeavours to develop strategic flexibility are unclear. Drawing on the knowledge-based and relational views, we explore the effect of two sources of external knowledge: new product development (NPD) alliances, representing tightly coupled sources, and loosely coupled sources such as industry associations. Our field study of 148 high-tech ventures found that the extent to which firms utilize knowledge from NPD alliances has a curvilinear relationship with strategic flexibility, whereas the extent to which firms utilize loosely coupled sources has a positive linear relationship with strategic flexibility. We also found that in new ventures, decentralization of decision-making and institutional support enhance knowledge integration, positively moderating these relationships.