Market-Focused and Technology-Focused Strategic Flexibility: Construct, Research Propositions, and Implications

Over the past decade, the importance of strategic flexibility has received a great amount of research attention. However, the current conceptualizations and measurements of strategic flexibility are at odds with different scholarly interest. This study therefore synthesizes extant knowledge on the subject and provides a basis for future research by classifying strategic flexibility into two dimensions, market-focused and technology-focused strategic flexibility, depicting a conceptual framework that contains determinants and consequences of the two types of strategic flexibility and developing research propositions. More specifically, this conceptual framework suggests that organizational culture (i.e., proactive and responsive market orientation), organizational structures (i.e., formalization and centralization), and organizational coordination (interfunctional coordination and alliance coordination) play important roles in cultivating market-focused and technology-focused strategic flexibility of a firm. In addition, the research propositions also demonstrate the respective impacts of market-focused and technology-focused strategic flexibility on product innovation outcomes (i.e., product meaningfulness and product newness) and financial performance. Importantly, this study further proposes that market-focused and technology-focused strategic flexibilities have opposite impacts on product meaningfulness. Implications of this study are discussed.