Proactive and reactive strategic flexibility in coping with environmental change in innovation

This study examines the effects of strategic flexibility on innovation performance by incorporating proactive and reactive strategic flexibility into the framework of strategic flexibility and the moderating effects of environmental change by subdividing this construct into rate and turbulence. An empirical study of 180 sample Chinese manufacturing firms shows that: (1) both proactive and reactive strategic flexibility have positive effects on innovation performance, (2) rate of environmental change significantly positively moderates the relationship between proactive strategic flexibility and innovation performance as well as significantly negatively moderates the relationship between reactive strategic flexibility and innovation performance and (3) turbulence of environmental change significantly positively moderates the relationship between reactive strategic flexibility and innovation performance. The results indicate that firms that face a fast rate of environmental change should direct more attention to proactive strategic flexibility; however, firms that face a high turbulence of environmental change should pay more attention to reactive strategic flexibility.