Strategy, flexibility and performance: how cost leaders’ lack of structural flexibility negatively impacts nonfinancial performance
Journal of Strategy and Management
ISSN: 1755-425X
Article publication date: 26 May 2023
Issue publication date: 7 November 2023
Abstract
Purpose
This study analyzes strategic flexibility with a two-dimensional approach (structural and decisional flexibility). It also investigates the relationships among competitive strategy, structural flexibility, decisional flexibility, and financial and nonfinancial performance.
Design/methodology/approach
The authors collected data from members of 16 chambers of commerce in the United States and used PLS-SEM (partial least squares structural equation modeling) to test the hypotheses.
Findings
The findings suggest that strategic flexibility impacts financial and nonfinancial performance in different ways. While financial performance is influenced by both the structural and decisional dimensions of strategic flexibility, nonfinancial performance is impacted only by structural flexibility. In addition, the research indicates a negative relationship between cost leadership and structural flexibility and positions structural flexibility as a mediator between cost-leadership and nonfinancial performance.
Originality/value
The authors contribute to strategic flexibility research in the following ways: (1) analyzed the impact on nonfinancial performance; (2) examined structural and decisional elements and (3) identified cost leadership as a potential barrier.
Keywords
Citation
Oglesby, M.T., Parnell, J.A. and Kutz, D.C. (2023), "Strategy, flexibility and performance: how cost leaders’ lack of structural flexibility negatively impacts nonfinancial performance", Journal of Strategy and Management, Vol. 16 No. 4, pp. 689-707. https://doi.org/10.1108/JSMA-07-2022-0120
Publisher
:Emerald Publishing Limited
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